This Is the Most Important Financial Advice You Need to Hear Right Now | Ramit Sethi

One common mistake that people make is they just try to cut a little bit of everything. 5% here, 5% there. Life sucks when you do that. [music] And the classic thing we've all heard is $3 lattes, blah, blah, blah. Saving $3 lattes is not going to change your life at all, okay? I've run the math. You save it for 60,000 years, maybe you end up with some real material savings. None of us are doing it. You would be better off picking your [music] two to three biggest expenses and going after it. Everybody, welcome to Impact Theory. Today's guest is Ramit Sethi. He's a New York Times best-selling author who Fortune magazine called the new finance guru. He's a leading voice in the world of personal finance and has been featured by a gaggle of the world's most prestigious media outlets, including Forbes magazine, alongside Warren Buffett, I might add, CNBC, The Wall Street Journal, CNN, The New York Times, and a bunch of others. He's been going absolutely ham recently with nearly daily updates during this crisis and over 1 million people read his posts and watch his content every single month to help them navigate this unprecedented time. Ramit, thank you for joining us, man. Thanks for having me back. Dude, I'm excited. Um as soon as this hit and it became super apparent what was going to be happening in terms of the economic shakedown, I was like, we got to get Ramit back on the show. You have such an individualized take. Like so many people are are talking at a very high level about the economy and all that, but I think it's the leaves a lot of people paralyzed in terms of what should I be doing right now today. Um so, how do you think about this? How does your normal advice compared to what you're advising people to do now in the midst of what's going on? I have definitely made some changes in my financial advice. One [clears throat] of the first things is that I am now advising people to target a one-year emergency fund, which sounds like a lot. We can talk about how do you calculate that and how do you actually do that if you lost your job, for example? But that's one change. Um you know, another thing that I've really been talking to people about is the psychological mindset of how to take action right now. And you know, there's a little framework that I've been sharing with people, which is step one is you have to accept reality. And that means that, for example, if you're a waiter, your job's not coming back for a long time. And we have to just accept that that is the case. That's really painful because culturally most of us are optimistic. We want to go west. We we think that everything's going to work out. All of our movies end with two people walking off in the sunset. But sometimes reality is a little tougher than that. Uh the second thing that we have to do is make a plan. It's one thing to be worried and anxious about money. Fine, all of us are feeling that way. But after we accept reality, uh we have to decide, "Hey, what if things go great? How am I going to come out of this?" But also, "What if things go poorly?" And then finally, we have to move. Uh in normal times, we are so uh we get paralyzed. And if you think about if you're driving down the freeway and you see something in the middle of the road, what's the first thing you do? You slam on the brakes. It makes sense. But in a time like this, in a crisis, that's actually the last thing that you want to do. You don't want to freeze. What do you mean when you when you say slam on the brakes in this? You're saying just don't um stop thinking, don't stop processing, opening bills, moving forward, making a plan. Correct. Because you see what happens is most of us freeze. We don't know what's going to happen. We wait for the government to tell us. We wait for our boss to tell us. We wait for everyone around us to tell us what's going to happen, and we delegate our own authority. Now, hopefully they know, but I think reality has shown that they don't. And so, better that we move instead of staying stagnant and paralyzed and waiting. And listen to this, it's even better if you move and you make a couple of mistakes as long as you are moving. But so many of us are paralyzed to do anything and that is the last thing you want to do right now. Yeah, I agree with that violently. One thing that I'm always telling people and it's counterintuitive and I have to I often get a lot of pushback on this which is absurd to me, but it's better to move a thousand miles an hour in the wrong direction than to stand still because standing still you're not learning anything. You're not running any tests. Obviously, I'm not saying knowingly run a thousand miles an hour in the wrong direction. I'm saying you pick the direction, it was your best bet in terms of what was going to work, but no matter what happens down that path, you're going to learn something if you're paying attention. And so, yeah, I think that's super powerful. I want to go back to what you're talking about with the emergency fund. How the hell do people who are they're living a life where they're just sort of making ends meet, they're living paycheck to paycheck. I think the stat is most people have if they're hit with a surprise $500 bill, they can't pay it. So, if they're in that zone now, especially, um, and I'd love you to answer So, there's two ways. How do they do it if they have their job? And then how do they do it if they just lost their job? Okay, great. Let's start with people who lost their job. I want to talk to them first because it is urgent for them. And other people who still have their job or have savings, you have a little bit more leeway. So, for both groups, the typical advice that you hear is to shrink and cut back on everything. But as I've always said, there's a limit to how much