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I Will Teach You to Be Rich: No Guilt. No Excuses. No B.S. Just a 6-Week Program That Works.
Ramit Sethi is “the new finance guru” (Fortune), “a unique voice on money, one singularly attuned to . . . his generation” (San Francisco Chronicle). He reaches over 500,000 followers a month on his website, iwillteachyoutoberich.com. And his book, I Will Teach You to Be Rich, is a New York Times bestseller with 383,000 copies in print—and the kind of backlist title that is so robust that its sales increase year after year. Now on the eve of its tenth anniversary comes a significant cover-to-cover revision.
At the core of the book is Ramit’s extraordinarily simple, powerful, and effective six-week program for gaining control over your finances. Written in an irreverent and entertaining style, I Will Teach You to Be Rich shows you step-by-step how to beat banks and credit cards at the fee game, automate your savings and investments, negotiate a raise, manage student loans, and enjoy vacations and other things you love by practicing conscious spending.
In addition to completely updating everything from interest rates to financial instruments, Ramit has added a new dimension to the book: a guide for how to live a “rich life”—a life where money brings meaning, where you can afford to give back, and where experiences, and the time to pursue them, are a priority.
At the core of the book is Ramit’s extraordinarily simple, powerful, and effective six-week program for gaining control over your finances. Written in an irreverent and entertaining style, I Will Teach You to Be Rich shows you step-by-step how to beat banks and credit cards at the fee game, automate your savings and investments, negotiate a raise, manage student loans, and enjoy vacations and other things you love by practicing conscious spending.
In addition to completely updating everything from interest rates to financial instruments, Ramit has added a new dimension to the book: a guide for how to live a “rich life”—a life where money brings meaning, where you can afford to give back, and where experiences, and the time to pursue them, are a priority.
353 pages, Kindle Edition
First published January 1, 2009
About the author
Ramit Sethi
39 books1,013 followersRamit Sethi is New York Times best-selling author of I Will Teach You To Be Rich. His blog, iwillteachyoutoberich.com, hosts over 300,000 readers every month. He co-founded PBwiki and graduated from Stanford, where he studied technology and psychology. He lives in San Francisco, CA.
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April 23, 2024
This is one of my favorite personal finance books. It's a logical, step-by-step, practical handbook for financial success, specially written for those in their 20s and 30s, but also useful for others. The book gives fairly in-depth explanations of personal finance fundamentals, but also contains plenty of examples of actual accounts and funds. I know Sethi tries to sound casual and irreverent, but I dislike his profanity. The book is full of quotes from Sethi's followers, which add little value, and I'd rather do without.
The book is written in the form of a 6-week action plan. Each chapter describes the tasks and reasoning behind them, and ends with a checklist of steps to take. Here are the weeks:
1. Set up credit cards, pay off debt, master credit history and credit rewards
2. Set up bank accounts
3. Open 401(k) and investment account
4. Figure out what you're spending, make spending plan
5. Automate transfers between accounts
6. Invest in stock market
Sethi gives advice on “automatically enabling yourself to save, invest, and spend - enjoying it, not feeling guilty … because you’re spending only what you have.” His main point: automate your finances so you effortlessly save and invest, leaving you money to spend on things you love without feeling guilty. Automatic saving and investing helps overcome psychological barriers and laziness.
In addition to his emphasis on automation, I agreed with Sethi’s recommendation for long-term, passive, buy-and-hold investing instead of speculative, market-timing investing. I also liked Sethi’s 85 Percent Solution, which states that it's better to act and get it 85% right than to do 0%; sometimes good enough is good enough, and it’s always better than doing nothing.
Another message is "spend extravagantly on the things you love and cut costs mercilessly on the things you don't." That's valuable because everyone defines being "rich" differently, and it's not all about money. Money is just the tool we use to acquire the material possessions and experiences we want. That's the difference between being cheap and being frugal; being cheap is trying to cut spending on everything, and being frugal is cutting costs on the things you don't care about so that you can splurge on the things you do.
I liked the concept of making a Conscious Spending Plan, which lets you spend a certain percentage of your money on whatever you want, without feeling guilty, since you’re paying yourself and your bills first.
I don't like that Sethi waits until the last chapter to mention donating, and he says to do it after meeting other financial goals. I wish he would've mentioned it earlier, and advocated giving throughout one's life.
Notes
Would You Rather Be Sexy or Rich?
Focus on the big wins: the 5-10 things that give disproportionate results (automate, saving and investing, find job you love, negotiate salary).
There's a limit to how much you can cut, but no limit to how much you can earn.
Optimize Your Credit Cards
If you're booking travel or dining out, use a travel card (Sethi likes Chase Sapphire Reserve). For everything else, use a cash back card (Sethi likes Alliant).
For business, Sethi uses a Capital One cash back card. For extra benefits, he uses an Amex Platinum.
A month before a card's annual fee hits, ask card company to waive it.
When you want a fee removed, don't ask, "Can you remove this?" Say, "I'd like to have this removed." If they resist, say, "I've been a customer for X years, and I'd hate for this one fee to drive me away from your service."
Sethi no longer recommends credit unions because they don't deliver solutions people care about.
Beat the Banks
Recommended banks
• Checking: Schwab Bank Investor Checking with Schwab One Brokerage Account, and/or local bank if you need to deposit cash Latest recommendations
• Savings: Capital One 360 Savings, All Online Savings, Marcus by Goldman Sachs, American Express Personal Savings Latest recommendations
Sethi recommends avoiding Bank of America and Wells Fargo.
Leave 1.5 mos living expenses in checking account, and put rest in savings.
Get Ready to Invest
People are afraid of possibly losing money in stocks, when they should fear certainly running out of money if they don't invest.
Ladder of Personal Finance
1. Invest enough in 401(k) to get company match (if there's no match, skip to Rung 4)
2. Pay off debt (other than student loans)
3. Invest as much as possible in Roth IRA
4. If you have money left, invest as much as possible into 401(k)
5. If you have money left, invest as much as possible in non-retirement (taxable) account, pay extra toward mortgage, invest in yourself (start company, get degree, etc.)
Even though you could make more money by investing than by paying off debt, pay off debt (besides student loans) to remove barriers to becoming rich.
You can withdraw principal from Roth IRA penalty-free, and there are exceptions for home down payments, education, and emergencies, if account has been open over 5 yrs.
Save, don't invest, money needed in under 5 yrs.
Recommended discount brokerages: Vanguard (Sethi's choice), Schwab, Fidelity
Sethi says robo-advisors are good options, but not the best, because they're not worth the costs and use marketing gimmicks.
Conscious Spending
Cheap people care about costs; conscious spenders care about value. Cheap people try to get lowest price on everything; conscious spenders try to get lowest price on most things, but spend extravagantly on things they care about. Cheap people's cheapness affects others; conscious spenders' frugality affects only them. Cheap people think short-term; conscious spenders think long-term.
2010 study found that "emotional well-being" peaks at $75k, but "life satisfaction" has no plateau. There's data that the more you earn, the more satisfied you are with life. People who spend to buy themselves time report greater life satisfaction.
À La Carte Method
1. Calculate what you spent over last month on discretionary subscriptions.
2. Cancel those subscriptions, and buy what you need à la carte. This forces you to be conscious about spending.
3. In 1 month, see how much you spent on those items.
4. Try to reduce spending.
Conscious Spending Plan recommended percentages
• Fixed costs: 50-60% of take-home pay
• Investments: 10%
• Savings goals: 5-10%
• Guilt-free spending: 20-35%
When calculating fixed costs, add 15% for unexpected expenses. Reduce that number over time, as you get more accurate.
Conscious Spending Plan is designed for young people who spend a lot on going out, but have lower housing costs than older people.
60 Percent Solution (Richard Jenkins, MSN Money)
• Basic expenses (food, bills, taxes, etc.): 60% of gross income
• Retirement: 10%
• Long-term savings: 10%
• Short-term savings: 10%
• Fun money: 10%
Each month, focus on 2-3 Big Wins that will make large change. They're expenses you cringe at, and say, "I probably spend too much on X."
