I recently had the privilege of being a fly on the wall during a one-on-one interview with Ramit Sethi, author of the New York Times Best Seller I Will Teach You to Be Rich. And while I can’t divulge the details of the interview (as much as I’d like to share them with you), I was inspired by Ramit’s ideas and picked up his book from Amazon. What struck me the most about Ramit? He’s young, he’s confident, and his ideas on personal finance aren’t orthodox.
Ramit Sethi’s Advice for Those Interested in Personal Finance
If planning for a secure financial future is a priority for you, some of Ramit’s words may surprise you, especially if you’ve read more traditional literature on personal finance. Here’s what he suggests early in his book:
- Stop trying to be an expert on personal finance. Take action now.
- Keep your choices simple. For most people, financial planning is simple: do some basic research, invest and leave it alone. Save as much as you can, even if it’s just $20 a month to start with.
- Stop spending money on items that aren’t top priority in your life.
Makes simple sense, yes?
Fat and Sassy – and Poor?
Ramit believes the majority of people fall into one of two categories: those who ignore money and feel guilty about it, and those who obsess over the minute details and never take action (think analysis paralysis). Can you relate to one of these categories?
One of the interesting ideas he spells out in his book has to do with a common American pandemic. He claims that the American habit of pursuing information overload leads to consumption-mindedness, resulting in a fat, poor nation of individuals. He backs up his claims with numbers. “Nearly 2/3 of Americans are overweight or obese, and the average America is nearly $7,000 in debt (Sethi, 2009). “ Does our consumerist attitude really lead to a lifestyle filled with unhealthy indulgences and financial ruin? And if so, what does that say for our Nation? Ramit advises we stop pursuing ultimate knowledge about finances and get busy making and saving money.
Buy and Hold – Keep it Simple
When it comes to investing, Ramit’s advice is easy to follow. Invest early, do some research, make a decision, and use a buy and hold approach. He claims it’s not sexy when you can’t brad about your latest Day Trading activities, but it pads your bank account, which is the entire purpose of investing, right? Reevaluate your funds once every six months to provide a financial check-up on your investments.
Spend Money Only Where it Counts
We’ve talked about spending money according to your priorities before here at MoneyNing, and Ramit’s advice follows suit by telling readers to find out what matters most in their life, then cut costs without mercy in all areas except that top priority. Everyone values something differently in their lives, and while one consumer may value keeping a nice suburban home, another may value traveling the world and couldn’t care less if he has a permanent address. Find what matters most in your life then stop wasting money on things that don’t matter that much to you. Stop giving up the best for what’s good or mediocre.
Ramit’s writings are chock full of interesting, useful, and sometimes provocative tips on personal finance and building wealth. There are many ways to read about his ideas, like getting his book on Amazon, from your local library, or from his website at IWillTeachYouToBeRich.com. It’s not your typical personal finance blog.
Have you read Ramit’s book or blog? What struck you most about his views?