A couple, previously buoyed by more than $200,000 in cryptocurrency gains, now finds themselves struggling with approximately $4,000 in assets and significant debt. During an appearance on the “I Will Teach You To Be Rich” podcast, host Ramit Sethi spoke with David, who revealed that their financial troubles stemmed from treating their crypto earnings like income. As a result, both in their early 30s, the couple currently resides with David’s mother and is raising their 5-year-old daughter due to a series of unstable job choices and poor spending habits.
Angela, in her application to appear on the podcast, noted that they had “lived a rich life as if we were actually rich,” which included quitting lower-paying jobs even as their savings dwindled. Sethi critiqued this mindset, highlighting the lack of a structured financial plan and emphasizing that their decision-making lacked timelines and accountability. David candidly admitted that while they exerted effort, they failed to create a cohesive plan that outlined clear expectations and follow-through for their work and financial matters.
The couple’s strained living situation is exacerbated by the current arrangement, as Angela expressed the challenges of disrupted sleep, limited privacy, and constant tension within the confines of a small home shared with David’s mother. Despite not having to pay rent, their financial outlook remains precarious, with figures from the podcast revealing a debt of $34,632 against assets of only $4,000, resulting in a negative net worth of $25,629. This financial breakdown included $4,242 in savings and $761 in investments.
Sethi warned that their fixed costs might seem manageable without current housing expenses, but would rapidly destabilize if rent were to be factored back in. David revealed that for the past year, his mother has been covering all their expenses, which has contributed to nearly $90,000 in credit card debt and a second mortgage on her home.
Angela attributed part of their financial struggles to a childhood where discussions of money were scarce and volatile. David reflected on his early investment successes, which led him to depend on sudden windfalls rather than stable income. Sethi encouraged the couple to embrace the inevitability of failure in the learning process and suggested that they should plan for setbacks rather than trying to avoid them altogether.
As their crypto investments transitioned into cash, the couple faced the daunting task of managing a substantial sum that required careful tracking and planning. Tools like Kraken Pro, which offer centralized views of crypto assets, could help in understanding their finances better post-cash-out.
The conversation underscores the need for structured financial planning and realistic approaches to managing income and expenses, especially for those transitioning from volatile investments to stable financial footing.
