“I Will Teach You to be Rich” Lessons Learned – Book Review

Ramit Sethi’s book, “I Will Teach You to be Rich” does a great job at outlining priorities and emphasizing a balanced approach to achieving your dreams. 

Looking for a no-nonsense approach to personal finance? Ramit Sethi takes a no-holds-barred approach, calls it as he sees it, and unapologetically endorses (or calls out) products and strategies along the way. This is a great book, practical, easy to read and digest, and belongs in every personal finance library! Looking for a quick verdict? Buy the book!

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I Will Teach You to be Rich – Overview

Focus on the “85% solution” where “getting started is more important than becoming an expert.” Be bold! Remember, it is ok to mess up. Work towards the goal of being able to “spend extravagantly on the things you love…” 

From the beginning, Ramit hits the ground running. I appreciate his eagerness to help and get going. During his 6-Week presented in the book, Mr. Sethi covers the necessary details, offers tips, and makes recommendations for readers every step of the way.

Resource Richness and Readability

This book is literally stuffed with action items. This book aligns quite nicely with the goals of our blog and is an excellent tool to further develop Mêtis in your Money Matters. More on some of my favorite chapters, below!

Beyond the book, which is already excellent, check out Ramit’s website for more on personal finance. He also offers readers a newsletter, and various additional reading resources after signing up (not covered in this particular review).

The whole of it starts with the premise of avoiding a victim mentality, encourages and focuses on the big wins, and provides instruction on getting started with what you can.

Within each chapter, there are different options and paths to consider which provides flexibility for a diverse group of readers.

Quality of Content

This is a book with an emphasis on being practical, and getting to your best life as efficiently as possible. It covers ‘how to’ steps for items like negotiation during purchasing a car, and dealing with credit card companies, etc. Additionally, there are quite a few helpful diagrams and succinct summaries that make this guide basically a one-stop shop for getting started!

Readability

For all the excellent material, there is no compromise on readability. I think he does well to explain terms and reinforce them with practical examples. This book also has a lot of testimonials that are encouraging and motivational. However, towards the end of the book, I found they were a little too frequent. Not a big deal, but in the end, I thought the sheer volume was a bit of a detraction.

Adaptability and Application in Family Finances

Almost immediately, right at the very beginning of the book, Ramit’s Letter to Readers points out the importance of a realistic approach to your finances. I appreciate his candor and agree with investing time and energy toward the big wins. Here are only a few of the topics covered in this book:

• This book includes a broad base of knowledge and helpful tips for readers.
• Learn how to manage your credit cards, quickly and effectively pay off credit card debt, and maximize your benefits.
• Find suggestions on high-interest, no-fee checking accounts, and how to negotiate existing fees.
• Boldly plan for retirement with your 401(k) and Roth IRA. Practice conscious spending so you spend on what you want to!
• Learn how to detect and manage psychological biases in your approach.
• Then, get all your tools working together in harmony with his suggested blueprint for automation.
• Become more aware of alleged financial experts and increase your own financial education along the way.
• Managing large expenses like weddings and student loans.

How to apply ‘I Will Teach You to be Rich’ in your Money Matters

A constant theme within the book is the application of the Pareto Principle to personal finances. I agree with Ramit, the 80% or ‘big wins’ is where we should all start. We should not focus on the tiny details until we have the big wins notched on our belts.

Yes, this is a no-nonsense approach. There is only one major problem. If you don’t take action, you’ll miss out! “When you picture your ideal life,” Ramit asks “what are you doing in it?” This book is a great way tool to tackle your financial goals.

Using I Will Teach You to be Rich to develop Mêtis

This book primarily covers a 6-week program and assigns homework for readers in manageable pieces. I love that approach! Practical, straightforward, and complete with a checklist to track your progress along with the estimated time each step requires. It requires discipline, but it is absolutely doable.

The front cover advertises a “program that works” and I tend to agree with that assessment. As I have said, the whole book is helpful. I thought I’d spotlight a few of my favorite chapters!

Save While Sleeping, Chapter 5

Focus on time in the market, not timing the market.

– Ramit Sethi

Automating your finances is a fantastic step towards achieving your financial goals. True to the theme of this book, Chapter 5 digs into the framework that you need in order to get this all started. Ramit is honest, there is hard work upfront and it requires effort! 

Get yourself set up, automate and link your accounts and get your money flowing to address your short and long-term needs. This takes so much guesswork out of it and allows you to focus on your next goals.

Time is your friend – start right away! After you’ve set up your contributions, be patient. Focus on the “smaller wins over time rather than taking big risks.”

The Myth of Financial Expertise, Chapter 6

Don’t get fooled by smooth-talking salespeople: You can easily manage your investment account by yourself.

– Ramit Sethi

Because I have seen firsthand how financial experts can take advantage of people placing their trust in them, this chapter especially resonates with me. The author does well to encourage us all to develop our own financial IQ and to avoid falling into common pitfalls.

I also like that he challenges the conventional approach to utilizing financial experts. There is a lot that we can all do on our own before getting to the point where we truly need to shell out the big bucks.

I Will Teach You to be Rich: What are the 6 Weeks to Financial Control?

Break down psychological barriers, don’t fall for the financial traps, maximize available benefits and opportunities (and more) with Ramit’s Six Week plan.

1. Optimize and Manage Credit Cards
2. Square-away your Bank Accounts
3. Retirement Roth IRAs and 401(k)s
4. Practice Conscious Spending
5. Automate! Making it all work together
6. Create your Investment Portfolio

Parting Thoughts

I agreed with much of this book and I think there is something here for everyone. From budgets to asset allocations, to suggested scripts to use when dealing with credit card companies this book covers a lot of ground.

For all the meat, there are few bones I would pick out. However, those are largely just personal preferences. One is the frequency of testimonials (too many). The other is the judgment against bitcoin (for all the details on other content I think he is rather dismissive on this point). Just a couple of small points!

Value for the Price

Excellent! Definitely a great purchase – what are you waiting for?! This is something you can use and re-use as a reference for years to come. As I mentioned previously, this is one that belongs on your family finance bookshelf.