Envelope system can help with conscious spending. Envelopes can be literal or figurative (categories in a system). You can transfer money from one envelope to another, but not increase total spending for month.
When you get unexpected income, use 50% for fun, as a motivation to do things that could result in more unexpected income. Save or invest the other 50%.
Save While Sleeping
Save 3-6 mos of expenses in emergency fund. As you get older, get to 6-12 mos.
If self-employed, get Solo 401(k) or SEP IRA.
The Myth of Financial Expertise
Most people don't need a financial advisor, but you may if you have complex financial situations (e.g., inherited or accumulated over $1 million; complex transactions involving kids, retirement, taxes), or are truly too busy to handle your own finances. Find a fee-only advisor who's a fiduciary at napfa.org.
1% fee can reduce returns by 28%. 2% fee can reduce returns by 63%. You should be paying 0.1% - 0.3%.
If considering actively managed fund, look at after-tax, after-fee returns for last 10, 15, 20 yrs.
Actively managed funds must outperform passive funds by at least 1-2% to compensate for high expense ratios.
1993-1998, less than half of actively managed funds beat market. 1998-2003, only 8% did. Only 2% of all large-cap funds beat market in both time periods.
Returns over 90 yrs
• Stocks: 11.5%
• Bonds: 5.2%
• Cash: 3.4%
Investing Isn't Only for Rich People
Add bonds to portfolio when in your 30s.
Asset allocation by age (based on Vanguard target date funds)
35: 90% stocks, 10% bonds
45: 90% stocks, 10% bonds
55: 69% stocks, 31% bonds
55: 53% stocks, 47% bonds
Use target-date fund. If you want more control, use index funds.
David Swenson's Yale Endowment portfolio:
• 30% US stocks
• 15% developed international stocks
• 5% emerging market stocks
• 20% REITs
• 15% government bonds
• 15% TIPS
Recommended institutions for index funds: Vanguard, Schwab, T. Rowe Price
Create a portfolio of 3-7 index funds that includes US stocks, international stocks, REITS, maybe small amount of Treasury bonds.
Choosing index funds
• Low expense ratio (~0.2%)
• Fits asset allocation (start with David Swenson's portfolio above)
• Good returns over last 10-15 yrs
Sample portfolio (Vanguard funds)
• 30% Total Market (VTSMX)
• 20% Total International (VGTSX)
• 20% REIT (VGSIX)
• 5% Short-Term Treasury (VSBSX)
• 5% Intermediate-Term Treasury (GSIGX)
• 5% Long-Term Treasury (VLGSX)
• 15% Short-Term Inflation-Protected Securities (VTAPX)
Lump-sum investing beats dollar-cost averaging 2/3 of time.
If you want to have fun investing (including cryptocurrency), allocate no more than 10% of money you can afford to lose, after setting up rest of portfolio.
How to Maintain and Grow Your System
Rebalance annually by investing more in underperforming assets. Alternatively, you can sell outperforming assets and reallocate into underperforming assets, but this can involve fees and paperwork.
Hold tax-inefficient (income-generating) assets like bonds in tax-advantaged accounts.
Hold tax-efficient assets like index funds in taxable accounts.
Before saving for kids' education, get out of debt and invest for retirement. Then, use 529.
A Rich Life
Decide how quickly to pay off debt based on its interest rate compared to investment returns. Consider that investing benefits from compound interest, and retirement accounts are tax-advantaged. If debt has low interest rate, pay off as slowly as possible. However, if debt keeps you awake at night, pay off as quickly as possible. An alternative is 50% toward debt, 50% invested.
Telling spouse not to spend on something will cause resentment. To avoid that, talk about your goals and how much you need to save to reach them. Next time you have an argument about spending, put focus on that plan, not on spouse's spending.
Most people don't need a prenup. It could be worthwhile if one person has a disproportionate amount of assets or liabilities, or owns a business, or has an inheritance.
Buying & owning car
1. Set budget
2. Choose reliable car
3. Maintain it
4. Drive it as long as possible (10+ yrs)
Leasing is usually worse than buying, unless you always want newest car and are willing to pay for it, or are business owner who leases for tax benefits.
When car shopping, if you don't negotiate well, bring someone who does.
Dealers are more willing to negotiate at year end.
fightingchance.com tells how much dealers pay for cars.
Contact multiple dealers and tell them what car you want, that you want to buy within 2 weeks, and will choose lowest price.
Don't buy a house until you have 20% down payment and enough to cover monthly expenses, including mortgage, property taxes, insurance, maintenance. These expenses should be less than 30% of your gross monthly income.
Don't buy a house unless you'er willing to live in it for 10+ yrs, because of high costs of real estate transaction fees, taxes, moving.
Your primary residence is a poor investment. If house is your largest investment, you may not be adequately diversified. Real estate offers poor returns for individual investors, when considering maintenance and property taxes (0.6%/yr 1915-2015). Net house prices haven't increased when you factor in inflation, taxes, homeowner fees.
Get a 30-yr fixed-rate mortgage because it's more flexible than 15-yr. It's almost always better to invest than to pay off mortgage early.
Look for benefits for first-time home buyers from state and local governments, credit unions, alumni associations, teachers' associations, other associations, and Costco.
Bonus resources
The book is written in the form of a 6-week action plan. Each chapter describes the tasks and reasoning behind them, and ends with a checklist of steps to take. Here are the weeks:
1. Set up credit cards, pay off debt, master credit history and credit rewards
2. Set up bank accounts
3. Open 401(k) and investment account
4. Figure out what you're spending, make spending plan
5. Automate transfers between accounts
6. Invest in stock market
Sethi gives advice on “automatically enabling yourself to save, invest, and spend - enjoying it, not feeling guilty … because you’re spending only what you have.” His main point: automate your finances so you effortlessly save and invest, leaving you money to spend on things you love without feeling guilty. Automatic saving and investing helps overcome psychological barriers and laziness.
In addition to his emphasis on automation, I agreed with Sethi’s recommendation for long-term, passive, buy-and-hold investing instead of speculative, market-timing investing. I also liked Sethi’s 85 Percent Solution, which states that it's better to act and get it 85% right than to do 0%; sometimes good enough is good enough, and it’s always better than doing nothing.
Another message is "spend extravagantly on the things you love and cut costs mercilessly on the things you don't." That's valuable because everyone defines being "rich" differently, and it's not all about money. Money is just the tool we use to acquire the material possessions and experiences we want. That's the difference between being cheap and being frugal; being cheap is trying to cut spending on everything, and being frugal is cutting costs on the things you don't care about so that you can splurge on the things you do.
I liked the concept of making a Conscious Spending Plan, which lets you spend a certain percentage of your money on whatever you want, without feeling guilty, since you’re paying yourself and your bills first.
I don't like that Sethi waits until the last chapter to mention donating, and he says to do it after meeting other financial goals. I wish he would've mentioned it earlier, and advocated giving throughout one's life.
Notes
Would You Rather Be Sexy or Rich?
Focus on the big wins: the 5-10 things that give disproportionate results (automate, saving and investing, find job you love, negotiate salary).
There's a limit to how much you can cut, but no limit to how much you can earn.
Optimize Your Credit Cards
If you're booking travel or dining out, use a travel card (Sethi likes Chase Sapphire Reserve). For everything else, use a cash back card (Sethi likes Alliant).
For business, Sethi uses a Capital One cash back card. For extra benefits, he uses an Amex Platinum.
A month before a card's annual fee hits, ask card company to waive it.
When you want a fee removed, don't ask, "Can you remove this?" Say, "I'd like to have this removed." If they resist, say, "I've been a customer for X years, and I'd hate for this one fee to drive me away from your service."
Sethi no longer recommends credit unions because they don't deliver solutions people care about.