you can cut. There's no limit to how much you can earn. So, there are really three ways that I talk about in terms of getting stable. The And it's the CEO strategy. Cut costs. We all know the the flavor, but I'll give you a specific example. I had somebody uh, reach out to me and say, "Ramit, my wedding isn't for like seven or eight months. What do you think I should do?" And I said, without missing a beat, I said, "You got to cancel it." And as someone who has planned a large wedding, I know how painful that is to just think of all the money lost, all the planning, all the time. But at a time like this, money in your pocket is worth more than money in your pocket later. So, money in your pocket now is worth more than money in your pocket later. That means if you have to cancel certain things that are going to incur fees later, fine. Deal with the fees later, but get the money in your pocket. That's C. E, earn more. We can talk about earning more in a second, but there's a whole opportunity there to start businesses and start earning more. O is really something that a lot of people haven't thought about right now. So, whether you have a job or not, you can call up the companies that you owe money to or you transact with and you can get some surprisingly great results. For example, your student loan company. If you guys owe owe student debt, uh if you owe credit card debt, uh if you have a cable bill, a cell phone bill, or even a landlord, you pick up the phone and this is what you say. You say, "I've been a good customer for 3 years. COVID-19's making it difficult for me to be able to pay my bills like I usually do. I'd like to know what options you have available for me." And my readers have used this script. A lot of them have gotten their payments paused with no finance or interest charges, and some of them have even gotten rent waived. So, there's a lot of opportunity. You're talking about possible hundreds or even a thousand plus dollars with one phone call. That is how you start. Yeah, I think that's really smart. I remember when I was doing, believe it or not, I used to be a telemarketer, and they would talk a lot about what are the magic words? Here Here they said, "Everybody wants the magic words that you say." And at one point I was also selling door-to-door. And so, like, you know, knock knock, buy this. Like, what are the magic words to get people to do it? Um I want people to understand what you just said is this is a script, right? Those are the magic words. So, don't say words like that. Say those exact words. I know that you also did a video on this. I'm sure you've written this down as well. Um people people need to understand that you're giving them the keys of the kingdom, but the one thing that you can't do is pick up the phone for them. Uh and in sales again, we used to joke, for some people that phone is really heavy. And it's like just, you know, picking it up and making the calls is where people are really going to struggle. But man, like here here's what's interesting about do or die times. I don't wish them on anybody. But it is really fascinating when you're backed into a corner the reserves emotionally that you find. This is one of the things I find so interesting about your background that you studied psychology. So, what is it that makes people so reticent to pick up that phone and how do you help them over that hurdle? Because some people will hear the logic of, "Hey, a thousand dollars with a single phone call, they're going to do it." Other people still won't. That phone's still heavy. Um do you how do you approach people that are hesitant? I remember hearing a podcast interview with a former Navy SEAL. And he said, "When other people do push-ups, they get tired. The more push-ups I do, the stronger I get." And I just thought it was such a beautiful reframe. That when things get hard, we can actually get stronger. So, you know, so many of us wish for things to be easier. And the first question they ask when they hear that script is, "Can I text them or email them?" And that's the wrong question to be asking. Because what you're really saying is that phone scares me. Or calling up somebody and asking for what I want scares me. So, is there some shortcut I can take? And I would challenge everyone here, just like you said, I wouldn't wish these times on anybody. But in these times, they give us the opportunity to really rise up and become bigger than who we previously were. And so, if the phone scares your past self, maybe your current self looks around and says, "You know what? It's time for me to find a way to overcome that fear." So, that is my hope for everyone here. The phone call is actually the smallest part of how you can transform yourself right now. In retrospect, when you look back on this 5 years from now, you're going to look back and say, "I can't believe that phone call or I can't believe starting a business and and posting something on Instagram selling something for 50 bucks scared me because look how far I've come." But, you have to pick up the phone or you have to post that first sale right now to know that you can actually be bigger than you thought you could. Yeah, for sure. So, when I think about cost cutting, uh the C in the CEO formula, which I love by the way, um that one to me is there's a real opportunity for gamification. If people are anything like me, like I dude, always as a kid, I was like, "Well, I'm just going to get rich." Like, that was always my solution. Why would I save for retirement? I'm going to get rich. Like, it was so self-evident to me that that was the goal and that I should spend my time focused there. For anybody that knows my story, long convoluted story, I didn't end up making money until I stopped chasing it, but like it that was just sort of the the self-evident thing. When we started Quest though, I I had