"I Will Teach You to be Rich" Book Summary
“I Will Teach You to be Rich” is a great introduction to thinking smarter about your finances. This book is an easy starting point to learning how to make smart decisions about saving and investing.
Here are some key takeaways from Ramit Sethi’s book
- You are responsible for your financial problems
- Start investing today, starting early is more important than becoming an expert
- Spend a lot on what you love, and cut back on what you don’t
Lesson 1: Taking Responsibility
This book starts off with a reminder that you must take responsibility for your own money. While there are many different reasons taking control of your finances is difficult, it is important to start learning now, rather than later.
A lot of millennials are afraid to start saving and investing because there are a lot of things they still don’t know. But the younger you are, the more you should be taking risks because you still have lots of time to make up the money you lose. It is okay to make mistakes, so long as you get started. Taking responsibility for your finances is the first step in creating wealth.
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Lesson 2: Start Investing ASAP
The thought of investing sounds scary and hard to many, but once you’re older you will regret not starting sooner. Even if you start off investing a small amount, you can earn a lot of money by the time you retire. Just a few thousand dollars invested each year will end up being a lot by the time you are ready for retirement. By also maxing out your 401k to get the maximum from your employer and also investing in a Roth IRA, you are well on your way to getting rich.
Lesson 3: Have a system to save for your goals, the rest of your money is yours to spend
One great way to manage your money is to have what Ramit calls a Conscious Spending Plan. Use a set amount of your income for fixed costs and living expenses and another portion for investing and saving. The rest of the money you can spend however you like. This gives you a way to save at least a portion of your income without giving up on the things you love.
“I Will Teach You to be Rich” has plenty of great starting points to being smarter with your finances. Not only does it give you an outline of a good plan to start saving, but it really emphasizes making room in your budget for spending on things you enjoy. It’s a great message for beginners since many are not sure how to balance saving fo the future while still having enough money to enjoy the present.
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