Reading I Will Teach You to be Rich was one of my personal finance resolutions for 2020. This is the fourth personal finance book out of five that I set out to read. It was a pretty easy read, almost like you were in college and talking to a friend who tells you like it is and doesn’t B.S. Here’s my I Will Teach You to be Rich book review.
In this book review, here is a summary of the book and some of the highlights, including what I liked and didn’t like about the book by Ramit Sethi.
I Will Teach You to be Rich Book Summary and Highlights
I Will Teach You to be Rich is geared towards young people in their 20’s. It is written by Ramit Sethi who also runs a blog of the same name. This book is a best-selling personal finance book and aims to be a 6 week program to help you change the way you approach your money.
The personal finance content in the book is solid and covers basics like saving money on bank fees, negotiating big ticket items like your mortgage and your car, and investing your money using proper asset allocation.
In this book he goes over:
- How to optimize your credit cards (like how to negotiate for lower rates)
- Beating the banks (like how to get no fee high interest savings accounts and how to negotiate to waive fees from your banks)
- Getting an investing mindset
- Conscious spending
- How to automate your financial tasks so you can save money while you’re sleeping
- Why financial expertise is a facade
- How investing isn’t just for rich people
- Maintaining all of the above
What I liked About the Book
There are a number of things that I liked about I Will Teach you to be Rich. I liked that Ramit focused on how you don’t have to be a personal finance expert to become rich.
I liked how he focused on empowering the reader and not laying blame on others for not starting with investing, or not saving money, or not getting out of debt (though on the flipside, he doesn’t acknowledge the privilege that he may have had getting to where he is, and doesn’t acknowledge the disadvantages that other people may have in different situations).
Ramit also talked about the paradox of choice, and how getting started is more important than being an expert. Some people, before they start investing, are so paralyzed the the thought of decision making and the intimidating aspect of investing, that they are too scared to start.
“Your investment plan is more important than your actual investments”
The author also advocates paying yourself first, which is something I wholeheartedly agree with. I’m not a fan of budgets as I feel they are too restrictive. He’s a fan of autopilot investing and putting your money on autopilot, even bill payments as autopilot, so you can spend time on things that matter more.
Another thing that I liked about the book that I have not read anywhere else is how he recommends rebalancing to maintain your asset allocation. Ramit Sethi recommends the easiest rebalancing style similar to what I do now, which is by adding in more money to rebalance instead f buying and selling which will trigger tax consequences and commissions.
Ramit Sethi also recommends that you as an investor should stop worrying about the tax consequences of investing and that most people will take a while anyway to max out their registered accounts to worry about taxation on your investment income. Again, it is indecision paralysis, where you are so worried about tax consequences that you’re not investing and therefore losing more money by being out of the stock market.
In addition, I liked that he recommends that you don’t let your family manage your money and that you as an adult should take the ownership of your own hard earned money and do it yourself (not specifically DIY investing, but invest your money yourself in general). Believe it or not, I have a few friends and acquaintances that I know who let their family manage their money. One uses her parent’s financial planner who charges a 1% fee to actively manage their money, and another has his dad do the investing for him.
Finally, last but not least, I liked the ‘cameos’ and recommendations from other notable personal finance bloggers, like J.D. Roth from Get Rich Slowly, Trent Hamm from The Simple Dollar, and Jim Wang who had a previous blog (the link in the book is dead). It was like reading a diary of my 2009 blogging days.
What I Didn’t Like About the Book
It was interesting to read the older version (2009) of the book as it was dated. It was like a flashback to my 20’s, with the mention of iPods (I don’t even know where my iPod nano went… did I sell it?). Ramit Sethi has since come out with a more updated version (2019) but I didn’t read that version.
I also did not like some of the comments in the book, there are some pretty chauvinistic and sexist comments in there which was a turnoff for a female reader like myself. Ramit Sethi’s book was pretty crass, talking about strippers etc. But I guess the book is geared towards younger men as an audience.
In the investing portion of the book, he talked about the Swensen model portfolio as an ideal or goal asset allocation to have. David Swensen manages the Yale endownment fund and has been the chief investment officer of Yale for over 35 years.
I had never heard of the Swensen Model Portfolio, and was a bit surprised that it recommended both 30% bonds asset allocation and 20% REITs asset allocation. To me, 30% bonds is too high for someone with a long working career ahead of them and 20% REITs is too high too.
Hope you enjoyed my I Will Teach You to be Rich book review. I thought I Will Teach You to be Rich was a decent book. It is a good comprehensive personal finance book which covered important financial lessons such as getting out of debt, negotiating on big ticket items, and even investing.
It was a bit long though and I think he could have shortened the personal finance and investing topics that he covered. As mentioned, I also didn’t like some of the comments made like “Nancy’s are not hot” (don’t worry my name is not Nancy and I didn’t take personal offense) but I guess that’s some of Ramit Sethi’s charm…. or part of why he is so popular?
Have you read this book?
What is your I Will teach you to be Rich book review?
GYM is a 30 something millennial interested in achieving financial freedom through disciplined saving, dividend and ETF investing, and living a minimalist lifestyle. Before you go, check out my recommendations page of financial tools I use to save and invest money. Don’t forget to subscribe for blog updates, a free dividend yield spreadsheet, and the free Young Money Bootcamp eCourse.