[00:30:32] Ramit: How come we spend so much time talking about 7-Eleven snacks and yet here we are with over $70,000 in credit cards, a $69,000 car loan?
[00:30:45] Phumelele: I know. Yes, I knew that was coming. I don’t even know why we got that car to be honest. Because we did the math on it, and we couldn’t afford it. And then I don’t know what happened, and we–not that I don’t know what happened. I know what happened.
[00:31:00] Ramit: What happened?
[00:31:01] Phumelele: We still wanted that because I just knew how to do things, so I said, yes, it’s fine. We’ll see how we can make it work.
[00:31:08] Ramit: And when you get it, who do you become in a relationship?
[00:31:13] Phumelele: A hero.
[00:31:14] Ramit: Yes. And so, what kind of car was it, Kevin?
[00:31:18] Kevin: I have a BMW. A lot of this was before I took that pay cut, but now that I’ve taken that pay cut, it’s pretty funny, and I know I have to get out of it.
[00:31:32] Rami: So how come you don’t have one?
[00:31:33] Phumelele: Because we will lose. I mean, regardless.
[00:31:37] Kevin: Yes. So the reason-
[00:31:39] Phumelele: How much did the car cost? You made Kelly Blue.
[00:31:43] Kevin: Yes. So the car is worth about 48,000, and 69 is what I owe on it. So I could lose, but we didn’t take the time to go in and figure out what our best option was, to be honest. The reason I stayed with them – so I had a BMW before. His is a Mercedes. So we both have fancy cars that we have no reason to get into.
[00:32:08] Ramit: He has a BMW and a Mercedes.
[00:32:11] Kevin: Yes. That is actually part of our salary.
[00:32:14] Rami: Mm-hmm. And those cars also take expensive fuel, huh?
[00:32:18] Kevin: That’s why I say I spend a lot of money on gas.
[00:32:23] Ramit: How did you get the cars? That’s what I’m curious about.
[00:32:26] Phumelele: I don’t know. I’ve always owned a luxury car since I was a kid.
[00:32:29] Ramit: Oh, that’s a good reason to-
[00:32:31] Phumelele: After all, my father always had a luxury car. I don’t know, it just seemed like an asset that you had that. It made you feel happy because you are working hard. You want to have a nice car.
[00:32:42] So I’ve always loved having a nice car. This goes into detail, but I had a Lexus RX 500. Paid off. It was fun. It was good. And one day, I don’t know what happened. We went into the dealership, looked at the cars, and there is a very nice BMW series.
[00:33:03] So I traded in my Lexus for a leased BMW. So after that, we had a baby. It was too small for the baby and everything, so I decided on the Mercedes. It was big.
[00:33:17] Ramit: Hold on, hold on. This is classic Americana in the worst ways. First, comfort. How much did you make when you owned that Lexus?
[00:33:28] Phumelele: Maybe $60,000, $70,000 a year.
[00:33:31] Ramit: That’s right. Thank you. This makes my story even better. Making $70,000 a year, buying a Lexus. Basically, you spend 100% of your income on a car. Then you go, hey, this car is paid for. I know what I’m going to do. I will earn more payments.
[00:33:44] Phumelele: It was the worst thing I have ever done.
[00:33:46] Ramit: So get in there. And then the minute you have a baby, what does every single parent in America do? We need a house and an SUV. Why? Because our baby who can’t even move needs to move around.
[00:34:00] Phumelele: That’s right. Yes I know.
[00:34:01] Ramit: So you go, you buy things 1, 2, 3. Income goes down. One of you goes to school, one of you takes time off from work, etc. So you have these rising costs, less income. Heavy expenses with a child. So what happened? You are trapped.
[00:34:18] Phumelele: It’s stuck. Yes.