I just finished reading “I Will Teach You to Be Rich” by Ramit Sethi and want to help you decide if it is the right book for you based on where you are in your financial journey.
First, I am so glad I read this book. I learned a lot from it that I already have implemented into my own life and that I will use to help my clients. It is a book that I feel is very applicable to my life right now, but not everyone is in the same place I am (where I have a ton of savings and am on an investing journey).
I’ll start with sharing who this book isn’t for:
This is not the book for you if you are an emotional spender or already have tried to stick to a budget without success. If you have a lot of debt and want support on getting out of debt this is probably not the book that will help you get out of debt. There are many other books out there like ‘The 30 Day Money Cleanse’ or ‘Total Money Makeover’ that are way more useful for that type of situation.
This is also probably not the book for you if you are poor. The book is tone-deaf to the situations of people who are poor. It really is geared for people who make enough that they don’t have to count pennies to make ends meet and get financially secure.
For example, the beginning of the book talks about using credit cards to get cashback and points. He describes spending $40,000 on a credit card in less than a year to get a ton of cashback points. I don’t know about you, but most people I know do not spend that much outside of their rent in a year. If you don’t have that kind of money to throw around, credit card rewards are not something to rely on. In fact, if you are in debt and struggling to keep to a budget you should stop using credit cards because they make it a lot easier to continue to go over budget and get further into debt.
I have learned to use credit cards responsibly (but that wasn’t always the case) so I did find this section helpful specifically because I learned about the Alliant credit card which has way better rewards than the credit card I have been using. Since reading the book I applied for the card and just got it this week. I will be getting 3% cashback in the first year and 2% every year after that.
Ramit’s way of describing budgeting also seems a little off to me. He says to stop focusing on the little things like spending on latte’s and instead focus on the bigger things that you can save money on but then goes into giving an example of the big things being buying a cashmere sweater (this is where the tone-deaf part comes in). I was not buying cashmere sweaters when I was in credit card debt. I wasn’t even buying designer clothes or bags when I was in debt. Most of my debt came from lattes and eating lunch out. Learning to pare down on those things is what got me out of debt. So unless you are going into debt from buying cashmere sweaters you may not find his information on budgeting very helpful.
Now, let’s move onto the parts that I did find extremely helpful.
- Investing: he has a ton of helpful information on investing, like why it is best to avoid the fees of mutual funds and how to diversify your portfolio (a topic that I am particularly interested in) and very helpful information on how your gains are taxed. Since I started investing for the first time this past year I found this information very valuable.
- Scripts for talking to credit card companies and banks: This is one of the things I think most people will find extremely helpful. So many people get screwed over by bank fees and credit card fees. It is often possible to get many of these fees removed but it can feel intimidating to make the call to ask, not knowing what to say. If that is you, this book has word for word scripts for you, giving you the confidence you need to fight those darn fees.
- Advice on Saving for the Future: Ramit suggests saving even when you are in your early 20’s for things like a wedding, a house, and other future big purchases. I think this is so important. He explains why and how in the book.
- Why buying a house isn’t necessarily a good investment for everyone: Hearing this perspective is important. At the beginning of 2019, Brandon and I were working towards buying a house and we even got pre-approved for a loan. Then I started having health issues and we halted the process. We are both so glad that happened because after we sat down and looked at what we really wanted for our future we realized that it would be a better long term investment for us to invest our money right now rather than buy a house. Especially considering we live in a cheap rent-controlled apartment in a neighborhood that we love and would likely move out of if we bought a house.
- Debunking important misconceptions about taxes: There are a lot of misconceptions people have about taxes that are all debunked in this book. I was excited about this, even though it is a small thing because I have yet to read a finance book that discussed this topic in this depth.
There is a lot more to the book but these were some of the major things that stood out to me. If you have any questions about this book or other books leave them in the comments.