Beat the Banks
Recommended banks
• Checking: Schwab Bank Investor Checking with Schwab One Brokerage Account, and/or local bank if you need to deposit cash Latest recommendations
• Savings: Capital One 360 Savings, All Online Savings, Marcus by Goldman Sachs, American Express Personal Savings Latest recommendations
Sethi recommends avoiding Bank of America and Wells Fargo.
Leave 1.5 mos living expenses in checking account, and put rest in savings.
Get Ready to Invest
People are afraid of possibly losing money in stocks, when they should fear certainly running out of money if they don't invest.
Ladder of Personal Finance
1. Invest enough in 401(k) to get company match (if there's no match, skip to Rung 4)
2. Pay off debt (other than student loans)
3. Invest as much as possible in Roth IRA
4. If you have money left, invest as much as possible into 401(k)
5. If you have money left, invest as much as possible in non-retirement (taxable) account, pay extra toward mortgage, invest in yourself (start company, get degree, etc.)
Even though you could make more money by investing than by paying off debt, pay off debt (besides student loans) to remove barriers to becoming rich.
You can withdraw principal from Roth IRA penalty-free, and there are exceptions for home down payments, education, and emergencies, if account has been open over 5 yrs.
Save, don't invest, money needed in under 5 yrs.
Recommended discount brokerages: Vanguard (Sethi's choice), Schwab, Fidelity
Sethi says robo-advisors are good options, but not the best, because they're not worth the costs and use marketing gimmicks.
Conscious Spending
Cheap people care about costs; conscious spenders care about value. Cheap people try to get lowest price on everything; conscious spenders try to get lowest price on most things, but spend extravagantly on things they care about. Cheap people's cheapness affects others; conscious spenders' frugality affects only them. Cheap people think short-term; conscious spenders think long-term.
2010 study found that "emotional well-being" peaks at $75k, but "life satisfaction" has no plateau. There's data that the more you earn, the more satisfied you are with life. People who spend to buy themselves time report greater life satisfaction.
À La Carte Method
1. Calculate what you spent over last month on discretionary subscriptions.
2. Cancel those subscriptions, and buy what you need à la carte. This forces you to be conscious about spending.
3. In 1 month, see how much you spent on those items.
4. Try to reduce spending.
Conscious Spending Plan recommended percentages
• Fixed costs: 50-60% of take-home pay
• Investments: 10%
• Savings goals: 5-10%
• Guilt-free spending: 20-35%
When calculating fixed costs, add 15% for unexpected expenses. Reduce that number over time, as you get more accurate.
Conscious Spending Plan is designed for young people who spend a lot on going out, but have lower housing costs than older people.
60 Percent Solution (Richard Jenkins, MSN Money)
• Basic expenses (food, bills, taxes, etc.): 60% of gross income
• Retirement: 10%
• Long-term savings: 10%
• Short-term savings: 10%
• Fun money: 10%
Each month, focus on 2-3 Big Wins that will make large change. They're expenses you cringe at, and say, "I probably spend too much on X."
Envelope system can help with conscious spending. Envelopes can be literal or figurative (categories in a system). You can transfer money from one envelope to another, but not increase total spending for month.
When you get unexpected income, use 50% for fun, as a motivation to do things that could result in more unexpected income. Save or invest the other 50%.
Save While Sleeping
Save 3-6 mos of expenses in emergency fund. As you get older, get to 6-12 mos.
If self-employed, get Solo 401(k) or SEP IRA.
The Myth of Financial Expertise
Most people don't need a financial advisor, but you may if you have complex financial situations (e.g., inherited or accumulated over $1 million; complex transactions involving kids, retirement, taxes), or are truly too busy to handle your own finances. Find a fee-only advisor who's a fiduciary at napfa.org.
1% fee can reduce returns by 28%. 2% fee can reduce returns by 63%. You should be paying 0.1% - 0.3%.
If considering actively managed fund, look at after-tax, after-fee returns for last 10, 15, 20 yrs.
Actively managed funds must outperform passive funds by at least 1-2% to compensate for high expense ratios.
1993-1998, less than half of actively managed funds beat market. 1998-2003, only 8% did. Only 2% of all large-cap funds beat market in both time periods.
Returns over 90 yrs
• Stocks: 11.5%
• Bonds: 5.2%
• Cash: 3.4%
Investing Isn't Only for Rich People
Add bonds to portfolio when in your 30s.
Asset allocation by age (based on Vanguard target date funds)
35: 90% stocks, 10% bonds
45: 90% stocks, 10% bonds
55: 69% stocks, 31% bonds
55: 53% stocks, 47% bonds
Use target-date fund. If you want more control, use index funds.
David Swenson's Yale Endowment portfolio:
• 30% US stocks
• 15% developed international stocks
• 5% emerging market stocks
• 20% REITs
• 15% government bonds
• 15% TIPS
Recommended institutions for index funds: Vanguard, Schwab, T. Rowe Price
Create a portfolio of 3-7 index funds that includes US stocks, international stocks, REITS, maybe small amount of Treasury bonds.
Choosing index funds
• Low expense ratio (~0.2%)
• Fits asset allocation (start with David Swenson's portfolio above)
• Good returns over last 10-15 yrs
Sample portfolio (Vanguard funds)
• 30% Total Market (VTSMX)
• 20% Total International (VGTSX)
• 20% REIT (VGSIX)
• 5% Short-Term Treasury (VSBSX)
• 5% Intermediate-Term Treasury (GSIGX)
• 5% Long-Term Treasury (VLGSX)
• 15% Short-Term Inflation-Protected Securities (VTAPX)
Lump-sum investing beats dollar-cost averaging 2/3 of time.
If you want to have fun investing (including cryptocurrency), allocate no more than 10% of money you can afford to lose, after setting up rest of portfolio.
How to Maintain and Grow Your System
Rebalance annually by investing more in underperforming assets. Alternatively, you can sell outperforming assets and reallocate into underperforming assets, but this can involve fees and paperwork.
Hold tax-inefficient (income-generating) assets like bonds in tax-advantaged accounts.
Hold tax-efficient assets like index funds in taxable accounts.
Before saving for kids' education, get out of debt and invest for retirement. Then, use 529.
A Rich Life
Decide how quickly to pay off debt based on its interest rate compared to investment returns. Consider that investing benefits from compound interest, and retirement accounts are tax-advantaged. If debt has low interest rate, pay off as slowly as possible. However, if debt keeps you awake at night, pay off as quickly as possible. An alternative is 50% toward debt, 50% invested.
Telling spouse not to spend on something will cause resentment. To avoid that, talk about your goals and how much you need to save to reach them. Next time you have an argument about spending, put focus on that plan, not on spouse's spending.
Most people don't need a prenup. It could be worthwhile if one person has a disproportionate amount of assets or liabilities, or owns a business, or has an inheritance.
Buying & owning car
1. Set budget
2. Choose reliable car
3. Maintain it
4. Drive it as long as possible (10+ yrs)
Leasing is usually worse than buying, unless you always want newest car and are willing to pay for it, or are business owner who leases for tax benefits.
When car shopping, if you don't negotiate well, bring someone who does.
Dealers are more willing to negotiate at year end.
fightingchance.com tells how much dealers pay for cars.
Contact multiple dealers and tell them what car you want, that you want to buy within 2 weeks, and will choose lowest price.
Don't buy a house until you have 20% down payment and enough to cover monthly expenses, including mortgage, property taxes, insurance, maintenance. These expenses should be less than 30% of your gross monthly income.
Don't buy a house unless you'er willing to live in it for 10+ yrs, because of high costs of real estate transaction fees, taxes, moving.
Your primary residence is a poor investment. If house is your largest investment, you may not be adequately diversified. Real estate offers poor returns for individual investors, when considering maintenance and property taxes (0.6%/yr 1915-2015). Net house prices haven't increased when you factor in inflation, taxes, homeowner fees.
Get a 30-yr fixed-rate mortgage because it's more flexible than 15-yr. It's almost always better to invest than to pay off mortgage early.
Look for benefits for first-time home buyers from state and local governments, credit unions, alumni associations, teachers' associations, other associations, and Costco.
