I guess common sense isn’t so common. In “I Will Teach You To Be Rich,” Ramit Sethi shares anecdote upon anecdote about people falling into horrible credit card debt keeping up with the unfortunately common consumerist lifestyle. Luckily, the book provides solid advice about how to break this cycle. Three main takeaways from the book are:
1. Optimize your credit
The clowns on r/Frugal would have you believe that credit cards are evil. This is incorrect. Credit helps you track your spending, can get you rewards, provides consumer protection, and helps you build a history that can save you thousands of dollars in interest on home and business loans. The key to these benefits is eliminating credit debt, usually the first step in financial triage.
2. Automate
Nearly everything can be automated: credit card payments, student loan payments, investment into your 401k, bill autopay, deposits to a savings account, etc. We are lazy and prone to passivity, so it is important to take as much day-to-day maintenance out of our hands as possible.
3. Don’t try to beat the market
For every Warren Buffet there are thousands of weekend warrior traders chasing meaningless short term gains. Sethi does a good job hammering home the point that even highly paid professionals rarely succeed in beating the market over the long term. Worse yet, actively traded funds eat significantly into your margins with management fees. It is better to play the long game and choose low-fee index funds (or similar investments) if you’re investing for the long haul.
The fatal flaw of the book is that it errs too much on the side of frugality. In a book about becoming rich, there is very little about increasing your income, starting a side business, or value creation. While Sethi gives myriad tips on reducing spending, the only writing devoted towards making more money is when how to weasel a better raise out of your employers or get a job with a slightly better salary. Frugality isn’t necessarily the best mindset for happiness over the long term, and at least Sethi agrees that one should identify sources of fulfillment and allocate spending to them.
I came to many of the conclusions in Sethi’s book on my own, but that was through five years of reading forums, taking tidbits from friends and the media, and trial and error. The book can be quotidian and Blue Pill at times, but the good certainly outweighs the bad. It is a must-read for anyone in serious debt, or any twentysometihng to attain financial independence.
Read More: “I Will Teach You To Be Rich” on Amazon
WHEEEEEEEEEEEEEEEE!!!!!!!!!! I’m drunk and having so much FUN!!!!!!!!!!
Heil LUCIFER, the glorious Light Bringer!
Heil the Illuminati!
Heil Henry Kissinger!
Heil David Rockefeller!
Heil Bill Gates!
Heil the Rothschilds!
All Praise Satan!!!!!!!!
If you’re a wuss or just don’t have a lot to invest, low-risk mutual funds pretty much guarantees wealth when you get old
hell yea. East Aryan Master Race, reporting in!
erm no… if you don’t have a lot to invest, then low risk mutual funds guarantee you some paltry return that won’t even pay your medical bills in later life…..
investment is for rich people….
investment + inspiration + hard work and sweat = much higher returns….
no one but no one got rich with low term, low risk investing… it’s a huge fallacy…..
Guarantee he made more money by writing about frugality than any of his readers saved by being frugal.
Identify the needs of the market, and produce a good or service that matches it.
Identify a lot of schmucks that will believe anything they are told and then sell them a book telling them just what they want to hear, but which in reality gives them advice that leads them back into the book store to buy the sequel for your first book….. most self help books follow this model…..
An example of a good 21st Century book that is real and decent….. is Roosh’s Bang and Day Bang…. one builds on the other, and it’s useful real factual information that leads you somewhere and is written by someone who lives what he writes about…..
(sorry boy I pirate downloaded it… but if we ever meet one day, beers are on me.)
Identify a lot of schmucks that will believe anything they are told and then sell them a book telling them just what they want to hear, but which in reality gives them advice that leads them back into the book store to buy the sequel for your first book….. most self help books follow this model…..
An example of a good 21st Century book that is real and decent….. is Roosh’s Bang and Day Bang…. one builds on the other, and it’s useful real factual information that leads you somewhere and is written by someone who lives what he writes about…..
(sorry boy I pirate downloaded it… but if we ever meet one day, beers are on me.)
Scumbag ROK commenter:
Lectures others about incentives for people to create value…
PIRATES CHEAP, VALUE-GIVING E-BOOK
At least he didn’t buy it.
If George Clooney (or insert any “real” player) wrote a game book, I might be tempted to buy it as I know they’re probably not talking out of their ass. But I wouldn’t even bother reading the prologue (if it has one) of Bang or Day Bang.