to cut everything, man. It was such a huge gamble. My house was on the line. We were personally guaranteeing all of our loans. I had to cut my salary back to a third of what it was at the previous company and it was like, "Okay, fuck." And what I had to do to make that was to to get ultra-competitive. One, I'm going to cut my expenses down to nothing. Nobody's lived sort of as lean and mean as I'm prepared to live. We got rid of a car. I was having to bum rides off my employees. I had between my wife and I, we had one car with a leaky exhaust that would start shaking at about 55 miles an hour. It was absolutely hilarious. And so, I'm building this like what ends up being a billion-dollar company, but I'm dude, I'm doing it from like we don't go out. We like if we rent a movie, like we're tracking the $2.99. Like, everything was so to the bone in terms of, you know, making sure that we only had one car, so we only had insurance on one car. But, I saw other people at the same time that they couldn't do it. They couldn't make the same And I remember this one story, dude. was buying truffle mushrooms. He was in the same boat as me, driving a Mercedes, eating truffle mushrooms. I was like, "What the is happening? What what What are you thinking?" And when I would like get this competitive spirit, this aggression towards the savings. So, to put it in COVID terms, to like, "Dude, if I were in a position where I had to save and I had lost my job, it would be me versus COVID-19." Yeah, I love that. You know, it's so rare to hear someone going on offense with their money. Most often, like 99% of the time, people are playing life on defense, especially with their money. I guess I spent that much. I don't Nobody taught me about money. Oh, there's no way to make money. On and on and on. And even in the relatively simple area of cost-cutting, you were like, "No, that. I'm going after it. I'm going to become an animal, as you put it." And so, you don't have to have that aggression in every part of your life. I think at a certain point it would become counterproductive, maybe. But, just to pick that one zone and say, "I'm going to dominate this." And whatever winning means to you. So, let me give a couple of suggestions for people for how you can start and then how you can take it to the to the next level if you want to. First off, with cutting. One common mistake that people make is they just try to cut a little bit of everything. 5% here, 5% there. Life sucks when you do that. And the classic thing we've all heard is $3 lattes, blah blah blah. Saving $3 lattes is not going to change your life at all, okay? I've run the math. You save it for 60,000 years, maybe you end up with some real material savings. None of us are doing it. You would be better off picking your two to three biggest expenses and going after them. Going really hard. Okay, you got a car payment? Let's look at that. Uh you know, student loans. Have I called up my student loan company? Have I gone and typed in student loan debt payoff and calculated how I could shave 4 years off the payment? No, nobody has. They spend their life complaining that they never read a single good book about personal finance for their entire life. So, pick two areas, two to three, target 10 15% savings. If you can achieve those, you don't have to worry about cutting back on $3 lattes. Those two to three big expenses can be amazing. Now, if you want to go all the way, like to what you did, you can get aggressive and you can start cutting everything. But, I would recommend because money is also a psychology game, is you want to get a couple of wins under your belt first. So, even something as simple as getting your credit card uh fee waived, that's 35 bucks. It's not that much in the grand scheme, but you're going to be like, "Wait a second. Pat myself on the back. I actually did it." And now you can start to get more aggressive. Yeah, that getting wins um I don't know if you've heard about those rat studies, but if you put two rats in a tube, by nature, they will try to push each other out. And what they found is whatever rat ended up pushing the other rat out, in the next fight, they were more likely to win. If they won that one, they were more likely to win the next one. But, they found the same was true even if they pushed the rat from behind and forced it to win. That it would still be more likely to win the next time even if you didn't push it. So, there is something baked into our psychology where, man, if you can get those early wins and you can, like you said, pat yourself on the back and really feel like, "Okay, I've got some momentum." You get that dopamine hit, you're starting to feel good, and you're ready to take things on. So, come back for me to somebody they just lost their job, what are some insights right now the government um seems to be trying to do a fair amount to help people stay solvent. Um I went through a period where I was on unemployment. I I hit the pause button. I called out of panic. I was in a position I literally couldn't pay all my bills at once. I had to pick month by month like, "Okay, well, I'll pay this one to make sure that my electricity doesn't get shut off and then I'll pay this one to make sure that I have you know, I forget now. What are the government programs or things that people have available? Okay, so I'm really glad that you you have shared that you were on unemployment. I think anyone who has had a long career has had something bad happen to them. I was laid off from my own company. Right? So, there are everyone who has any experience, whether you're an employee or an entrepreneur, has had something bad happen to them. And I say that because I've had my own I Will Teach You To Be Rich readers who have come to me and some of them, as recently as 4 weeks ago, they were big ballers. They had great jobs. They were