Bonus resources
March 13, 2010
I tried summarizing the main things to learn at:
http://docs.google.com/View?id=dfp2hx...
I've pasted the most important bits below, but for a lot more (hopefully useful) info, check out the linked doc.
The Overall Gist: This book is about how to manage your money, particularly for young people (20's). It's about the 85% solution: most young people don't manage their money because they believe they have to be experts, but what actually matters is getting started NOW, even it's only 85% right.
6-Week Program
Week 1: Optimize your credit cards and use them responsibly to build good credit.
Week 2: Set up no-fee, high-interest bank accounts.
Week 3: Open a 401(k) and Roth IRA.
Week 4: Figure out how much you're spending and where, then create a Conscious Spending Plan and optimize your spending to make your money go where you want it to go.
Week 5: Automate your new financial infrastructure so bills are automatically paid and money is automatically saved and invested.
Week 6: Learn how to get the most out of the market with very little work. It's not about picking stocks, it's about investing in index funds: either a lifecycle fund or a set of index funds that fits your ideal asset allocation.
The Ladder of Personal Finance: A summary of prioritized steps on how to invest
- If your employer offers a 401(k) match, invest to take full advantage of it (but not more). It's free money.
- Pay off your credit card and any other debt. Pay off the debt with the highest APR first. Note that for low-interest debt, instead of paying it off beyond the minimum, you may want to invest instead (i.e. the following ladder rungs)
- Open up a Roth IRA and contribute as much as possible (if your income is $101,000 or less in 2009, this is $5000).
- Continue contributing to your 401(k). The current limit is $15,500.
- Open a regular nonretirement account and put as much as possible there. Also consider investing in yourself.
http://docs.google.com/View?id=dfp2hx...
I've pasted the most important bits below, but for a lot more (hopefully useful) info, check out the linked doc.
The Overall Gist: This book is about how to manage your money, particularly for young people (20's). It's about the 85% solution: most young people don't manage their money because they believe they have to be experts, but what actually matters is getting started NOW, even it's only 85% right.
6-Week Program
Week 1: Optimize your credit cards and use them responsibly to build good credit.
Week 2: Set up no-fee, high-interest bank accounts.
Week 3: Open a 401(k) and Roth IRA.
Week 4: Figure out how much you're spending and where, then create a Conscious Spending Plan and optimize your spending to make your money go where you want it to go.
Week 5: Automate your new financial infrastructure so bills are automatically paid and money is automatically saved and invested.
Week 6: Learn how to get the most out of the market with very little work. It's not about picking stocks, it's about investing in index funds: either a lifecycle fund or a set of index funds that fits your ideal asset allocation.
The Ladder of Personal Finance: A summary of prioritized steps on how to invest
- If your employer offers a 401(k) match, invest to take full advantage of it (but not more). It's free money.
- Pay off your credit card and any other debt. Pay off the debt with the highest APR first. Note that for low-interest debt, instead of paying it off beyond the minimum, you may want to invest instead (i.e. the following ladder rungs)
- Open up a Roth IRA and contribute as much as possible (if your income is $101,000 or less in 2009, this is $5000).
- Continue contributing to your 401(k). The current limit is $15,500.
- Open a regular nonretirement account and put as much as possible there. Also consider investing in yourself.
June 3, 2010
While I don’t agree with everything he said, I do agree with some of the things he talks about. I personally found the investment chapters worth reading as I didn’t know very much and he lined out what my options were and explained what they were in a clear and fun way. The entire thing about using a credit card for everything to get points and other “benefits” doesn’t quite work for me, but it may for him. I don’t know anybody who has ever gotten rich because they received points from credit card purchases.
I would read this book along with Dave Ramsey’s The Total Money Makeover to compare the two. With both in hand, you should get started off on the right path.
A few notes while I read this book:
- Ramit talks specifically to people who think they need never to borrow money. His response? “Maybe you don’t today, but in three or four years, you might need to start thinking about a wedding or a house. What about cars? Vacations? Those ridiculous baby cribs that cost $7,000? And it goes on and on. Please don’t scoff or dismiss what you just read. One of the key differences between rich people and everyone else is that rich people plan before they need to plan.” My response? Really? You need to borrow money to go on vacation? To get married? To buy a baby crib? A car even? Maybe a house, but none of the others. Ramit did get one thing right, rich people DO plan before they need to plan by saving cash, by planning out the purchase of a car by saving a certain amount monthly, by saying they want to go to a cruise next year and it costing $1200, so they save $100/month to do it. That baby crib? you know at least 8-9 months in advance you will be needing one, and I don’t know ANYBODY who spends $7,000 on a baby crib, especially those who DON’T HAVE THE MONEY. Wow… Sorry about that. I had to go on a rant. Ramit argues that credit is king, but it doesn’t do anything for you when you’re going into debt to go on vacation and paying interest back at 7% (because of your good credit) as opposed to 14%. Why go in the first place?
- Ramit enlightened me to something I really didn’t know how to do before. I knew it was possible, but didn’t know it was doable. To opt out of all your pre-approved credit card offers you receive in the mail, go here: https://www.optoutprescreen.com/ and put in your information. Right when I read this, I did it immediately.
- One thing I absolutely love about this book is to simply get started. Just do SOMETHING rather than be paralyzed by not knowing what to do and how to do it. You’ll learn over time. Start investing TODAY. Start paying off your debt with whatever you’ve got TODAY.
- Conscious spending. This is exactly what my budget has become. Yes, I still know exactly what I’m spending money on each month so that we can plan for the future and have those needs taken care of (tuition, books, summer trips, etc.). Budgeting/conscious spending is simply to stop spending money on something you don’t care too much about and spending LOTS of money on the things you love. If you love eating out, there’s no reason not to spend money on that as long as you don’t go into debt for it and have already saved and invested!
- Investing chapters lead to sound advice for those who want to invest, but don’t have the time to look at all of the many different mutual funds, index funds and stocks. It helped me understand the difference between mutual funds, index funds, and LIFECYCLE or TARGET RETIREMENT accounts. Good advice for basics.
I would read this book along with Dave Ramsey’s The Total Money Makeover to compare the two. With both in hand, you should get started off on the right path.
A few notes while I read this book:
- Ramit talks specifically to people who think they need never to borrow money. His response? “Maybe you don’t today, but in three or four years, you might need to start thinking about a wedding or a house. What about cars? Vacations? Those ridiculous baby cribs that cost $7,000? And it goes on and on. Please don’t scoff or dismiss what you just read. One of the key differences between rich people and everyone else is that rich people plan before they need to plan.” My response? Really? You need to borrow money to go on vacation? To get married? To buy a baby crib? A car even? Maybe a house, but none of the others. Ramit did get one thing right, rich people DO plan before they need to plan by saving cash, by planning out the purchase of a car by saving a certain amount monthly, by saying they want to go to a cruise next year and it costing $1200, so they save $100/month to do it. That baby crib? you know at least 8-9 months in advance you will be needing one, and I don’t know ANYBODY who spends $7,000 on a baby crib, especially those who DON’T HAVE THE MONEY. Wow… Sorry about that. I had to go on a rant. Ramit argues that credit is king, but it doesn’t do anything for you when you’re going into debt to go on vacation and paying interest back at 7% (because of your good credit) as opposed to 14%. Why go in the first place?
- Ramit enlightened me to something I really didn’t know how to do before. I knew it was possible, but didn’t know it was doable. To opt out of all your pre-approved credit card offers you receive in the mail, go here: https://www.optoutprescreen.com/ and put in your information. Right when I read this, I did it immediately.
- One thing I absolutely love about this book is to simply get started. Just do SOMETHING rather than be paralyzed by not knowing what to do and how to do it. You’ll learn over time. Start investing TODAY. Start paying off your debt with whatever you’ve got TODAY.
- Conscious spending. This is exactly what my budget has become. Yes, I still know exactly what I’m spending money on each month so that we can plan for the future and have those needs taken care of (tuition, books, summer trips, etc.). Budgeting/conscious spending is simply to stop spending money on something you don’t care too much about and spending LOTS of money on the things you love. If you love eating out, there’s no reason not to spend money on that as long as you don’t go into debt for it and have already saved and invested!