Yeah, I know, Roosh will ban me again for stating my opinion. But, it’s pretty informed, I’ve seen youtube.
You have good sense. Imitate the winners who you know have proved themselves. However, I doubt that Clooney or any of these top men have the inclination or the time to write some pickup book.George is usually in Rome or Nice enjoying himself not writing pua books while living in some shithole East European slum and shagging cheap Hos. Doosh has never made enough on his crappy “books” to afford drinks and has to work washing dishing in some club to pay his keep. In one club some girl took a drop of his cheap fizz water and he jumped over the table to grab the bottle. The bouncers and other guys kicked his arse lol
we have peon in my country who dont have 2 peso to buy book too
Roosh book Bang and Bang Every Day and Night is excellante. You won’t mock when you see results that playas get. this book very rare in Mexico and costs mucho peso and is illegal and you go to prison for posessing it.Govenor won’t permit men to have because it will devastate female who will be powerless in mans hands.
i recommend choose yourself by james altucher. another blue pill man that dances in red pill circles. dont listen to him at all on gender dynamics, but do listen to him on money. the man made bank [millions] and lost it more times than you could concieve. he sits on a ton of hedge funds boards and his foreword was written by the ceo of twitter.
there’s one bit in the chapter i was reading that stood out. he’s chatting with some guy who’s the head of a trillion dollar [you heard that right] family. he turns to the execs and basically says “did you fire all those guys [in the recession] because is it was a good excuse to get ride of the people who weren’t useful anymore?” they all said yeah
the take away is that due to productivity advances big corp is happy culling as much full time workers as possible. the game is all about temporary staff now
a choice paragraph:
“In this new era, you have two choices, become a temp staffer (not a horrible choice) or become an artist-entrepreneur. choose to commoditize your labor or choose yourself to be a creator, an innovator an artist, an investor, a marketer, and an entrepreneur. I say “and” rather than “or” because now you have to be all of the above. That’s it. Those ARE your choices”
its a great book, wallstreetplayboys approved as well [our red pill brothers in finance]
keypoints, its not all hippy bullshit, its a very effective and useful read. and the man has experience to back up his claims
No one gets rich by saving anyway, this book contradicts itself.
Define “rich” I am working with a client, 65 who didn’t go to college and never made more than $75k in his life. (An industrious bartender or good hairdresser could make that today) He is now retiring with $3.3M. He has become rich-by his standards- by savings.
I also have a friend that cleared $900,000 last year and has been doing around that much for 8 years now-he is a shit saver, has $340k to his name liquid.
If you mean to say nobody can amass millions by saving in a short time your probably right-to do that they would have to be trading, but folks who do save (living below their means) can become rich.
I( guess that if you want to live like a pauper and save all of your money in 50 you’ll have something. However, you’ll be at an age where you really don’t enjoy much or have the energy and you would have wasted your good youthful days.Of course you may also just drop dead and then your heirs will appreciate the money lol
Reading this book was a good refresher for a lot of things I learned over the past five years of working full-time. I maxed out my retirement savings during the recession and have seen substantial gains since then. The problem for me, and you mentioned this weakness in your review, is that the book and in fact most financial advice, doesn’t delve into starting your own business and increasing your income. I’m confident I could have several million dollars when I retire (assuming the economy doesn’t collapse and America ceases to exist), but this strategy seems increasingly flawed to me.
I’m far more interested in developing an independent income, earning more than I do now, or earning less but giving me the freedom to live abroad with the same or better standard of living. I’ve recently dropped my automatic paycheck withdrawals from ~25% to 4% (the % that will still give me my maximum matching contribution from my employer). Once I’ve saved $15-20K I’m planning to move to Eastern Europe. I know several schools that need native English speakers, which will give me even more of a buffer as I work on my business. Based on past experience, $1500 a month is plenty to live off of. The rapid decline of California has made this decision easier.
this book changed my life, i read it a few years ago and it led to me paying down all my credit cards in less than a year, optimizing my student loan payments, earning more money on teh side, and investing thousands a year. all this was done in a down economy where my take home pay was pretty much stagnant from my 9-5 job. GREAT book and a great blog
In regards to your point that the book emphasizes frugality too much, Ramit Sethi did a program on increasing your income and starting a side business, “Earn 1K on the Side.”
Thanks, I did not know that. I will check this out.
ill sell it to you at 1/2 price.
I know now to avoid this book.
