Usually, the books about personal finance are packed with so much technical blah-blah that only a certified financial advisor can understand them. But Ramit Sethi’s book, I Will Teach You To Be Rich, comes as a fresh surprise. It is written in the everyday language with a little but of Indian accent if you listen to the audio book like I did. He gives useful advice for those who are taking on their money management journey for the very first time.
Meaning of Being Rich
Ramit Sethi opens the book “I Will Teach You To Be Rich” with a discussion about the meaning of being rich. According to him, everyone is conscious about their health and looks, but are completely oblivious to their financial life. Through an array of different examples, he tries to explain that the meaning of being rich can be different for different people.
Credit Cards and Bank Accounts
The second chapter focuses on the management of the credit cards. In his opinion, everybody should try hard to get a credit card, even if they do not use it – in order to set up a credit history record which might be useful when seeking insurance plans and applying for jobs.
The third chapter advises you to open two separate bank accounts – one checking account and another savings account, so that you can manage your money easily. It tells you about the various tricks that banks play on their customers and how you can avoid them. Ramit also gives a list of his favorite bank accounts.
Investments and Retirement
Next comes the advice about the necessity of opening a retirement account 401(K) or Roth-IR. The author stresses the importance of opening these accounts early in life, so that you do not miss on any savings on these investments.
Ramit Sethi says that he does not believe in making budget plans, but instead he recommends a conscious spending plan. The concept of conscious spending revolves around identifying your essential expenditures and then leaving one-fourth of the money free for unforeseen costs.
Time is Money
The book also explores of the well known idea of “time is money.” Ramit says that we should make things automated using various online tools available for payment of the bills and save time that would have been spent on just paying the bills. This also reduces any chance of penalty imposed when you forget to pay your bills.
Investments for Everyone
Many financial experts may not like this, but the book says that so called financial experts are no better than a well-motivated common man. Ramit argues that many financial advisers do not know the pulse of the market and can actually harm your investments. He talks about the various investment options available today.
The eighth chapter explains how to maintain your investment portfolio, invest more so you can gain more, re-balance investments and manage your taxes. The final chapter talks about the expenses of the life in general – weddings, car, home, education, helping your parents in debt, etc.
The book I Will Teach You To Be Rich presents you with good practical financial advice in simple words. Although some of the tips in the book, like arguing with a banker to open no-fee account, are more of comical in nature than practical, yet most of the financial advices in the book are very much feasible. If you are a beginner looking forward to learning about financial management, then this book is certainly going to be helpful.