- Title: I Will Teach You To Be Rich
- Sub-title: No Guilt. No Excuses. No BS. Just a 6-Week Program That Works
- Author: Ramit Sethi
- About the author: Ramit Sethi is an entrepreneur and an author, advising individuals on personal finance. He is a New York Times Best Seller and the creator of IWillTeachYouToBeRich.com, where over a million people read the material every month. He graduated from Stanford University after studying technology and psychology.
- Pages: 352
- Published: 2019 (Updated version)
- ISBN-10: 1523505745
- Link to book
Personal finance is no longer boring and dreadful. And it’s no longer restrictive! What if someone actually recommended that you spend lavishly on what you love to do and enjoy? You would follow their lead in an instant, right?
Well that is exactly what Ramit Sethi does in his book. In the recently updated version of I Will Teach You To Be Rich, Ramit shares a variety of advice on finances and life, including the recommendation that people should unapologetically spend money on the things they enjoy.
He says that you can spend money on those things and buy all the lattes you want. The over-played financial advice of saving small amounts of money here and there is not what the author focuses on.
Instead, he focuses on having systems in place to automate your money, minimize fees, maximize returns, and simplify your personal finances into something that is manageable for you.
He focuses on the “Big Wins,” which are key areas on one’s life where a few things done correctly can save someone tens of thousands, hundreds of thousands, or even millions of dollars depending on the scale.
Saving that amount will do more for you than cutting out your lattes ever will. The advice Ramit gives and the systems he offers you is what grants you the freedom to spend your money on the things you love while still being financially responsible. That is the beauty of this book.
I Will Teach You To Be Rich offers a 6-week program to achieve financial control and set yourself on the path to wealth. He emphasizes a “no-BS” system and lays it straight on the reader. There is no sugarcoating and he tells you how it is, which I appreciate very much.
Topics discussed in the book include:
- Being sexy vs being rich
- Optimizing credit cards
- Beating the banks
- How to consciously spend
- Saving automatically
- Why advice from “experts” isn’t necessary in finance
- Building a winning portfolio for yourself
- Maintaining and optimizing your investments
- How to manage finances for your relationship, wedding, car, and home
- The exact words to use in negotiations
The book is packed with information across the entire spectrum of personal finance. The book itself is easy to read and the humor in the author’s writing will have you reading through the entire book in one sitting because it’s actually entertaining (gasp! An entertaining finance book?!).
I Will Teach You To Be Rich provides a program and the steps you need to take to get your finances on track to be rich one day.
I would recommend this book to any individual at any stage in their life and personal finance journey.
The book is filled so densely with information and practical knowledge that anyone from beginner to expert would likely come across something eye-opening to them.
There are some books on my reading list that only appeal to a certain crowd and wouldn’t be valuable for everyone to read, but this book is not one of them.
This is a book I believe everyone should read. It does not matter if you are a professional in business or the arts. Everyone has to have personal finance knowledge, skills, and a plan. I Will Teach You To Be Rich offers that.
Top 15 Takeaways
* In no particular order
1. Investing is the single most effective way to get rich. And the single most important thing you can do to be rich is to start early.
2. Spend extravagantly on the things you love and cut costs mercilessly on the things you don’t.
3. You don’t have to be an expert to get rich. You do have to know how to cut through all the information and get started. Ignore the noise of money advice. The glut of information causes paralysis and poor decision making.
4. Investing should be very boring. There’s a difference between being sexy and being rich. Investment isn’t about being sexy – it’s about making money, which is about buying and holding for the long-term.
5. Implement small steps and take things one thing at a time.
6. The 85% solution: getting started is more important than being an expert.
7. The automatic system is great, but it’s fueled by one thing: the money you feed it. You need to put as much money into your system as you can and as soon as you can.
8. Don’t live in the spreadsheet. I encourage you to pick a financial system and move on with your life. Avoid becoming that person who becomes knowledgeable on personal finance and checks their numbers and stats all the time.
9. Play offense not defense. Go out there and negotiate down those fees and costs of large items and gain those returns on your money.
10. Focus on the Big Wins – the 5 to 10 big things, rather than small cost cuts like lattes, etc. Turn your attention from micro to macro. Stop focusing on picking up pennies.
11. You want to automate as much as you can for paying bills and funding accounts (savings, investment, etc).
12. Conscious spending and being cheap are not the same thing.
13. Systems are great. You front-load work now and get the benefit for years and years.
14. Asset allocation is the most important factor in investing and volatility. The appropriate asset allocation for someone will vary by age and risk tolerance.
15. Real estate is a poor investment for most individual investors. The cost of owning a home is a lot more than the purchase price. In addition to a mortgage, you will have property taxes, insurance, and maintenance fees.
What I Liked
Covered a full spectrum of personal finance
The book covered everything essential under the large umbrella of personal finance. It covered credit cards, banking, investments, taxes, real estate, car buying, getting a raise, and much more.
No stone was left unturned and I thought this made the book exceptional. If your finances are currently poorly managed, implementing everything in the book will have you doing a 180 degree turn.
The author wrote well and in an entertaining fashion. You could definitely feel his personality and tone of voice behind the words. The book reminded me of reading blog posts, which usually have more voice behind the writing.
Finance can be boring to people and most don’t want to confront the issue of their personal finances. When a book is entertaining, such as I Will Teach You To Be Rich, it makes the entire process more enjoyable.
There wasn’t a point in the book where I was falling asleep. The author balanced delivering concrete information with sprinkling in his personality, opinions, and personal stories.
The book is very practical and the advice given is accessible to the masses.
Ramit isn’t teaching you ways to be rich that first requires money, privilege, or knowing the right person. Mostly everything can be done on your own from the comfort of your own home too.