doing very well and suddenly they were laid off through no fault of their own. And now it is humiliating for them to have to go to the unemployment website. And my first response to them when they were DMing me was to say, "These services are here for you. You should not feel embarrassed about taking advantage of them. They are here for you. So, if it's a matter of pride or it's a matter of feeling bad, put it aside. Right? Rewrite that narrative in your head that I'm a failure because you're not and go take advantage of every resource you have available. Unemployment is one you should do that first thing if you've been laid off. Um you should also take a look at what you can control with your expenses. So, let's talk about that one year emergency fund. What is that? A lot of people mistakenly think, "Hey, I make 60k a year. My emergency fund needs to be 60k. There's no way I can save 60k. That's crazy." Well, you don't need 60k in full for your emergency fund. So, let's break it down. The way you do it is you imagine what is the minimum amount of money you need to live, to cover your rent, uh you know, if you if you or your partner got laid off, you would probably be cutting back quite a bit. Okay, how much does that cost? Then you say, "All right, I am going to take everything that I can and put it in an emergency fund in cash." Just a simple high-yield savings account. You don't need anything fancy. Now, a lot of people already have some money in savings. They've just never thought of it as part of an emergency fund. Other people have been following my book. They've been automatically investing. So, for them, I tell them, "Put your investments on pause and redirect that money to your emergency fund." Now, it's probably going to take people a while to save 12 months, but guess what? That's okay. Even if you get 7 months of the way there, that's better than nothing. And once you have that money, you have security, you have safety, you have the ability to breathe and think about a perspective for your job or your business that you want to start. So, that is what I would recommend. Take advantage of all the resources you've got. Redirect any money you can towards that emergency fund. And remember, it doesn't necessarily have to be your full salary. It's probably a fraction of that. Mhm. You talked about a high-yield savings account. Is that really a thing right now? Like, are people giving interest rates? Well, they're actually it's a good question cuz they're not really yielding high, but they're called high-yield savings account. Truthfully, uh people waste so much time chasing interest rates. I'm going to give you an example. People write me. I get these emails every single day. Uh Ramit, um my Ally account dropped from 1.5 to 1.35%. Oh, should I switch? I'm like, "Why are you emailing me this? Have you actually run the numbers on a $10,000 balance? We're talking about dollars per year. It's nothing." So, the key thing everybody needs to learn right now is you don't make money on your savings account. That's not where money is made. It's just meant to be safe and stable. The real place you make money from chapter seven in my book is investing. So, that's a whole different thing. We can talk about that for people who have money. Um but right now they're paying 0%, they're paying 0.5%. It doesn't really matter. It's just there so your money is liquid and available to you. Yeah, let's talk about the market. So, how are you thinking about that now? Um it scares me that I I literally in this day and age strike me down if I am wrong. But it it is crazy. If you have money in the stock market, A, put it in there assuming that you're going to leave it there for decades that at this point in time people still pull their money out in a panic. So, I like legitimately, dude. I don't even check. If I look at my numbers once every six months, like and even then I'm like up or down, it doesn't matter. It's all sort of phantom. It's like that's a 20-year play. Like Yeah. Don't Anyway, I'm not the finance guy. How are you thinking about the market? All right. So, I want to tell you this story. This I got this DM about two weeks ago. Someone DMs me on Instagram. I'm @ramit and she goes, "Ramit, I loved your book. Thank you. I read it. I just finished it two weeks ago. Anyway, I sold all my investments and the market went up like 12%. So, what do you think I should do?" And I was like I was like, "Did you miss pages zero through 300?" So, this is it's a teachable moment because I want everyone to understand how to think about your investments. And you're exactly right. When you invest something, you are not investing for money that you need in the next one, two, three, four, five years. This is money that is long-term money. And every study, and you can see them cited in chapter six of my book, shows that long-term passive investing, that is investment you're not checking every day, you're not trading. All that is Money you automatically contribute once a month and it goes in there, that's the money that makes you serious cash. Like real like multi-millions of dollars. Most people do not understand that. And again, remember what I said earlier, most people have never read a single book about personal finance. So, they have all kinds of kooky theories about money that they don't even know what they're saying. Do it for the tax deduction and all this crazy I'm like, pick up a book. That's what you really need to do. And so, when you learn this stuff, you learn that uh your money is there for the long term. You learn that costs really matter. You probably shouldn't be checking your investments more than once every months once every 6 months is even better. And you do not need to be selling it, especially now, unless you are truly truly out of money. And for most I would say like 99% of the people who write me