Book Review: I Will Teach you to be Rich-Ramit Sethi

by Matt B

IWTYTBREven though I have owned this book since it’s release date, and read it in it’s entirety within a week, I for some reason did not get around to writing this review until now.  In case you are not aware, Ramit Sethi writes a blog titled I Will Teach you to be Rich, so I suppose he only found it fitting that his first foray into the publishing world share the same name.

Before I begin the actual review, let me tell you this. I would not hesitate for one second to recommend this book to anyone I know that is 35 years of age or younger.  Ramit has a very entertaining and unique voice that I understand and appreciate.  If you are not sure of his writing style, here is what I recommend: Go to a bookstore and grab I Will Teach you to be Rich.  Read the introduction, titled “Would you Rather be Sexy or Rich”? You should be able to do this in about 5 minutes. If you are not a fan of his writing style, put it back on the shelf. No harm, no foul. If you do enjoy the intro, pick up the book.  It will not disappoint.

Ramit’s Six Week Program

Ramit has set up a six week program that emphasizes various aspects of personal finance in each week.  You do not have to be a genius to understand or employ his methods, and this book is not written for a certain “crowd”.  The advice he dishes out can (and will) work no matter what you make or what liabilities you carry.

Week 1-Optimize your credit cards

Ramit (like myself) is a firm believer that credit cards CAN be used for good, if used responsibly. This chapter shows you how and where to obtain your credit report at no expense, how to set up your card(s), how to handle your cards, and touches on ridding yourself of debt.  I especially enjoy the area of this chapter that scripts how you should speak to customer service reps during different scenarios. That itself can save you the $14 dollars you would pay for this book (and then some).

Week 2-Beat the Banks

Beating the banks is relatively easy if you follow Ramit’s advice.  This chapter will help you open a new Checking account that will not rob you blind, open a high-interest online savings account and fund these accounts.  Having accounts that work with each other will help you automate your finances (that comes later) and online accounts can be taken care of anytime at any place. Ramit also highlights how banks make their money and compares Credit unions to Banks.

Week 3-Get Ready to Invest

Week three begins my favorite chunk of I Will Teach you to be Rich.  Investing is a very difficult subject for most people to handle. Ramit makes the entire process very simple.  This chapter is all about retirement savings, so 401k accounts and IRA’s are covered in great detail here.  These accounts are explained in simple terms, giving the reader a better sense of comfort when confronting them. At the end of this chapter, you will have a good working knowledge of retirement accounts.  You will understand how they work, how to fund them and the importance of setting them up early in life.

Week 4-Conscious Spending

If you read his blog, you know that Ramit likes the big wins. He does not want to bother with frugal tips.  I’m more of a fan of using both mentalities when it comes to conscious spending.  I like to save tiny bits here and there, and go for the big wins.  In this chapter, we learn how to save big chunks of money while remaining aware of everyday spending. Budgeting is important, and this chapter shows you how much money (in percentages) you should be allocating to costs of life. If you are a spender, heed every word in this chapter and you can easily save hundreds every month.

Week 5-Save While Sleeping

Now, if the reader has been following the steps provided, they have multiple accounts that may be housed in a few different institutions.  This chapter shows how to make your accounts work together by listing them all in one place and connecting them all.  Setting up transfers and payments is integral to automation of your finances.  Once everything is set up properly, reviewing your automated accounts should only take you three hours per month…yes, every MONTH.

Week 6-The Myth of Financial Expertise/Investing isn’t Only for Rich People

These two chapters cover how full of crap the talking heads of finance on Television and Radio are. As if we didn’t already know, Ramit shows us examples of just why we should not let ourselves become overwhelmed with too much information. Those supposed financial experts are often just as clueless as you and me, what’s the difference? They get paid to talk about finance, we do not.

The investing portion of this chapter is devoted to market investing. Since you have already established retirement funds, now it is time to decide what type of investor you are.  Ramit shows you just how to do this. Although I will not delve into specifics, I will tell you that this chapter is priceless. There are countless charts and examples of investment strategies and how they typically work out over time. ETF’s, Index funds and Individual stocks are all given their time to shine and there are plenty of pros and cons to consider before you decide your own investment strategy. Research and purchasing are also covered here.

Easy Maintenance/A Rich Life

The last two chapters serve much like an epilogue in a novel. All of the important in house work should be now be done, and it is time to work on the outside influences. Easy maintenance covers re-evaluation of your finances (which will be necessary on occasion) and general upkeep. Goals are important and often need revisiting and revamping for true success.

A Rich Life is more like a collection of posts that would have shown up at Ramit’s blog than in a book, and perhaps they were. This section hits on major purchases, life events and career. Things like your wedding, first car, home purchase and big ticket items are examined with advice on doing these things right. Negotiations are also a big deal to Ramit and he brings us do’s and don’ts for these sometimes awkward situations.

All things considered, I Will Teach you to be Rich hits every topic with great accuracy and intelligence. This is just a great personal finance book. It is nice to see such a good guy with such a hard work ethic create a worthwhile, no-nonsense and easily readable book like this one. Keep coming around here, as I will soon be giving away a copy of I Will Teach…here at Financial Methods. If you would rather not wait and try for a chance to win, go buy this book now.

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