Book Report: I will teach you to be rich – No guilt, no excuses, no BS. Just a 6 week program that works. 2nd edition By Ramit Sethi
This book was given to me from a fellow inmate, who I often share books with. It is written by Ramit Sethi, who is the host of Netflix’s show How to get rich. This is really a no nonsense guide on how to look at and automate your cashflow, savings and investments so that one ends up rich, which Ramit defines as having the freedom to do what you want in life rather than some arbitrary dollar amount.
Ramit begins by having you look at your credit score or report and suggests keeping track of it yearly, with some tips on how to improve it. Then he gets into what credit cards are best for travel, eating out, other expenses and business expenses (if you own a business), with additional tips on using credit cards for warranties , car rental insurance, and trip cancellations.
This is followed by a general outline of an individual’s automated cashflow (as much as possible) from paycheck or dividend to checking account, savings account and investing accounts to the importance of paying off your credit card in full and setting up emergency fund and/or big purchase fund. Ramit gives his personal recommendations for which banks offer the lowest fees on each of these different types of accounts. In the investing account, he further breaks it down into a potential 401K account and/or a Roth IRA. Then Ramit gets into discussing these other key points surrounding handling, thinking, saving, spending and investing money;
- Conscious spenders try to get the lowest price on most things but are willing to spend extravagantly on items they really care about
- Fixed costs (rent, utilities, debt, groceries) 50-60%
- Investments (401K, Roth IRA) 10%
- Savings goal (down payment, wedding, emergency fund) 5-10%
- Guilt-free spending (dining movies, clothes) 20-35%
- Use envelope system for pre allocating money for groceries, dining out, entertainment
- If income is not meeting expenses, get a raise, create a side hussle or shave expenses
- Automate accounts and money transfers (cash flow)
- Be cautious with financial experts, consider doing your own Index fund (passively managed), diversify investments,
- Automate investing using dollar cost averaging
- Target Date Funds another good investment vehicle (Vanguard)
- For $1,000 invested per month in 25 years would be $1M
- Rebalance portfolio at least yearly
- Rich life equals freedom
This book is not super applicable based on my current situation, but I did map out for my wife and older children ideas on credit score, credit cards, and individual cashflow. I would also like to set up a 401K for OFC or TGP Management (businesses we own), when I get back. I would also like to set up a dollar cost averaging automated investing program utilizing the Vanguard Index fund vehicle or the Target Date Fund through Vanguard as well. Good to know if I was able to invest $1,000/month it would approximately be worth $1M in 25 years.