asking if they should sell are not even close to an emergency situation. They're just afraid. Fear is the last thing you want. It will cost you dearly. Yeah, do you think this is crazy? So, if somebody came to me and said, "Hey, I don't have an emergency fund, but I'm thinking of investing in the stock market." I'd be like, "Yo, rule number one." And I always would have historically said 6 months, but 6 months of cash on hand. I always said that I wasn't smart enough to see a freezing of the economy like this, but my thing was like, so many people hate their jobs and part of the reason they don't quit is because they don't have the money. Like they can't afford to quit and that's such a shitty way to live. Now, add on top of that we all realize just how fragile the economy really is and anybody's job. So, do you think people should be investing if they don't have the 6 or 12 months in savings? Uh no, I don't now and I I've I've advised people as I said a 12-month emergency fund. So, that actually means that I would recommend people pause their investments and redirect it to a 12-month emergency fund. Number one, we You're right. We've seen how unstable our jobs can be with something like this. And um number two, if you don't build a habit of saving right now, you're never going to do it. You didn't do it when the economy was good. You're not doing it when the economy's bad. You're never going to do it. So, I want everyone listening to force themselves, take advantage of the situation, and really change your behaviors. Get that emergency fund in order. Yes, it will cost you because you won't be investing right now. And that sucks. But, if you don't have 12 months, that is the price you pay for not having saved it. And it's okay. All of us are operating at different levels. We all have different advantages in society. It doesn't mean that you're being penalized or that you're morally wrong, but I do believe you should focus on the emergency fund first, invest second. Yeah. Uh so, let's start with the person who lost their job. So, that person a lot of the the sort of paths that I could go down in terms of asking you take me to, you know, people that have money and can um operate from that position, but I think it's far more useful if we start with the person who's really in trouble. Um so, going back to the the CEO um saying so, we covered C, you cut expenses, we covered O, you're going to optimize the way that you're spending, you're going to get in there, you're going to get reductions and things. Talk to me about earning. What can people do now? They've lost their job. It is panic mode. My first advice was, if you can, get a roommate, move in back in with your parents, whatever. Like all the pride that might be you up, literally let it all go. Um I lived with in my mid-20s, I lived with my mother-in-law. So, it's like, eh, it just is what it is. And I had zero embarrassment over that. Let's Let's walk people through like what that would look like. What's your advice for earning money in this difficult time for somebody? Yeah. Um [clears throat] I'm going to talk about earning more and I'm going to give some real examples. I just want to say I think it's really amazing that you really owned that intentional shrinking of your life. And And it's really valuable for us to be able to hear the way you talk about it and for me to be able to see you because there's no shame in the way you're talking. You're like, "Look, I had to live with my mother-in-law. That's what I had to do." And all of us, you know, I grew up with immigrant parents. They came here. They had to do a lot of that when I look at it, I'm like, "I don't know if I could do that." Having been born and raised in America. But I often think about what I have seen in immigrant families. And the idea that we're going to do what it takes to survive and to eventually thrive. And if we can't thrive, at least our kids will. No shame. Just doing what it takes. And that is an attitude I think that has been lost a bit, but I hope is rekindled now because it is very empowering to say, "I'm not going to feel humiliated about having to do what I need to do for myself, for my family. I'm going to do it." So anyway, I appreciate you sharing that because it's it's rare that we get to hear those kind of stories. Um now, as for the earning more, what do you do? It's funny, you know, for the first thing that happened when coronavirus hit was people started emailing and DMing me and saying, um I I'll tell you about a real woman who DM'd me and she said, um "Ramit, I've been following you for 3 years." She said, "I'm a nurse and I was playing around with the idea of starting a business, but seeing everything that's going on, all this follow your passion, build logos, it all seems so ridiculous. It seems so foolish." And I said to her, I said, "You know, thanks for being in the health care field. I appreciate that. But if somebody needs a logo right now, that's not foolish at all. So, we have to remember that even when the economy has crashed, people are still willing to pay for the things that they want and the things that they need. And this has been true for thousands of years. People have paid to adorn themselves with clothes, they've paid for food, they've paid for entertainment. So, right now, what you see is really two different groups of people. You see the people whose first reaction is to say why everything won't work. Oh, nobody will pay for anything. There's no money around. And then you see the entrepreneurs who say, "Wait a minute. It's going to be harder. Certain industries are are not going to make any money right now. Fine, let me accept reality. But, wow, there's a lot of kids around sitting at home and their parents will pay anything so that they're learning something and leaving them alone so they can work. Wow, what are you doing on Friday