Would you like to be rich? If you are like most people then the answer will be YES. With that in mind I have been reading the most popular money focused, money-making and how to become a millionaire books and in this post, I will be sharing my thoughts on I Will Teach You To Be Rich: No guilt, no excuses – just a 6-week programme that works.
I can’t quite remember when I first came Ramit Sethi, but given that when you type into Google the words ‘ I want to be rich’ his website iwillteachyoutoberich.com appears on the first page it isn’t surprising I came across him. His book I Will Teach You To Be Rich is a New York Times and Wall Street Journal bestseller so I definitely thought it was worth a read to see how good it really was.
I Will Teach You To Be Rich sets out to share with you a 6-Week Programme to get your finances in order.
Week 1 – Optimize Your Credit Cards
Week 1 focuses on credit cards and Ramin states that “Credit is one of the most vital factors in getting rich”. The chapter explores credit source and credit report and provides some tips to help you improve your credit score. The purpose is to start acting today because “Rich people plan before they need to plan” and by working on improving your score now it will help you in the long run if you do need credit.
Week 2 – Beat The Banks
In Week 2 the focus is on your bank account. The advice is to not switch banks chasing great introductory rates, but instead to focus on a bank that charges no fee, has a reasonable interest rate and provides a good customer service. By the end of the week you should have a bank account and a savings account.
Week 3 – Get Ready To Invest
Week 3 is all about investing. The main focus is investing in your pension because if you aren’t investing in your pension and your company offers to match your contribution you are literally throwing free money away!
Ramit shares a great statistic in this chapter that “On average, millionaires invest 20% of their household income each year”. If you aren’t at that level yet, don’t panic! Most people are not investing 20% of their household income, but then again, most people aren’t a millionaire. I just thought that was a useful statistic to use as a benchmark.
Week 4 – Conscious Spending
Now when I saw the title of week 4 I was very intrigued. Ramit’s website iwillteachyoutoberich.com focuses on making more money rather than reducing your spending. In fact, he is known for never encouraging to cut your coffee (he is totally against The Latte Factor).
The aim of week 4 is to create a “Conscious Spending Plan”. This is where you make sure that you are “saving and investing enough money each money” so you have the freedom to spend the rest of your money on whatever you like and feel totally guilt-free.
Ramit spends some considerable time comparing the frugal to the cheap and states that “The mind-set of frugal people is key to being rich”. So what is being frugal? According to Ramit, frugality “is about choosing the things you love enough to spend extravagantly on – and then cutting costs mercilessly on things you don’t love.”
Week 5 – Save While Sleeping
By Week 5 you should have a solid plan of how your income is being spent, saved and invested. Now it is time to automate everything so you can spend more time enjoying your money and minimal time managing it.
Week 6 – Investing Is Only For Reach People
The final week, week 6, is all about investing. Between week 5 and week 6 there is a chapter in the book called ‘The Myth of Financial Expertise’. In this chapter, Ramit explains you don’t need an expert and you can invest money yourself. In fact, he says that “the vast majority of twentysomethings can earn more than the so-called “experts” by investing on their own”. That chapter is meant to be preparing you to believe you can invest as week 6 is all about understanding investing more.
Week 6 covers lots of financial topics: stocks, portfolio volatility, shares, bonds, diversification, tracker funds, lifestyle funds and much more. It is a great way to start learning a bit more about key financial terms and products. By the end you should discover what type of investor you are and be able to begin investing.
That’s it the 6 weeks are done, but the book hasn’t ended. There is some extra information on how to manage your system now that it is all set up. Additionally, there are some discusses on big money topics, such as student loans, paying for your wedding and buying a house.
Early in the book, Ramit writes “The single most important factor for getting rich is getting started”. This is a belief I strongly agree with and as a result I am doing most of the things the book tells you to do. However, if you are someone who really isn’t in control of your finances this is a great book. It covers virtually all of the day-to-day areas of finance that you need to handle and if you follow the book in 6 weeks you would be in a better financial situation. Would you be rich? Probably not, but at least you would be on the way.
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