- Investing chapters lead to sound advice for those who want to invest, but don’t have the time to look at all of the many different mutual funds, index funds and stocks. It helped me understand the difference between mutual funds, index funds, and LIFECYCLE or TARGET RETIREMENT accounts. Good advice for basics.
February 6, 2011
The financial advice is mostly sound, but the tone and attitude is pretty annoying: it's aimed toward adults with the emotional maturity of 13-year-olds and features lots of unfunny jokes about hot blondes. Do. Not. Want.
July 27, 2015
I've never wanted to give a book 2 stars so badly. As a warm blooded, heterosexual male - the obnoxiousness and irrelevance of Ramit's frequent fratboy asides is really grating. I'm sure he has some kind of "gotta break some eggs to make an omelette" rationale, but buyer beware. You're going to read some shit that sounds like Tucker Max, minus the funny.
THAT SAID - I gave the book 4 stars.
Why? If you don't have your finances in order, Ramit gives you a clear, actionable plan on what to do, what order to do it in, and which vendors to use. This book is supremely actionable, and the only reason you wouldn't get your finances in order after reading it is because you simply don't give a shit, not because you don't know what to do.
The investment portion of this book is VERY 101 (maybe 100). If you're at the point where your credit, expenses, etc., are in order and you want to think more about making your money work for you, I'd recommend Tony Robbins "Money: Master the Game." It contains ~10 interviews with the leading minds in finance and investing, giving much better coverage of a complex subject and makes cases for various portfolio strategies.
All of this said, I did organize my finances according to Ramit's advice, so I have to thank him/give him credit for that. It feels like a major adult accomplishment and weight off my shoulders.
I wish someone would write a better written version of the same information so I can buy lots of copies and donate them to high schools. This is simultaneously required reading and utter dog shit, irony be damned.
THAT SAID - I gave the book 4 stars.
Why? If you don't have your finances in order, Ramit gives you a clear, actionable plan on what to do, what order to do it in, and which vendors to use. This book is supremely actionable, and the only reason you wouldn't get your finances in order after reading it is because you simply don't give a shit, not because you don't know what to do.
The investment portion of this book is VERY 101 (maybe 100). If you're at the point where your credit, expenses, etc., are in order and you want to think more about making your money work for you, I'd recommend Tony Robbins "Money: Master the Game." It contains ~10 interviews with the leading minds in finance and investing, giving much better coverage of a complex subject and makes cases for various portfolio strategies.
All of this said, I did organize my finances according to Ramit's advice, so I have to thank him/give him credit for that. It feels like a major adult accomplishment and weight off my shoulders.
I wish someone would write a better written version of the same information so I can buy lots of copies and donate them to high schools. This is simultaneously required reading and utter dog shit, irony be damned.
March 11, 2018
It's not that his advice is bad. His tone is just infuriating...
January 22, 2022
If you can overlook Sethi's douchy tone and hot-blonde jokes, there's some pretty solid advice in there. A better written version of the same book would have bagged 5 stars easily.
Still, worth a read.
***
35% in and this fratboy has only managed to make me mad 😶
***
Well Mr.Sethi, let's see if you're gonna make me rich 🤑
Still, worth a read.
***
35% in and this fratboy has only managed to make me mad 😶
***
Well Mr.Sethi, let's see if you're gonna make me rich 🤑
March 21, 2024
I'm going to update this review, year-by-year, with how much this book has changed my life, starting in 2017 as a college student with no money.
Year One, 2017: I'm a junior in college studying "Integrated Language Arts," which means I'll probably end up teaching, technical writing, or doing some sort of web design / SEO work; in any case except teaching, my income will be a little bit above average. Right now, though, my income is nothing to brag about. I work in a factory making $12/hour and I do some freelance writing and SEO work on the side.
In a way, you could say I'm living out the first couple chapters, "Optimize Your Credit Cards" and "Beat the Banks." I'm focusing on building credit and staying out of debt. I got accepted for a Discover Card about a year ago with 2% cashback on groceries and gas; I haven't taken out any loans to pay for college, and I plan to keep it that way: as of today - October 10th, 2017 - about 66% of public college students graduate with a debt load of $25k, which means staying out of debt will put me well above average.
Bottom Line of Year One: Net worth of about ~$500 and a credit score of 695.
Goal for Year Two: Net worth of at least $2.5k, ~$1k in a 401k, and a credit score of 730. I can't say I'll update this at the exact same time every year, but I'll come close. If I hit my goals, I'll come back to revise them.
Year Two Update, 2018 $3k in a Roth IRA and a ~720 credit score.
I've also traveled to some neat places, which I think fits in perfectly with the idea of "Living a Rich Life."
Vanguard
FICO
Bottom Line of Year Two: Goal accomplished with ~$3k in a Vanguard Roth IRA and a ~720 FICO.
I traveled to San Clemente, Santa Monica, and Los Angeles in Southern California; Hilton Head in South Carolina; and Savannah, Georgia. I've discovered how much I like traveling, and I've made it one of my priorities.
Updated Goals for Year Three: Save a minimum of ~$5k for a month-long backpacking trip across Europe, put as many purchases as possible on my Delta SkyMiles card so I can get a discounted flight, continue to max out my IRA, and save ~$5k for a down payment on a duplex so, as soon as I land a full-time job after graduating college, I can finally move out of my parents' house.
Years Three and Four Update, 2019 & 2020: I've done quite a bit of traveling pre-pandemic since my freelance writing business was doing well -- maybe blowing a little bit more money than I should have. I did that backpacking trip: I picked up some odd jobs in Ireland working on a farm and painting, and that covered some of my living expenses before moving on to Switzerland and Italy, and then I went all the way to Costa Rica and Peru (before doing a road trip across Europe again).
Do I regret it? Not at all. If you wanted to travel the way that I did today, in 2020, you literally wouldn't be able to. And all of that traveling didn't cost me anywhere near as much as you'd expect. I was very, very frugal about it.
Unfortunately, as soon as the pandemic hit, my income took a nosedive. I'm climbing my way back up, but I'm back at my parent's house for now. This is where I stand financially, from my Personal Capital:
I drive a 2010 Honda Civic that gets 36MPG, and I bought it for $6k cash. I probably put another $1.5k in it or so, including paying out-of-state taxes, new battery, new rim caps, and so on, but I don't think anything I did increased the value.
I'm studying now to be a real estate appraiser. After experiencing first-hand how unstable my freelance income was, I wanted something different. I've already done some real estate copywriting, so this seemed like a good place to start.
Bottom Line of Years Three and Four: $17k net worth. $6k car. $5k in Roth IRA. $6k in savings (saving to buy my own place since I know I'll be in NE Ohio for 10+ years).
Years Five and Six Update, 2021 & 2022: My net worth has gone nowhere. I’m still at $17k, but I see it as massive progress because I’ve significantly increased my earning potential. I’m now a Certified Residential Appraiser and I should finally be making $50-$90k this coming year. I still drive that same Honda Civic and it gets me 35-40MPG. I’m going to drive it until my girlfriend forces me to get rid of it.
I’ve also traveled a bunch with this beautiful Canadian girl I met in Costa Rica. If that’s not a “Rich Life,” I don’t know what is.
Bottom Lines of Years Five and Six: Net worth has stagnated ($17k) because of education costs and stock depreciation. Still contributing to Roth IRA as much as possible. Should be in a much better position this time next year. For future reference, I’m writing this on May 17th, 2022.
Goals for next couple years: Earn $60k+ in calendar year, buy a condo and maybe rent out a room of it.
Year Seven Update, 2023
It's now January 12th, 2023. I'm really not doing great with the whole "I'll update this at around the same time every year" thing so I'm just gonna do it in January from here on out... Hopefully...
My net worth is now ~$31k and I make a decent salary, around $70k before bonuses. That beautiful Canadian girl I met in Costa Rica is now my beautiful fiance.