night? Nothing, like every other Friday night. I will pay for something that my husband and I or my wife and I or my girlfriend and boyfriend and I can do just for 20 bucks just to let us enjoy life for that 2 hours on a Friday night. So, there are massive opportunities. I will tell you that we have seen our business continue to grow during this time and I have lots of examples of my own readers and students who have grown their businesses during this time, too. Yeah, that that is a really good point. And my my obsession is getting people to understand something that you have said multiple times here and I've I've seen your content a million times. And in my own words, it's you're going to see what you look for. So, if you're looking for the problems, you're going to see the problems. And it's like, dude, it's so simple and it's so easy and I want to like literally throw my computer across room because people just they don't I don't know if it is because it's so simple that they don't realize how much you yourself up by what you look for. And there's a great quote, I forget who it's by, but it doesn't matter what you look at, it matters what you see. And if you look at this legitimately, like in 2009 when we started Founding Quest, this was at the like height of the Great Recession. And we just it did it wasn't even like a part of the conversation about whether we could launch a company at that time. It was a question of is there a need that we can fill with this product? Can we add value to people's lives? Are we passionate? Are we interested? And then of course it ends up being huge. But it was like if people could have been there for the conversations and seen what we were looking for, which is oh, what what could we do that would really add value to people? What do we care about? What are we interested in? Like yo, like let's do this. Like this will be fun, this will be exciting. And if you ask yourself a fundamentally different question, and the question I highly encourage everyone to ask is what would I love failing at? And if you do that, dude, like then it all becomes fun. I can't guarantee that you're going to win, right? So I always tell people that success is not guaranteed, the struggle is. Okay, well if the struggle is the thing that's guaranteed, like what would you love going to bat for every day? But the problem is, like you said, people are just listing off all the reasons why it's not going to work, why they're backed into a corner, all of that. And I I cannot say enough. People are going to win in this time. We're People are going to win. They're going to be They're going to be people that come out of this with huge companies. The somebody laid out the number of tech companies that we think of today as being the behemoths, Uber, um they listed like six or seven, Zoom, that all came out during the Great Recession. And now they are dominant forces. But when they came out, it was like, "What are you doing? This is the worst time to start a business." Yeah, I started I my book came out March 2009. And that was the absolute worst point of the Great Recession. And I love what you said about the conversations you were having. Let me tell you the conversations I had. So, I had a book on money and investing I Will Teach You to Be Rich, the first edition came out. I went on tour to all these cities. All these local news producers would come into the green room before I went on air. And they say, "What are you planning to talk about?" And I would say, "Well, I'm going to talk about how to negotiate your salary, how to invest for the long term." And on and on and on. And they looked at me like I was a Martian. They're like, "Are you aware there is 10% unemployment?" And I said, "Yeah, I get that. I I know what's going on. If you want me to give you a couple of savings tips, I'll give you those. But, are you also aware that there are literally tens of millions of people in this country who want to invest in themselves, who understand that although this is a huge issue, this is temporary, and that we will go back to growth?" And they just looked at me like I was crazy. Luckily, I don't have a boss. I'm my own boss. So, I went out on air, I said what I wanted to say. And this is where as an entrepreneur, you have to have some conviction. You also have to borderline ignore lots of people who will tell you you're crazy. Because it's easy for people to give you drive-by advice. Look, they're they're just driving by. Oh, the economy sucks. Oh, that'll never work. And they're basically saying, "Screw you. You should give up." And And you know what? It's easy to identify the drive-by advisors. Much harder to identify your own mind playing tricks on you. When you start to say things like, "This will never work because" or "Who would ever buy this right now?" you are doing the same thing those drive-by advisors are doing. You're just driving BY YOUR OWN HEAD. YOU'RE SAYING, "That'll never work." So, my advice to you on that is don't try to deny it. Your mind will always play from a position of safety, not excellence. And so, acknowledge it. Write it down and say, "Okay, this will never work. This is horrible. I suck. I'm not good." Write it down. But then open up another piece of paper and say, "Okay, I wrote down all the reasons that this might fail. Now let me write down all the reasons that this might succeed." And then take those two pieces of paper and look and you choose which one you want to follow. Dude, you just said something that freaked me out, cut all the way to my soul, which is that your mind will operate from a place of safety, not excellence. That is so even you're saying it again, it gives me the chills. To see those as as sides of a coin or opposites maybe is a more interesting way to think of it. And that brings me to something that I think is so so so important. You give