"I Will Teach You To Be Rich" Book Review
“I Will Teach You to Be Rich”, by Ramit Sethi, may be the best personal finance book I’ve ever read. Dave Ramsey’s “Total Money Makeover” is excellent, but I think I like this one better. (As an Amazon Associate I earn from qualifying purchases.)
I will say I don’t like the title. At all.
Sethi’s no-nonsense, practical, and doable advice is just what Americans need.
He believes everyone should take control of his own finances, and shouldn’t wait around for the government to rescue him, or worse, simply do nothing. He has no patience for anyone claiming to be a victim when it comes to their money situation. Indeed, he waits all of 14 pages before calling people who complain like this, “crybabies”.
Don’t let his frank and honest style scare you off though. He’s simply saying that you and you alone are responsible for 90% of your financial problems and successes. Once you can accept that, you will be in the perfect mental state to take steps to fix your financial situation.
He outlines and explains these steps in his six-week program. Just to be clear, Sethi doesn’t claim that all your money troubles will be solved in six weeks, just that six weeks is plenty of time to take all the steps necessary to begin the process of getting your financial house in order.
If you follow his advice, each week you’ll accomplish a different financial task: You’ll optimize your credit cards, set up the best type of bank accounts, open a retirement account, monitor your spending, start investing, and automate all of your financial tasks.
Roughly a third of the book is devoted to investing. And thank goodness for that, because investing for retirement is an area of finance that mystifies so many people.
How exactly do you do it? What type of account should you open? What company should you use? Should you buy stocks, bonds, mutual funds, ETFs, or something else? Should I hire someone to do this for me or can I do it myself?
Sethi explains the answers to these questions and many more.
He is a huge proponent of automating as many financial tasks as you can. For example, once you start investing for retirement, he shows you how to automatically invest every single month.
Once you do this, you won’t forget to invest or get cold feet in any given month. The result is your investment account will grow slowly and steadily until it reaches an amount that allows you to retire.
I was a little confused by the chapter that addresses budgeting. In it, he writes, “’budgeting’ is the worst word in the history of the world.” He actually advises his readers to “forget budgeting”.
But in the same paragraph, he says you should create a Conscious Spending Plan. He writes that you should “plan where you want your money to go ahead of time.”
Hmmm. Sure sounds like a budget to me.
At the end of the book, after thoroughly explaining his six-week financial plan, Sethi addresses some specific financial topics that people often have questions about, like student loans, helping parents who are in debt, prenups, paying for weddings, and buying big ticket items like cars and houses.
If you decide to read Sethi’s book, be sure to get the second edition. Your library probably has a copy.
I’d put “I Will Teach You to Be Rich” right up there with Dave Ramsey’s “Total Money Makeover” as the best two books about personal finance I’ve read.
If your main financial goal is to get out of debt, I would recommend Ramsey’s book first. But if you also want to get a rock-solid plan to address other issues, like credit cards, bank accounts, automating your finances, and especially investing for retirement, I’d recommend Sethi’s book.
Follow his plan, and you’ll feel better about your finances immediately.