Life's okay. It could be better. I feel like I'm underpaid but it is what it is. I'm hoping to buy a house or duplex soon, so that'll maybe help my net worth and income options.
I still drive that same Honda Civic and I love it.
Bottom Line of Year Seven: $31k net worth with a good salary.
Goal for next year: Buy a house.
Year Eight Update, 2024
It's been an eventful year. I'm writing this now on January, 9th, 2024, having remembered that this review exists thanks to a commenter.
My beautiful fiancee is now my beautiful wife. She's fantastic. She’s everything I could’ve ever hoped for.
I bought a house. It's a ~1,600 square foot, 3 bed, 1.5 bath brick Colonial in Parma, Ohio (near the Cleveland area). It was listed at $215k and I bought it for $198k after concessions. It needed some work, for sure, but I didn't realize just how much work.
I strongly recommend that anyone who's thinking about buying a house reread the section about houses not being good investments. My net worth would be much higher this year if it wasn't for an unexpected $15k boiler expense. I got a home inspection from someone who seemed reliable. I crossed my t's and dotted my i's. As a real estate appraiser, I look at houses every single day and analyze local markets. I still ended up making a blunder.
It's hard. Life changes. Now I'm not sure if I'll stay in this area for long, so it's entirely possible that I lose money on it when I go to sell.
When in doubt, rent.
Regardless, I've made some major gains in terms of net worth, courtesy of saving aggressively and combining finances.
Our net worth now sits at around ~$60k if you don't count her Canadian retirement accounts. They aren't in the graph because that's just our US assets. If you count her Canadian assets, our combined net worth is around ~$100k USD, but it fluctuates.
I look back at when I first started writing this, when I had $500 to my name and worked for $12/hr in a factory, and I can't believe it.
I still drive the same Honda Civic by the way, although it looks pretty ugly at this point and I've been strongly considering an upgrade.
My credit score has not changed, but I don't really think about it anymore. I guess one day when I'm 40 and haven't missed a payment since I opened my first credit card, it might improve.
Bottom Line of Year Eight: ~$100k net worth.
Between the two of us, our income is about ~$115k.
Goal for Next Year: Make $90k or more. Max out both of our Roth IRAs.
Year One, 2017: I'm a junior in college studying "Integrated Language Arts," which means I'll probably end up teaching, technical writing, or doing some sort of web design / SEO work; in any case except teaching, my income will be a little bit above average. Right now, though, my income is nothing to brag about. I work in a factory making $12/hour and I do some freelance writing and SEO work on the side.
In a way, you could say I'm living out the first couple chapters, "Optimize Your Credit Cards" and "Beat the Banks." I'm focusing on building credit and staying out of debt. I got accepted for a Discover Card about a year ago with 2% cashback on groceries and gas; I haven't taken out any loans to pay for college, and I plan to keep it that way: as of today - October 10th, 2017 - about 66% of public college students graduate with a debt load of $25k, which means staying out of debt will put me well above average.
Bottom Line of Year One: Net worth of about ~$500 and a credit score of 695.
Goal for Year Two: Net worth of at least $2.5k, ~$1k in a 401k, and a credit score of 730. I can't say I'll update this at the exact same time every year, but I'll come close. If I hit my goals, I'll come back to revise them.
Year Two Update, 2018 $3k in a Roth IRA and a ~720 credit score.
I've also traveled to some neat places, which I think fits in perfectly with the idea of "Living a Rich Life."
Vanguard
FICO
Bottom Line of Year Two: Goal accomplished with ~$3k in a Vanguard Roth IRA and a ~720 FICO.
I traveled to San Clemente, Santa Monica, and Los Angeles in Southern California; Hilton Head in South Carolina; and Savannah, Georgia. I've discovered how much I like traveling, and I've made it one of my priorities.
Updated Goals for Year Three: Save a minimum of ~$5k for a month-long backpacking trip across Europe, put as many purchases as possible on my Delta SkyMiles card so I can get a discounted flight, continue to max out my IRA, and save ~$5k for a down payment on a duplex so, as soon as I land a full-time job after graduating college, I can finally move out of my parents' house.
Years Three and Four Update, 2019 & 2020: I've done quite a bit of traveling pre-pandemic since my freelance writing business was doing well -- maybe blowing a little bit more money than I should have. I did that backpacking trip: I picked up some odd jobs in Ireland working on a farm and painting, and that covered some of my living expenses before moving on to Switzerland and Italy, and then I went all the way to Costa Rica and Peru (before doing a road trip across Europe again).
Do I regret it? Not at all. If you wanted to travel the way that I did today, in 2020, you literally wouldn't be able to. And all of that traveling didn't cost me anywhere near as much as you'd expect. I was very, very frugal about it.
Unfortunately, as soon as the pandemic hit, my income took a nosedive. I'm climbing my way back up, but I'm back at my parent's house for now. This is where I stand financially, from my Personal Capital:
I drive a 2010 Honda Civic that gets 36MPG, and I bought it for $6k cash. I probably put another $1.5k in it or so, including paying out-of-state taxes, new battery, new rim caps, and so on, but I don't think anything I did increased the value.
I'm studying now to be a real estate appraiser. After experiencing first-hand how unstable my freelance income was, I wanted something different. I've already done some real estate copywriting, so this seemed like a good place to start.
Bottom Line of Years Three and Four: $17k net worth. $6k car. $5k in Roth IRA. $6k in savings (saving to buy my own place since I know I'll be in NE Ohio for 10+ years).
Years Five and Six Update, 2021 & 2022: My net worth has gone nowhere. I’m still at $17k, but I see it as massive progress because I’ve significantly increased my earning potential. I’m now a Certified Residential Appraiser and I should finally be making $50-$90k this coming year. I still drive that same Honda Civic and it gets me 35-40MPG. I’m going to drive it until my girlfriend forces me to get rid of it.
I’ve also traveled a bunch with this beautiful Canadian girl I met in Costa Rica. If that’s not a “Rich Life,” I don’t know what is.
Bottom Lines of Years Five and Six: Net worth has stagnated ($17k) because of education costs and stock depreciation. Still contributing to Roth IRA as much as possible. Should be in a much better position this time next year. For future reference, I’m writing this on May 17th, 2022.
Goals for next couple years: Earn $60k+ in calendar year, buy a condo and maybe rent out a room of it.
Year Seven Update, 2023
It's now January 12th, 2023. I'm really not doing great with the whole "I'll update this at around the same time every year" thing so I'm just gonna do it in January from here on out... Hopefully...
My net worth is now ~$31k and I make a decent salary, around $70k before bonuses. That beautiful Canadian girl I met in Costa Rica is now my beautiful fiance.
Life's okay. It could be better. I feel like I'm underpaid but it is what it is. I'm hoping to buy a house or duplex soon, so that'll maybe help my net worth and income options.
I still drive that same Honda Civic and I love it.
Bottom Line of Year Seven: $31k net worth with a good salary.
Goal for next year: Buy a house.
Year Eight Update, 2024
It's been an eventful year. I'm writing this now on January, 9th, 2024, having remembered that this review exists thanks to a commenter.
My beautiful fiancee is now my beautiful wife. She's fantastic. She’s everything I could’ve ever hoped for.
I bought a house. It's a ~1,600 square foot, 3 bed, 1.5 bath brick Colonial in Parma, Ohio (near the Cleveland area). It was listed at $215k and I bought it for $198k after concessions. It needed some work, for sure, but I didn't realize just how much work.
I strongly recommend that anyone who's thinking about buying a house reread the section about houses not being good investments. My net worth would be much higher this year if it wasn't for an unexpected $15k boiler expense. I got a home inspection from someone who seemed reliable. I crossed my t's and dotted my i's. As a real estate appraiser, I look at houses every single day and analyze local markets. I still ended up making a blunder.
It's hard. Life changes. Now I'm not sure if I'll stay in this area for long, so it's entirely possible that I lose money on it when I go to sell.