A much better book (and red-pill in many of its themes) is Debt is Slavery is Michael Mihalik. It’s literally a life-changer if you read it and follow his advice. Every chapter is titled like a financial commandment of sorts: Possessions Are a Prison, Time May Not Be Money But Money is Definitely Time, Money Buys Freedom, Control Your Money Or Your Money Will Control You, Spend Less Than You Earn By Controlling Your Expenses, etc.
I’d also recommend becoming at least somewhat familiar with Dave Ramsey’s principles about avoiding debt. In talking with people from all over the country, Dave says he never once met someone who made their fortunes through Bonus Miles on their credit cards or rewards programs. Those are scams for the masses out there. These cards require you to abide by their various rules and restrictions religiously, which takes time and effort away from other things you could be doing to actually make money.
I’d also recommend Rich Dad, Poor Dad. It’s a good introduction to developing a skill set that allows you to make “passive” income. That is the most desirable kind of income, because you dont’ have to be actively involved in making the money like in a 9-5 job. Passive income is money comes in with little or no additional effort afte you have set up the system.
Part of my journey of freeing myself from the Matrix imposed on us has been becoming more financially aware, and maintaining as much control over my monthly cash flow as possible. Even with my average income, I am able keep about 50% of what I bring home every month because I keep my overhead expenses low. I drive a 13-year old car (that still looks and drives awesome and still turns heads) because I take care of it. I don’t pay for cable TV, I have a prepaid cell-phone, and many of the other obvious things people do to save money. Even these small changes really add up over time.
I mean…I COULD have cable TV, or I could take an extra international trip a year with the money I save by turning off the sewer pipe coming out of Hollywood. Hmmm…
Bartend 1 or 2 nights a week for extra money. It could be at a bar or catering hall where they have weddings.
Bartending is the highest status job in the service industry and is pretty easy. You’re usually in contact with young female waitstaff or fellow bartenders, and drunk patrons/guests.
It’s also a great way to network and practice your game. Everyone wants to be friends with the bartender.
I encourage you to submit a guest post about becoming a bartender — things a beginner should know, how to work your way up, whether those how-to courses are worthwhile, etc. I would really like to read that and I bet others would too.
Good idea, I’ll work on one
Good practical advice. The chickys here in DC don’t do much else other than go to restaurants and bars.
DC is 80% Black. These fat pigs just eat
Bartenders are just servants and part of the hired help.And to make any money you’re going to have to know people to get into the good places where you can make a couple of thousand a night. Otherwise you’ll be serving Bud Light at the Dew Drop Inn and getting nickel tips.
there is an old saying in the music business :
“Those that can : do……. and those that can’t : teach.”
most of these self help books are written by helpless clowns that never made a penny in their lives, and were washed up losers, before they dolled out advice on how not to be a washed up loser like they are….
i mean for fuck sakes… what has Antony Robbins ever done in his life, that gives him the right to preach about being a better person. If he really wanted to be a better a person he’d go out and do something real……
self help is like the modern version of religion…..
“I know…I’m a washed up loser with no hope in life, but after reading this book, i’ll be all pumped up for a month or two, and as that wears off I can buy another book….”
Fuck you, honestly…. I spit on your grave….
You want to get rich get out there and do something….
And it’s BS. by the way that day trading doesn’t work…. if you build a strategy and you learn the markets, all the best returns are in intraday lose money volatility….
40% of the markets daily volume is traded by sophisticated robots, running mathematical algorithms… now tell me the best money is in buy and hold grandpa…..what good is it making 10% a year unless you already have $50M to play with…. buy and hold investing is a rich man’s game…. I’m way too poor for that…..
“i mean for fuck sakes… what has Antony Robbins ever done in his life, that gives him the right to preach about being a better person. If he really wanted to be a better a person he’d go out and do something real……”
The wiki aticle about Robbins does not say much about his success story other then he made money in the beginning by teaching neuro-linguistic programming and Ericksonian Hypnosis, in other words he made money by being a self-help coach, nothing more then blowing smoke up people’s asses. But then again it has been said there is an ass for every seat.
This is where I have more respect for guys like Richard Branson of Virgin, who actually went out into the world had a passion to do something, and he later could see how to segway into other things. It is true that there is a luck factor in any venture, but your chances are better because you have more control of decisions and the ability to make judgement calls on how you want your business to proceed.
Branson rocks. If you read his book he puts up no pretenses, admits most of it was luck, admits to doing LSD, admits to breaking the law, admits that his success was due to the people around him. He’s like the coolest person in the world because he’s completely honest. Very rare.