some of the world's best advice, no on how to go in and negotiate a raise. Talk to me in terms of how can people get a job? So if you just lost your job, like how do you be the kind of person that's going to get hired? Cuz my thing is, look, you talk about accept reality. Here's the reality, boys and girls, we've got what, approaching 30 million people out of work. This just became an employer's market. You've just had what, 10, 15 years of being an employee's market. That is over. Now you're going to be going into a fiercely competitive environment. And the question is, how do you stand out? Yeah. I love talking about this. I really enjoyed last time we were at your place and talking about the salary negotiation. That was a blast. So I want to share what I have found in the last 1 month. So I have access to a lot of hiring managers, both my friends and in my I will teach you to be rich community. And I reached out to them and I said, "Hiring managers, tell me what are you seeing?" And I also reached out to job applicants. I said, "What are you seeing?" So here's what I heard. First off, the job applicants. One of them told me, "I had four interviews going. Three of them dropped off the face of the earth. They just stopped responding." Okay? That was a very common trend. Um I've heard from job applicants that the the markets they were going after just completely dried up. So, very common. Interestingly, on the hiring manager side, there were some people who said there are hiring freezes that were immediately instituted, but I had some hiring managers who said, "We are hiring and we can't get enough applicants." And I said, "Why do you think that is?" They're like, "I think nobody thinks anyone's hiring." So, there's a whole game being played around us. And of course, it's true that right now it's an employer's job market. Of course, it's true that it's fiercely competitive. But that doesn't mean we shouldn't still focus on landing a job. Now, I want to tell you how I think about landing a job right now. Most people when they see an ambiguous situation, they get scared and they freeze. They wait for someone to tell them what to do. That's because that's what we've been taught since we were kids. Oh, I don't know what to do. Is the teacher going to tell me to go over here or go over there? And we've been indoctrinated. Okay? But in times of ambiguity, I think we love it. You and I, we love We're like, "Ambiguous? Great. I'll create my own opportunity." So, imagine that you see a job that's in Washington, D.C. And you live in Seattle. And it says, "Requires 8 years of experience and D.C. based, blah blah blah." I would look at that and say, "Fucking great. I only have 3 years of experience and I live in Seattle. I'm going to write the most amazing cover letter and tell them why I deserve this job. I'm going to point to the exact briefcase technique things that I've implemented." You guys can Google briefcase technique and learn about that. And I'm going to tell them, "Look, I work in Seattle. We can discuss D.C., but nobody's working physically right now. So, we might as well just get this started so you don't have to wait for the right candidate. I am the right candidate." In other words, take all the rules and put them aside. It's a different time. For most people, they get scared by that ambiguity. For you, you're listening to this, you're watching this, you can create your own rules right now. In the old days, when people used to carry around a briefcase, you go in for an interview and they say, "All right, tell me, you know, tell me about yourself, blah, blah, blah." Those are all rote questions and yes, you should answer them. But, what really distinguishes a top performer in an interview is that they say, "Oh, let me tell you know, I spoke to several people on your team. I did a little research. I studied the interviews you've given to the press recently and I put together a little 90-day plan for what I would do in my role. Let me show you." Boom! You theatrically pull out your briefcase, you give them a copy of your document, and then you say, "Let me walk you through this." Now, as you do this, the manager's jaw drops. You know, she can't believe that somebody came in and did this level of preparation. Now, let's just zoom out for a second. There's two types of people listening to this right now. The first type is saying, "Ho, ho, Ramit, how are you going to find out any of the information? You're so presumptuous. Ho, ho, who would ever think that you could go in and tell a company what to do?" Those people will fail because you're looking for reasons for this exercise not to work. So, why don't you just give up right now and save the middleman? You're always going to look for why something won't work. The other people, aka the thousands of people online who have publicly talked about using the briefcase technique, they go in and they do their homework. They use what we call natural networking from our career program. They meet other people at the company. They study what the company's strategies are. They also accept that they probably can't get it all right from the outside. They're doing the best they can. 85% is better than nothing. And they walk in with a proposal, and although their proposal isn't going to be perfect because they're on the outside, they did more than anyone else, and they just decimate the competition. And we see what you, a hiring manager, do when you see that. Your jaw drops, and you can't help but hire that person. Dude, that is that is the gospel truth. One of the things that I always worry about with people in a time of crisis, and this speaks to you saying people freeze, is if you're in fight or flight mode, quite literally, the blood is leaving your prefrontal cortex. Your um cortisol levels, the stress hormones, skyrocket. You actually don't think