When in doubt, rent.
Regardless, I've made some major gains in terms of net worth, courtesy of saving aggressively and combining finances.
Our net worth now sits at around ~$60k if you don't count her Canadian retirement accounts. They aren't in the graph because that's just our US assets. If you count her Canadian assets, our combined net worth is around ~$100k USD, but it fluctuates.
I look back at when I first started writing this, when I had $500 to my name and worked for $12/hr in a factory, and I can't believe it.
I still drive the same Honda Civic by the way, although it looks pretty ugly at this point and I've been strongly considering an upgrade.
My credit score has not changed, but I don't really think about it anymore. I guess one day when I'm 40 and haven't missed a payment since I opened my first credit card, it might improve.
Bottom Line of Year Eight: ~$100k net worth.
Between the two of us, our income is about ~$115k.
Goal for Next Year: Make $90k or more. Max out both of our Roth IRAs.
May 6, 2013
Don't let my star rating mislead you. You should read this book. The advice is very good and clear.
I just can't honestly say I loved it, because I found the author's examples of what it means to be rich (repeated references to being fed grapes, etc, by lovely younger women) to be off-putting. Also, the layout is terrible. The flow of chapters are continually interrupted by smaller stand-alone sections, which should have been better placed so you wouldn't have to choose between interrupting the paragraph you've begun or remembering to go back when you've finished reading it.
Once again, you should read this book. It's very straightforward and practical, and removes much of the mystery around saving and investing. I wish I had read it younger and put it into practice sooner.
I just can't honestly say I loved it, because I found the author's examples of what it means to be rich (repeated references to being fed grapes, etc, by lovely younger women) to be off-putting. Also, the layout is terrible. The flow of chapters are continually interrupted by smaller stand-alone sections, which should have been better placed so you wouldn't have to choose between interrupting the paragraph you've begun or remembering to go back when you've finished reading it.
Once again, you should read this book. It's very straightforward and practical, and removes much of the mystery around saving and investing. I wish I had read it younger and put it into practice sooner.
May 7, 2018
* Targeted Audience: Early 20s located in USA and it is 2011 not later (If you are already 24, skip it)
* Information Depth: Basic + Common Sense
* Format: Audiobook for me, with 3/10 rating for narration!
* Some side gender-comparative comments that you might not be pleased to hear!
* My Bookshelf: Wish-I-Skipped-It
Hope I saved you precious minutes of your time!
* Information Depth: Basic + Common Sense
* Format: Audiobook for me, with 3/10 rating for narration!
* Some side gender-comparative comments that you might not be pleased to hear!
* My Bookshelf: Wish-I-Skipped-It
Hope I saved you precious minutes of your time!
June 5, 2009
In one chapter, this book briefly describes a girl that spends $5,000/year on shoes. Since it's a book on being rich, I figured she *must* be rich in order to waste that much money on shoes. But no, her annual income is about half mine. She's able to do this because she decided that "$5,000/year on shoes" was her own personal definition of "rich" and she oriented her life around that decision.
That's all this book is: deciding for yourself what it means to be rich and acting on it. Everything's broken down into the simplest possible steps. Even if you're the laziest person on the planet, taking 1 action/day will put you on the path to a wealthy retirement in about 6 weeks.
There are many, many numbers, all used to illustrate the difference between not taking action, taking some action, and taking maximum action. Some of these differences are measured in hundreds of thousands of dollars. Each action required on your part rarely requires more than a few hours one evening. Once. And then you never have to worry about it again.
This book will pay for itself many, many times over in the first month after you read it, if not the first week. It's your money, no one else's, so why the hell haven't you read it yet?
That's all this book is: deciding for yourself what it means to be rich and acting on it. Everything's broken down into the simplest possible steps. Even if you're the laziest person on the planet, taking 1 action/day will put you on the path to a wealthy retirement in about 6 weeks.
There are many, many numbers, all used to illustrate the difference between not taking action, taking some action, and taking maximum action. Some of these differences are measured in hundreds of thousands of dollars. Each action required on your part rarely requires more than a few hours one evening. Once. And then you never have to worry about it again.
This book will pay for itself many, many times over in the first month after you read it, if not the first week. It's your money, no one else's, so why the hell haven't you read it yet?
March 26, 2012
Ramit has some good points in this book. I liked his no-BS approach and I found his points about automating finances worthwhile, if it didn't exactly give me new information. I found the section about investing to provide helpful information about index funds, which I had wondered about. He is right on the money about saving up for weddings/homes too, which somehow people just expect to pull massive amounts of money together for, on a whim. Excellent points, all.
That said, I really dislike this guy. His tone sounds like a petulant spoiled kid at times. He talks a lot about hot girls and going out to bars. Granted, I'm married, but I am in the demographic he lists for this book, and I found it hard to take serious advice from someone who literally says that he HATES people who make money mistakes. And who talks a lot about hot girls. The book just tries too hard to be hip, and there is surprisingly little in this book about student loans, considering it is aimed at 20 and 30 somethings.
Suze Orman's book for the Young, Fabulous & Broke gave me a lot more info without all the hot lady references.
That said, I really dislike this guy. His tone sounds like a petulant spoiled kid at times. He talks a lot about hot girls and going out to bars. Granted, I'm married, but I am in the demographic he lists for this book, and I found it hard to take serious advice from someone who literally says that he HATES people who make money mistakes. And who talks a lot about hot girls. The book just tries too hard to be hip, and there is surprisingly little in this book about student loans, considering it is aimed at 20 and 30 somethings.
Suze Orman's book for the Young, Fabulous & Broke gave me a lot more info without all the hot lady references.
March 9, 2018
I thought I'd get a couple new ''tid bits" of info in this book, but nope, same-old same-old. This is all common sense, people. Save & invest, don't buy a house you can't afford, and do your research.. Maybe I could relate more if ia were in my 20's and renting? In my opinion, if you want this elementary stuff, you're better off reading Suze Orman's books. Much more factual info, and much less random opinion.
January 14, 2021
I've read many fiance books and this one has the foundations of finance, but I find the layout of the information presented and tone prevents it from being any good. There's a ton of other books that will give you the information you need without being pompous and condescending. Additionally, both life and money have layers of complexity and this book would rather complain about them being in poverty being their fault than actually include resources and outreach that could help.
Listen, if you are picking up a finance book then they are already trying to improve. Stop kicking people down.
Don't let this book turn you off to finances, not everyone is like this. Pick up a few different books - try them for free at the library before you decide to buy.
Listen, if you are picking up a finance book then they are already trying to improve. Stop kicking people down.
Don't let this book turn you off to finances, not everyone is like this. Pick up a few different books - try them for free at the library before you decide to buy.
April 26, 2018
Overly simplistic. Annoying tone. Some of the advice is good, but it is better presented elsewhere. Skip this book.
August 13, 2020
I'm sure there's some good financial advice here, buried under the fat-phobic misogyny! No, thank you.
April 7, 2017
Deficient in style, form, prose, and depth (the nerdy dude-bro-esque humor falls flat and tends to sound either sexist or racist) but the dated content could still prove useful to young people who know next to nothing about getting their finances in working order. Perhaps the strongest aspect of this book is the actionability of the content--improving credit scores, setting up high-interest savings accounts, investing in 401K and ROTH IRAs, etc. Great primer for the late-teen or early 20-something.
April 10, 2017
If you can cringe through the misogyny and disdain for overweight people, there are actually some good pieces of financial advice for beginners.
May 14, 2015
It's hard to take what this guy says seriously after reading the Millionaire Fastlane and living a lifestyle congruent with that book. My suggestion would be to read that first and then pass on this one rather than wasting your time. Go out there and create some value instead of rolling in the slowlane like Ramit suggests! I will teach you to be rich? More like, I will get rich from selling you this book while you stay poor making marginal gains on shitty investments.
