“He put $1M into a risky investment…Will we lose it all?”

Ramit Sethi of I Will Teach You To Be Rich talks to Sandra, 46, and Brad, 48. They return for Part 2 as we get our hands dirty with their incredible decision to invest $1,000,000—their entire net worth—into one oil operation. It’s paying out $20k a month right now, and Brad’s done his research to feel confident. But Sandra can’t handle the risk.

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[ramitsethi]

Please remember: These are real people who had the courage to come on my podcast and ask for help. Would you be willing to come on this podcast and share every detail of your financial life? Feel free to leave comments based on what you think, but remember that we are here to help in a supportive way, not to demean and criticize.

[spencer]

I really hope that Brad researched the oil venture and this new business venture a lot more than he investigated how to be a teacher.

[ousfo]

I could tell that half way through, Brad just gave up and decided to agree with Ramit on everything. He faked being a team player and taking advice just to get off this call.

[klt]

While I absolutely appreciate the courage it takes to come on this podcast and open yourself up to the world, I am completely taken aback by Brad’s attitude. He wants to teach personal finance and yet doesn’t understand it for himself. He wants to have businesses instead of working even if what his family needs now is some stability. He wants to continue to invest in get rich quick schemes instead of a new, full informed and boring approach. I can see why his wife is anxious. There is no balance in this approach. It is all risk.

[lizcademy]

Two finance mistakes I see here.

1. Brad's oil investment is NOT paying dividends — it's returning his own capital, a small amount at a time.
If Brad decided to get out of the investment immediately, he would not get his $1MM back. He would only get the payouts he received until the day he gets out, not a penny more.
This is where the real risk comes in ... if the oil company crashed, or Brad left after collecting $600k, he would have a LOSS of $400k or 40%.

2. I've seen several videos where people don't understand that an IRA, 401(k), 529 is NOT an investment — it's an account type that can hold different investments and has different restrictions and tax consequences.
You can put crap investments (penny stocks, junk bonds) in a Roth IRA and lose money.
I think Ramit should emphasize this a bit more.

FYI, I'm an old Boomer lady with an MBA in Finance currently working as a web developer at a major investment house. I started reading personal finance books before Ramit was born. His advice and psychology is some of the best I've ever seen.

[dutchcrunch]

I can see why Sandra doesn’t feel the $20, 000 per month is income. If $1mm of investment was used for the oil rig venture then the $20K per month is just refilling that investment bucket. Anything over and above that original capital could be considered income. This is a super risky investment that can go to $0. It’s not like putting $1mm into a Vanguard fund.

[maythineeTV]

It is wild to me that Brad felt attacked and didnt even care to write the email himself-- it's especially wild to me after listening to eps with guys who have been in more dire straits (overwhelming debt, repeating unhealthy patterns with money, lower incomes over adulthood, both partners are unskilled with money), but those dudes were able to own their mistakes or at least get curious about it getting the same level of truth speaking thrown at them by Ramit. The truth wasnt "nice" but it was KIND. Brad is a conventionally attactive white guy and probably has rarely if ever been in positions where his worldview is directly challenged. He said in the previous ep that he thinks those that are righteous get blessings, so probably to him in his mind, who is this guy Ramit think he is to challenge that? Especially when these oil guys make him feel like he's one of them, temporarily in jeopardy, but a multimillionaire in the making, bc no risk, no reward, #amirite?. He needs to own that he makes emotional decisions driven by wanting to be the white knight/hero/savior to keep up appearances trussed up by his ego. If that all feels threatened by some advice he got for free, he's got some work to do.

[topseekrit]

Shoutout to Ramit for having the patience to deal with this couple. They’re both triggering each other’s buttons in the worse way. It’s stressful and exhausting as a viewer, can’t imagine what it’s like to help them dig themselves out of this delusional hole.

[heatherm]

I wish both Sandra and Brad the best - - together or apart. This episode felt like watching a marriage falling apart. Brad talks about leaving Sandra throughout the episode - - - I wonder if the divorce he threatens with will be a catalyst for Brad to get a fulltime job? I was also shocked that Brad put the weight of his risky investment decisions on Sandra's need to feel safe. I truly hope he can listen to his words and see that his high risk tolerance is the opposite of what his wife is looking for.

[karenholloway]

As incredibly difficult as it must be to put all this out on the Internet, there has to be a level of embarrassment on the husband’s part. Remit was totally on point, kind and did not attack at all. it makes complete sense to run best and worst case scenario. That investment is terrifying. I would not be able to be as kind as she is with this level of risk & lack of ambition. Wishing them both well.

[nigel]

I can see that the husband felt attacked, but Ramit was just giving his opinion on how much risk he was taking. The wife didn't want him taking all that risk so he shouldn't have invested all of THEIR money.

[virginiasteiblen]

As a teacher it’s insulting when people view teaching as a cush, semi-retirement job.

It’s a tough job, and a stable paycheck + time off isn’t enough to keep most people in it (or to make you an effective teacher for your students).

I have seen 2 men in their late 40s/early 50s start teaching at my school; a former engineer and a former lawyer. Neither made it past the first year, and I witnessed both crying at some point in the year due to the cruelty of the students, or overwhelming amount of work.

I would caution Brad against pursuing a career change to education, there are easier ways to make ~50k/year.

[jip]

What Brad doesn't seem to understand - if this investment average investor has $60M in the project, why the heck would they allow him to invest with $1M?? A general partner in an oil drilling project wants to deal with as few investors/partners as possible, and unless Brad has some special deal or is a friend or family member, why cut him in at $1M when the average investor has $60M?? Brad is being scammed and he doesn't even know it. I have a feeling it isn't the final time Brad will be involved in some sort of scam - Sandra needs to completely take the reigns on the money before Brad puts them under

[dm]

She works full time and another part-time job and is a Mom to 4 kids, and she needs to tiptoe around him to make sure he doesn't get mad?? Does anyone else see the discrepancy?

[mbens]

Thanks to Sandra and Brad for their participation. Brad mentioned several times that there are people investing tens of millions in the fracking group, which helped to provide security in his mind. Perhaps those people have hundreds of millions in the bank, so that amount could be an appropriately diversified investment for them. Percentages matter. I hope the investment works out for them.

[El-wfzx]

Securing a full time position at a university or community college is very very difficult, even in business, marketing, or finance. I speak from experience as I was on a community college hiring committee for a full-time business instructor position and there were more than fifty resumes submitted and 8 brought in to interview and provide a teaching demo. And the person ultimately hired started out at 60k a year, which is about half of what Brad claims he can easily secure. I’m in a middle to high middle cost of living metro area. There have been other couples on this podcast who think securing academic positions are well within reach. They are not.

[CherieMonique]

I know they have to count the $20 k as income but it’s literally not. They had a huge lump sum to work with. The fact that they gave it to the oil people who now give it back to them in bits and pieces as they are being taxed on it as dividends and now they have to live off of it and then invest the rest when they haven’t even recouped their initial investment is mind blowing. They could have skipped all this and just invested to begin with. I would feel insecure too up until I recouped that investment…which, if they’re lucky, is several years from now. Not a great feeling.

[KatherineWu]

Man, I was feeling hopeful that the couple had made a breakthrough on seeing each others' perspectives, but the follow up email about Brad feeling attacked and not wanting to engage further seems pretty concerning for whether they'll execute on the plan as discussed.

[HApqzr]

If they had put their $1.25M into index funds, assuming 8% CAGR, they’d be at almost $4M in 15 years.

[dm]

He doesn't want to work that is why he is so triggered by her questions.