well. And so, being able to find a way to center yourself, to calm down, to get focused, so that you can execute on creating a plan, you know, just to keep it to the 90-day plan, to create a plan that's actually useful, you're not coming from a place of desperation, you're not coming from a place of panic, like you're really getting yourself to leverage the skills that you have. And then, if you don't have skills, now is the time, man. Like, you've got to be building that skill set. Man, I'm so glad you're talking about this. So, I want to share how I implement uh some strategies for that. So, for people watching and listening, you know, our business, we have about 20 or 20 five different programs, everything from Earnable, Start a Business, Find Your Dream Job, Learn How to Find the Job and Actually Interview and Use the All That Stuff. Um but, I don't allow people with credit card debt to join the flagship programs, the really high-end ones. And that decision costs us millions of dollars every single year. Now, why do I do that? There's a couple of reasons. Number one, I believe that if people had all the information and motivation in the world about credit card interest rates, for example, that they would pay off their credit card debt first before joining our fairly expensive $2,000 or more programs. That's logical if you understood the math. So, and the second thing is it's just the right thing to do. I don't want to take somebody's money when they can pay off their debt, use chapter one of my book, and then come back. We'll be here. We've been here 16 years. We'll be here 16 more. Yeah. But, the third thing is people can't focus on long-term work if they're worried about how they're going to pay their rent. And that's why for everybody listening, if you're thinking about starting a business or finding a job, etc., first thing you got to do is take care of yourself and your loved ones. And that means make sure you have a plan for your rent. Make sure that you know, you know, what what is your son or daughter going to be doing tomorrow when they're at home? Are they going to be learning something? Are they going to be watching TV? Whatever the case is. You got to cover the basics first. If you don't cover the basics, and then you go try look for a job, of course you're not going to be competitive with someone else who's methodical, calm, cool, and collected. So, I want everyone to really understand and internalize what you said. It all comes in steps. And if you're going out trying to compete with other top performers, you need to be in fighting condition as well. Yeah, man, that's really an interesting approach. And first of all, 16 years, I knew you'd been in business for more than 10. Congratulations. That's That's huge. That is not easy to pull off. Um, especially given that this all, you know, what you would have been going through 16 years ago in terms of the ups and downs of the economy. Um, super impressive. So, dude, I think you have some of the best actionable advice for like people at a personal level. Where can people connect with you? Where can they get that um, daily or weekly dose of of advice as they navigate through this? So, you can find me at iwillteachyoutoberich.com. The newsletter is the primary place. We send a lot of our best stuff there. If you want to know, uh, I'm on Instagram @ramit. I'm on YouTube @ramit sethi, and I'm on Twitter @ramit. Overall, I I want people to remember that there are some different ways of thinking about money, business, and careers than you have been taught from the general mass media. And if they're listening and watching right here, they know they're getting a different perspective. So, I want people to know you don't have to only cut back, you can earn more, that even in times like this of crisis, you don't have to play defense, you can actually go on offense, and that there is a light at the end of the tunnel. Whether you are a beginning entrepreneur or you work a 9-5, there is an approach you can take that's going to set you up for success. So, that's what I hope people find in my material. No question, man. So, last question I have for you. If people are going to make one change that would have the biggest impact on them weathering the storm, um what change would you have them make? Uh take your calendar, blank it out right now. Just wipe everything off and start planning your week for how you want your day to go. And do it just for 5 days. Honor the calendar you set. Pick your time and make it valuable for the things you care about. If it's your relationships, put the time on the calendar. If it's finding a job, do that. If it's optimizing your personal finances, do that. But, start by taking control of your time, your process, and the results will follow. Mhm. I love that. Remit, dude, thank you so much for coming on, man. I really hope people will follow up and stay engaged with what you're doing. I've watched a ton of your content. Um the stuff that you were doing nightly, the fireside chats and stuff. Um it's powerful, dude, and if people actually take the advice, I'm telling you guys, this is a weatherable storm. Uh but, you actually have to put into action the things that he's talking about. If you just listen and you don't actually do it, um this really will be uh just an excruciatingly brutal time. But, I promise there is a port in every storm, and I think his advice is exactly that. Speaking of a port in storm, if you haven't already, be sure to subscribe. And until next time, my friends, be legendary. Take care. First way that most people think is like, [music] if I'm going to negotiate for a raise, which like, oh, they might just like fire me. That's problem number one. That's That's the wrong way to look at it. If you go in and [music] ask for a raise, you're not devaluing yourself. You're actually increasing your value.