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Friday, May 10, 2024

Couple With 2 Kids Refuse to Work 9-5, Have No Investments But Want to Pursue Business

Callie, 36, and Travis, 39, live in South Texas, near the ocean, with their two kids. They consciously decided to become entrepreneurs to step out of the 9-5 jobs and avoid the rat race of climbing the corporate ladder.

Callie left her $80,000 job four years back, and it took her a while to return to that income level. However, they are determined to work for themselves to retain flexible schedules and grow the life they seek, but now feel they are in this “hustle loop” that offers freedom at the cost of risking working their entire lives.

The couple engages in healthy conversations about money, ensures paying bills on time, and has a joint account for expenses, but prioritizes short-term experiences over long-term goals.

Despite a combined annual gross income of $132,480, they go broke every month as their fixed costs are over 80% of their take-home salaries. While they have total assets worth $300,000, Callie and Travis are $175,000 deep in debt, have zero investments, and have only $4,500 in savings.

Seeing no end to their hustle and complicated finances, they finally sought ↗ money advice from Ramit Sethi, millionaire author and the host of the Netflix show “How To Get Rich.”

Sethi understood that the couple’s limited vision of living paycheck to paycheck, valuing their time and experience over money, and grinding it out with side jobs to make up surprise expenses was instilled in them by their entrepreneur parents, who barely get by today.

Problems Cropped Up When Travis’ Business Stalled Last Year

When Travis’ vacation rental business hit a slump in late 2023, Callie looked deeper into their budgets for the first time. She found payments they couldn’t afford, such as Travis’ $800 monthly truck repayment. He’d use the truck for business and knew the payments were high, but justified it by thinking he had no office space or associated costs.

As an intelligent couple, they decided to trade in the truck to eliminate the payments. Callie gave her Ford Transit van to Travis and got herself a Nissan Rogue. In the whole process, she shelled out $4,000 from her savings to make a down payment, reducing the overall monthly payments to $300.

While Callie made money decisions as a family, Travis appeared detached. He began making financial moves that affected Callie’s budget, giving rise to turmoil in their loving relationship of more than five years.

Travis bought a rack and an awning for the car he got from Callie for $300 monthly payments. That didn’t go well with Callie. She saw her savings as a security blanket, and parting with it to see her husband rack up more debt wasn’t acceptable.

Travis saved a bunch of money on his truck that Callie helped out with, and because he saw some extra cash in his account, he went for the awning. Sethi said this exact behaviour of buying and then budgeting is very common.

To Sethi’s surprise, Travis was unaware of how much he earns on average per month. He said the nature of the business (property management) involves paying many people alongside various maintenance and replacement costs, making it challenging to maintain records. When asked why he didn’t hire a bookkeeper, Travis swiftly said he would; this is another red flag for Sethi.

Meanwhile, Callie wants to work smarter, and whatever money they are making, she wants it to be so intentional that their lives are better. Sethi concurred with them that a rich life is something you intentionally design.

He explained that the first step is to understand the kind of rich life you want, figure out the money you need, and then start working on plans to bring that money every month. However, the more “alternative your rich life is, the more dialled in you have to be about the number, or else there’s a good chance of working tons of hours at minimum wage for a long time and never getting ahead,” Sethi added.

Travis Was Shielded From Money Problems As a Kid, Callie’s Childhood Was a Rollercoaster

Callie said she loves Travis because he is “chill and goes with the flow.” However, she has been trying to snap him out of that train because they have no savings, investments, or an emergency fund for any eventualities.

As chill as always, Travis confessed he thinks of making enough to live and care for what they need in the short term. He grew up in a middle-class family with three sisters in South Texas. Travis’ parents were entrepreneurs, but his mom would handle all the bookkeeping.

As a kid, he seldom heard his parents talking about money but slowly understood that they’d go into debt for their kids. Travis recalled how he got a brand new truck at graduation, something he didn’t think his parents had money for. They didn’t even save for retirement, and now his parents are separated. His dad lives off an inheritance while his mom barely makes it with social security payments, which Travis and Callie want to help with.

Sethi realized that Travis was spending $300 monthly on a truck rack while intending to help her mom, who had spaghetti because that was the cheapest meal. He understood that what Travis claimed was important wasn’t showing in his spending because of extreme compartmentalization.

Meanwhile, Callie’s childhood was a rollercoaster primarily because of money issues. Her parents were also entrepreneurs, and they moved around a lot. When she was 17, she saw her parents losing cars and the house when their business crumbled. Callie believes she grew up differently because her parents imbibed a sense of “hustle culture” in her head.

She paid for college, took out student loans to cover what she couldn’t, and moved to Austin for a job. In her first year out of college, life became even more complicated when she “accidentally” got pregnant and received no child support. With a hustler mindset and a purpose to raise a child without the problems she has faced, Callie faced challenges head-on and worked very hard to offer her kid a good life.

With this newfound “can do” attitude, Callie came to the point where she believed everything was possible. As inspiring as that is, the stress of being constantly on overdrive about putting food on the table wore her out. She wants to get off that flight-and-fight mode now that she can find support from her husband, but it takes work when you create a personality based on pride and the empowerment that came with years of hustling.

Her self-worth is tied up with her achievements, which made her successful in some ways, and “crippled” her in other ways. Until last year, she viewed her money as separate from Travis’, but the growing anxiety over inconsistent income without any safety blanket pushed her to include him in this money journey for their kids’ future.

When Sethi asked Callie what if Travis never cared about the long-term, Callie said she’d do it with or without him, but she wanted to do it with him. Sethi highlighted they have been thinking about random, one-off jobs to make up for the lost time and future life goals. Without strategy or consistency, they set themselves up to grind for the rest of their lives.

What Is The Couple Up to Now?

What Sethi managed to do in his call with Callie and Travis was create a connection between them since Travis was closed off to money talks, especially long-term goals. Sethi urged them to think bigger and for the long term. For instance, go from thinking about the next month to creating a 5-year financial roadmap.

In their follow-up call, the couple shared that they have opened new Roth IRA accounts and are contributing $500 towards their long-term goals. Travis is working on bookkeeping and has made several changes to his business to lower overheads and improve margins.

The biggest takeaway was how changing the way they look at their jobs. Once they did, it helped them understand how short-sighted with savings they were. Now, they plan to work together to provide a future for their kids that they never had.

Kaylie Pferten
Kaylie Pferten
A pilot of submersible crafts in a former life, now married to my husband David and writing about investment advice.

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