March 1, 2021
IDK. I mean.... It's FINE. I'm in the middle of the book right now but I had to take a break after he talks about how you should factor in "saving for your wedding, even if you're not engaged" and how if you're 26 you should be saving $2,500 a month for "your wedding" because, as he casually tells us, they cost $30,000 and that's just how much they cost and that's just what you're going to have to save every month for "your wedding". Even if you're not engaged.
Anyway it's just dawning on me that this book seems to be written for Young Professionals making at LEAST $60k a year at jobs that offer 401ks, because a good deal of this book is about 401ks and assuming you will be getting one or already have one. Some of us are unemployed, RAMIT. Some of us have been a barista all our lives and can't save $2,500 a month for "our wedding" and $19,000 a year for our 401k. Lolol.
And he says that 50% of our income should be for "fixed costs (rent, utilities, etc.") Meanwhile some of us are accustomed to allotting well over 50% of our income just towards rent. *loling intensifies*
I'm just here for the section on investing, which is apparently near the end of the book but yeah
EDIT: I got further in the book and there is a giant section all about financing "your wedding" and I am over it! Also I noticed all his examples of "what his friends did" were about how his friends makes $200k a year and spends $5k a year on shoes but it's fine cause you shouldn't feel bad about buying things you ~*~REALLY CARE ABOUT~*~! Well forgive me but I just don't find his examples that inspiring! Also he is extremely opinionated, in and annoying way. If you don't have a target date fund you are a LOSER, according to him. Even though he didn't like mutual funds. And it's kind of weird he didn't mention through the whole book how you have to be employed to contribute to an IRA, he just takes for granted you WILL have a 401k and an IRA and you WILL have a wedding lol.
I'm subtracting another star because I'm annoyed now
Anyway it's just dawning on me that this book seems to be written for Young Professionals making at LEAST $60k a year at jobs that offer 401ks, because a good deal of this book is about 401ks and assuming you will be getting one or already have one. Some of us are unemployed, RAMIT. Some of us have been a barista all our lives and can't save $2,500 a month for "our wedding" and $19,000 a year for our 401k. Lolol.
And he says that 50% of our income should be for "fixed costs (rent, utilities, etc.") Meanwhile some of us are accustomed to allotting well over 50% of our income just towards rent. *loling intensifies*
I'm just here for the section on investing, which is apparently near the end of the book but yeah
EDIT: I got further in the book and there is a giant section all about financing "your wedding" and I am over it! Also I noticed all his examples of "what his friends did" were about how his friends makes $200k a year and spends $5k a year on shoes but it's fine cause you shouldn't feel bad about buying things you ~*~REALLY CARE ABOUT~*~! Well forgive me but I just don't find his examples that inspiring! Also he is extremely opinionated, in and annoying way. If you don't have a target date fund you are a LOSER, according to him. Even though he didn't like mutual funds. And it's kind of weird he didn't mention through the whole book how you have to be employed to contribute to an IRA, he just takes for granted you WILL have a 401k and an IRA and you WILL have a wedding lol.
I'm subtracting another star because I'm annoyed now
August 5, 2012
I was curious about Ramit.
I don't love everything about what he's doing, but I think he's a Challenger Sale kind of blogger. He knows what he knows, and he's mostly right.
I've been following Dave Ramsey - and what I can say is this book beats the crap out of dave.
The basic message behind Dave's stuff is this: you're stupid, spending is stupid, and you should feel guilty every time you spend a little money that's not perfectly planned. Oh, and you have to eat crap food and drive a clunker if you have any debt.
The basic message behind Ramit's stuff is this: You're gonna spend on a Latte, you might have a car payment. We can work with that, let's automate your stuff so it's set up to get what you want.
I automated. Since reading:
1.) I no longer have automatic things debiting me. They are over, for the most part. That saved me $800/year (or more).
2.) I now have a decent retirement - Schwab puts money in an account each month, and i never miss it.
3.) I have paid off 12% of my debt - I shoot for 1.5% of original debt a month and I'm doing 2.5% most months. (5 months in)
I don't miss it. Yes, my income is increased, but that's part of the point.
I don't love everything about what he's doing, but I think he's a Challenger Sale kind of blogger. He knows what he knows, and he's mostly right.
I've been following Dave Ramsey - and what I can say is this book beats the crap out of dave.
The basic message behind Dave's stuff is this: you're stupid, spending is stupid, and you should feel guilty every time you spend a little money that's not perfectly planned. Oh, and you have to eat crap food and drive a clunker if you have any debt.
The basic message behind Ramit's stuff is this: You're gonna spend on a Latte, you might have a car payment. We can work with that, let's automate your stuff so it's set up to get what you want.
I automated. Since reading:
1.) I no longer have automatic things debiting me. They are over, for the most part. That saved me $800/year (or more).
2.) I now have a decent retirement - Schwab puts money in an account each month, and i never miss it.
3.) I have paid off 12% of my debt - I shoot for 1.5% of original debt a month and I'm doing 2.5% most months. (5 months in)
I don't miss it. Yes, my income is increased, but that's part of the point.
January 4, 2014
I'll keep this short and sweet: absolutely everyone should read this. High school kids should read this. My mom should read this. You should read this. It's the best book on personal finance I've ever read. Step by step instructions on exactly how to get your financial life in order. I read this years ago and it paved the way for me to eliminate my credit card debt and start investing. A must-read.
May 18, 2019
Spoonfeeding for the financially illiterate.
October 14, 2021
Book contains useful info but it's annoying bc he's basically a boomer that is shitting on millennials. Also annoying how he constantly uses stereotypes of Indians to get his point across
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February 10, 2024I found the second edition of this book a great update - it has even more useful information than the original. I enjoyed the new chapters discussing managing money for big life events and scams such as cryptocurrency.
I really like Ramit Sethi’s approach to personal finance - it’s very human and unflashy, focusing on persistence, consistency, and good habits. I learned a lot about finance from the book, and I intend to implement some of these ideas.
I really like Ramit Sethi’s approach to personal finance - it’s very human and unflashy, focusing on persistence, consistency, and good habits. I learned a lot about finance from the book, and I intend to implement some of these ideas.
September 6, 2020
If you can make it past the author's self congratulatory introduction, this book provides real insight into pensions, investing money, getting out of debt and making use of credit cards for rewards. I finally understand what a 'diversified portofolio' and 'index funds' mean and why index funds are better than mutual funds. All this normally boring, complicated banking jargon is really well summarised and explained. I have learnt so much from this and I am taking all the advice on board and opening up some investing accounts! The author really grew on me in later chapters too! The big downside is that it is for the US reader, but luckily most of the accounts Sethi recommends have a UK equivalent.
December 6, 2021
I've heard people recommend this book several times, so I thought I should read it to know if I should be recommending it as well. I read the author's blog for a while years ago, but I didn't make it through the introduction of this book. He's made negative comments about fat people and disabled people, called people who don't make much money "whiners" and said the reason most people don't have their finances in order is because they're lazy. I guess that's his schtick, but I can't recommend this to anyone.
December 4, 2023
original read: 2013
This book was a revelation when I first read it. I can't really recommend the chapters on investing for non-US residents but everything else still holds up. This is a great book for people who want to optimize their earnings and savings by having a few clear goals and then automating the rest.
This book was a revelation when I first read it. I can't really recommend the chapters on investing for non-US residents but everything else still holds up. This is a great book for people who want to optimize their earnings and savings by having a few clear goals and then automating the rest.
January 24, 2019
I'm not the target market for this (not millennial, and not into getting barked at sarcastically), but I still learned some practical new things.
I do highly recommend for anyone under 30 - it has all the basic important money knowledge, plus hacks, specificity, and clear explanations.
I do highly recommend for anyone under 30 - it has all the basic important money knowledge, plus hacks, specificity, and clear explanations.
January 9, 2024
A slow read for me but overall helpful. 6 months of patient care has made me realized I don’t want to HAVE to work until 65 😂. So appreciate some basics to help me refocus financial planning and priorities this year! 3 stars because there is a lot of cheesy anecdotes and the client reviews all throughout the book were personally a little annoying and unnecessary but at the same time appreciate Ramit’s humor.
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