Nothing was too outlandish or over the top, but some of the tips might bring you out of your comfort zone.
For example, Ramit shares several examples throughout the book of him negotiating things like fees and terms for a car purchase. He is a proponent of negotiating which involves confrontation and friction.
To achieve the results he has gotten in these areas, you will have to get out of your comfort zone, play offense, and negotiate.
Challenges norms and “experts”
This is another personal finance book that challenges the norms and experts. A previous book review I did on Financial Freedom by Grant Sabatier has a similar theme.
Some of the norms Ramit challenges in the book include:
- Investing is a sexy and exciting endeavor
- Investing is only for the rich
- You need a financial advisor to invest and achieve returns
- Student debt is evil
- Personal finance is constantly time consuming
- All prices and fees are final and non-negotiable
- Real estate is a good investment
You may read some of these and agree with them, but you will have to read the book yourself to see the argument from Ramit’s point of view. Your view may change.
I like that the norms were challenged because the norms are named that for a reason: they’re normal.
When something is against the norm, it is usually new information or a new point of view. I enjoyed hearing the reasons why the typical advice around money and investing was not true.
Some of this was brand new information to me and some of the claims were things that I had thought in my own head, but had never heard it confirmed before.
Examples, tables, charts, and diagrams
This book is filled with items that help communicate the information in the book visually and drive home the message to the reader.
Throughout the book, there are quotes from people within Ramit’s community of readers sharing testimonials on their experience on implementing tips from I Will Teach You To Be Rich (the website and the previous editions).
They show how the information has made an impact in their lives and offers you a glimpse of the possibilities for your future if you take the same action.
One thing I appreciated about the book was how aesthetically pleasing it was to read. The tables, charts, diagrams, and colors made the book engaging and brought it to life. It wasn’t just a bunch of white pages with black text.
The use of the figures gives us visual learners a way to comprehend what the author is teaching.
Steps, rules, plans, scripts, ladders, etc
Information isn’t just laid out for you to decide what to do with it. The author offers a road map for different things in the form of steps, rules, plans, and a “ladder.“
A few examples from the book include:
- The 6-week program the book is based on
- 10 Rules for a Rich Life
- Conscious Spending Plan
- The 6 Commandments of Credit Cards
- The 5 Steps to Getting Rid of Credit Card Debt
- The Ladder of Personal Finance
- The Automatic Money Flow
- The Pyramid of Investing Options
There are more in addition to this list as well.
Presenting information this way also reminds me of a blog. It works well on a blog because the “10 rules” or “5 steps” to anything is a small round number that appeals to readers.
Using this format in a book was effective. It made the information memorable, less intimidating, and offered a plan of attack or a list of advice on all topics.
Blend of psychology
Ramit Sethi studied psychology and the University of Stanford and his advice is considerate of natural human behavior and thoughts related to personal finance. The tips will help you overcome human tendencies and fears to think logically and take action.
Automating processes is a large part of overcoming human psychology. Automating withdrawals, savings, and payments will keep you on track and take out a lot of the emotions that come with finance.
For example, it would be painful if you had to manually take $500 a month from your checking account and deposit it into your 401(k) account. However, when you automate this, the withdrawal is done automatically and you won’t even think about it or notice it.
Benefits For Your Life and Career
Being “rich” means different things to different people, but generally, most people out there want to be rich. I believe this book delivers on its title “I Will Teach You To Be Rich.”
It teaches you to be rich and gives you the tools, resources, and steps to achieve it. The book offers a 6-week program to follow and your personal finance life can look drastically different at the end of the program.
Just imagine. In 6 short weeks, you can set yourself on a completely different path; a path to wealth and financial freedom. Note, you won’t be much wealthier at the end of the 6 weeks, but your path, habits, and systems will be changed and your trajectory will upwards.
Worrying about money sucks!
Implementing the information of this book will improve your day-to-day life and set you up for retirement. Worrying about money is awful, but sadly most do. This worrying follows you at home, at school, at work, and even when you are out trying to have a good time.
By making the changes recommended in I Will Teach You To Be Rich, the chances of your finance-related stress going away substantially increase. This will bring peace of mind to you and affect your overall well-being, which will trickle into all areas of your life and career.
Although the book is densely packed with information and calls to action, each action you need to take requires a minor amount of effort in time.
Just check them off one at a time until you complete them all. Ramit emphasized the importance of taking small steps. Each action item is a small step. When you complete each small step, you’ll be further ahead more well-positioned than 99% of individuals.
10 Actions You Should Take
1. First off, complete the 6 Weeks of Action Steps that the book is founded on.
2. Don’t wait until you are 100% ready or have 100% of the information to get started with anything. Use the 85% solution and avoid paralysis.
3. Look at your expenses. Cut down mercilessly on useless purchases and spend unapologetically on the things you love.
4. Sign up for savings and investment accounts and automate their funding.
5. Call your credit card company and ask for fees to be waived and negotiate a lower APR. This will benefit you in the realm of credit cards, but will also break the barrier for you to have confidence to negotiate in other areas, such as purchasing a car or home.
6. Set up your Conscious Spending Plan and Automatic Money Flow so your money flows automatically and you ensure that you are saving and investing. Anything left over is yours to spend with zero guilt since the other important areas have already been taken care of.
7. Research index funds and target date funds and realize why they are great options for nearly all investors.
8. Once your systems are in place, find ways to feed to the system (i.e. fund your savings and investment accounts even more). Do this by making more money. Get creative and hustle.
9. Make a plan to negotiate a salary raise and execute it.
10. Focus on the “big wins” rather than penny pinching here and there. Instead of avoiding soft drink purchases as a way of saving, focus on automating your savings and investing, negotiating your salary, getting the best deal on your car and home, finding the right spouse, etc.