Yes I can appreciate it when really successful people admit their shortcomings and bad decisions in life. And his success sheds even more light on the elements to become successful: luck, good people around you, and most important : find a niche and be the first person on it.
i think he created his own luck… as i have myself on occasion…. it’s when you take risks and they have to work, and you keep your cool even in the face of trouble and dreadful odds…. life throws you a hand and off you go…..
it might not strike the first time, you might crash and burn, but you pick up again and eventually you get a break….. same like picking up women…..
i think one of the most important things in business that is never discussed in dicky books like these, and even RB doesn’t mention in his book is the importance of having an attitude of cutting losses and being prepared to drop things… (same with women)….
RB flogged Virgin Records his darling, to save his airline…. that took balls…. if he’d been emotional for the label he would have probably lost the lot…..
He never had liquidity, always huge risks on and in the face of trouble, (eg. when they cancelled the $25M bank loan for Janet Jackson’s contract…) he kept his cool and used a clear head to solve the problem….
most trouble and failure in business comes from getting flustered when time pressure is involved….so most business success comes from avoiding time pressure as much as possible and when the dead line is on you and the money is not there….you ignore it ….in that you remain calm and clear and do what you can……
when it’s in your mind that it has to work and you get all stressed, then you lose….. chase the horse and it runs away….
Good Post! I’m a finance and accounting student, and the third step is great advice. That advice is also in “A Random Walk Down Wall Street,” which is a bible for investors. Don’t try to beat the market or don’t try to avoid losses because you may also miss gains in the market, and the market has historically been positive. The buy and hold strategy is great because you will reduce management fees and avoid paying higher taxes. Keep in mind I’m still a student, so I have a long way to go as far as stock analysis goes.
LOL @ the troll/hater comments. The tips on automating finances make this book worth it, few people were talking about that before he did. He’s got other stuff on earning money on the side on this blog and courses. Since reading this book I’ve doubled my annual income and started a side business, and have built up a decent savings. I read rich dad poor dad, dave ramsey, and a lot of their books struggled for years getting my shit together, but something with IWTYTBR flipped a switch and I’ve made steady progress since then. Only wish it had been around earlier.
read the book and whilst it makes sense, it’s his intro his range of products and its well marketed information. thats all. the whole aim is to be consciously aware and read books on people smarter than yourself. ramit doesnt teach stocks because its not safe and suggest index funds. i hope to be really rich in this lifetime not getting diddly 15% while if i learn economics and the way money systems work i could make 150% on my investment.
haha i make 200% profit with rabbit farm at home. profits multiply quick.I have burro too and give ride to old ladies to top of hill to saint shrine for 3 peso.I save all my peso and come to america where I hope to be sucess as MickyD burger boy. When I return home as king with bags of dollars and big american wife the whole village will bow to me like I am Carlos Slim.I read Horatio Allergy book as boy and know how to make big money in america.
Why just don´t buy stuff you can not afford?
They’ve recently started a government mandated scheme in Wales, UK, where they are giving careers advice to women to become an stripper/escort to make £48 000 a year (around 70 000k US I imagine).
Feminists. Bwahahahhahahhaallolololololz.
Seriously?!!
What a fugly looking female with fake tits in that pic.No rich guy would want to be seen with her lol
which are the best books similar to this toipic?
Ramit Sethi follows Roosh V on twitter… good for him!
“Don’t try to beat the market”
What happened in the stock market over the past 30-40 years was the result of a massive credit bubble that drove up asset prices. At some upcoming point over the next few years, there will be a profound market clearing event that hasn’t been seen in 60-80 years. Over the next decade or so, we will see stock markets, debt markets, and currency markets crash. We will see financial crises that will make Lehman look like a total joke while our purchasing power will fall tremendously.
It will not be the end of the world; for those prepared, they can actually profit from this event. There is only one way to protect yourself financially: being financially literate. Don’t listen to the idiot above that wrote this article.
I’m not saying it will be the end of the world. I just think a lot of people around the world are going to lose a lot of money. Exactly how and when it plays out is anyone’s guess. I actually think the world that we’ll enter after this period of debt restructurings will be a much better place with a lot more opportunity, but that’s a different issue.
Good review of the book.
Sethi now focuses almost entirely on increasing income. He teaches a course that goes through creating automated businesses selling info products. So I guess you could say he’s come full circle.