Until a few months ago, I hadn’t heard of Ramit Sethi (pronounced Ra-meet, Say-tee) and his blog www.iwillteachyoutoberich.com or his book of the same name. Then one day while I perused the book section at Costco, there it was – boasting a bright orange and yellow cover with black print. It practically screamed out at me. “I WILL TEACH YOU TO BE RICH.” My first thought was, “that sure is an obnoxious title.” But being the personal finance junkie that I am, I chucked it into my cart in hopes that I would learn something new and share it with my clients.
After reading the first few pages I knew this book was different. It’s written in an irreverent, breezy style and I found myself nodding my head and thinking to myself, “I so agree with this” as I read each paragraph. It’s written for people in their 20’s and 30’s (Ramit himself is 27) but this book is a great guide for anyone who is struggling with getting their personal finances in order. It offers great, solid, no-nonsense advice, and an easy to implement 6-week action plan, plus lots of motivating talk about building a life that is “rich.”
Ok, I’ll admit it. I was fooled by the title, which of course is exactly his intent. A rich life in Ramit’s world doesn’t necessarily mean lots of $$$, it means living the life that makes you most happy – which is different for each person.
Ramit is passionate about two things. He wants younger people to take action NOW and build a solid financial foundation (and he gives them the tools and specific advice to do so) and he is passionate about exposing the financial industry’s flaws. He is determined that his audience doesn’t fall prey to the nefarious practices of some advisors and institutions. He doesn’t like big banks, credit card companies, big brokerage companies and most financial advisors (although he does concede that “if you are determined to get professional help, begin your search at the National Association of Personal Financial Advisors (www.napfa.org).” Full disclosure: I am a NAPFA advisor.
A couple of weeks ago, I was fortunate to have the opportunity to interview Ramit about personal finance philosophy at the Commonwealth Club of California http://www.commonwealthclub.org.
I wasn’t surprised to find him smart, witty, engaging, and articulate. I asked him to describe his 6-week action program in 5 sentences or less. He said, “I can do it in 5 words.” He then proceeded to do it in 4, “Automate, Negotiate, Spend Consciously.” I asked him if he was rich. He said “….money is a part of that, but it’s a small part. People seem to think that being rich is only about money, but that is simply not the case.”
To learn more about Ramit’s personal finance philosophy and system, you can buy the book at Amazon.
Or, read his blog or view this video on the Commonwealth Club youtube channel.
Teaser from the book:
Week 1, you’ll set up your credit cards and learn how to improve your credit history (and why
that’s so important).
Week 2, you’ll set up the right bank accounts, including negotiating to get no-fee, high-interest accounts.
Week 3, you’ll open a 401(k) and an investment account (even if you have just $50 to start).
Week 4, you’ll figure out how much you’re spending. And then you’ll figure out how to make your money go where you want it to go. In Week 5, you’ll automate your new infrastructure to make your accounts play together nicely.
Week 6, you’ll learn why investing isn’t the same as picking stocks—and how you can get the most out of the market with very little work.
