19 Things That I Learned From “I Will Teach You to Be Rich”

In his book “I Will Teach You to Be Rich”, renowned author and personal finance expert Ramit Sethi provides advice on achieving financial success while living a personally fulfilling life. By combining his practical strategies with an automated approach, readers learn to gain control over their money and start making smart financial decisions.

The beauty of reading this particular personal finance book is that Netflix recently released a series where viewers watch Ramit break down the spending of people in varying financial situations and he applies the concepts from “I Will Teach You to Be Rich” to help them reach their “rich life”.

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Not everyone will be able to find the time to dissect every aspect of the book, but together with the show, I think there’s lots of great information that can help guide your relationship with money. As a young professional, these resources helped me navigate controlling my finances and setting myself up to life my rich life asap.

This blog post summarizes the key tips from the book and show, organized into sections covering Debt, Saving, Investing, Conscious Spending, and ultimately, the pursuit of a Rich Life.

What I will teach you to be rich says about debt 

Managing debt effectively is key to creating a more abundant financial future. Without working to get out of debt, you’ll always be fighting an uphill battle with money. Here are some tips from the book “I Will Teach You to Be Rich” to help you manage your debt:

Automate your payments

Set up automatic payments for your bills and loans to avoid late fees and penalties. This strategy also ensures you stay disciplined with your debt repayment plan.

Prioritize high-interest debt

Focus on paying off debts with high-interest rates, such as credit card balances, before tackling lower-interest loans like student loans or mortgages. Interest drains your pockets of money that should be YOURS especially when it comes to credit card debt. Paying off the balances with the greatest interest first keeps more money in your pocket in the long run.

Negotiate lower rates

Explore the possibility of negotiating lower interest rates on your existing debts. This approach can potentially save you thousands of dollars in interest payments (dependent on how much credit card debt you’re in)— the worst thing that can happen is the credit card companies say “no”. The best-case scenario? You ask and your rates are lowered.

Be cautious with loans

Before taking on any new debt, evaluate its long-term implications and ensure it aligns with your financial goals. Carefully consider interest rates, terms, and associated fees. This is particularly important when making decisions like buying a car or a home.

What I will teach you to be rich says about saving

Once the debt is being handled effectively and you have a strong automated system for paying down your debts, Ramit suggests focusing on saving next. Saving is fundamental to creating wealth and you can start saving using these tips:

Set up automated savings

Similar to debt, establish automated systems that transfer a percentage of your income directly into savings accounts. By doing so, you prioritize saving and remove the temptation to spend excessively. You can put savings into an emergency fund and even create separate savings accounts for specific goals like a home down payment or vacation.

Create a separate emergency fund

Build an emergency fund to cover unexpected expenses and create a buffer during challenging times. Aim for a minimum of three to six months’ worth of living expenses. This can be especially important if you are self-employed or have a variable income — in this case, aim for 12 months of living expenses if possible.

Leverage high-yield savings accounts

Consider utilizing high-yield savings accounts to maximize the interest earned on your savings. Each day money in savings accounts becomes less and less valuable due to inflation. It’s still important to have a savings account for emergencies and purchases happening in the near future, so having a high-yield savings account helps to reduce the value lost due to inflation.

Track your spending

What I will teach you to be rich says about investing

As mentioned above, each day your money simply sits in savings, the value of it decreases due to inflation. The next step to not only accumulating wealth but also growing wealth is to invest. Here are key tips on investing:

Start early

Time is your best friend when it comes to investing because of compound interest. Begin investing as soon as possible to take advantage of compounding returns. The earlier you start, the more time your investments have to grow.

Diversify your portfolio

Allocate your investments across different asset classes, such as stocks, bonds, and real estate, to minimize risk. Diversification helps protect your portfolio during market downturns. The book has very detailed sections about each asset class and how you may want to allocate your investments depending on when you begin investing/when you plan to utilize your investments.

Take a long-term approach

Avoid trying to time the market or making frequent changes to your investments. Instead, focus on a long-term investment strategy and stay invested for the long haul. A hands-off approach is best. Ramit even suggests automating your investments and only looking at your portfolio once or twice a month. Unfortunately, I have a bad habit of checking my stocks app.

Educate yourself

Develop a solid understanding of basic investment concepts and stay informed about market trends. Consider reading books, attending seminars, or consulting with a financial advisor to enhance your investment knowledge. Financial advisors can be tricky though, so you should only use them if they’re being paid hourly and if you have a large portfolio (> $1 Million)

What I will teach you to be rich says about conscious spending

Instead of forcing yourself into restrictive budgeting habits, you should focus on allocating money where it allows you to live your “rich life”. Conscious spending means being intentional with you money. Here are key tips for conscious spending:

Define your values

Identify your priorities and values and allow these to guide your spending decisions. Spend money on the things that truly matter to you and align with your goals. You should be cutting spending mercilessly on things that don’t bring joy and be spending care-free on things that you love (within reason of course).

Use the 48-hour rule

Implement a cooling-off period before making significant purchases. This practice helps prevent impulse buying and allows you to evaluate whether the purchase is truly necessary.

Maximize value

Look for opportunities to save money without compromising on quality. This can involve negotiating prices, using coupons or discount codes, or taking advantage of cashback and rewards programs. Once you realize that as the consumer you have way more purchasing leverage than you think, you’ll be able to save much more.

What I will teach you to be rich says about rich life

Beyond financial success, Sethi encourages readers to embrace a Rich Life, which goes beyond just money. Developing a conscious spending plan is the first step towards a rich life as you focus on your values and begin to prioritize purchases as they align with your values, but none monetary related tips include:

Cultivate meaningful relationships

Invest time and energy in building and nurturing relationships with loved ones. These connections provide invaluable support and contribute to a rich and fulfilling life. This may relate to spending money on experiences rather than things, or simply putting away the spreadsheets and budgeting tactics so that you can be more present with loved ones.

Pursue personal growth

Continuously learn and develop new skills that align with your passions and interests. This not only enhances your personal growth but also opens up new opportunities for career advancement.

Enjoy the present while planning for the future

Strive for a balance between enjoying the present moment and preparing for a prosperous future. Set goals and milestones to stay motivated and celebrate your achievements along the way. Whenever you come into unexpected income like a tax return or bonus, set aside half of the money for guilt-free spending and use the other half to fund a savings goal or pay down debts.

Give back

Practice generosity by contributing to causes that are important to you. Donate your time, skills, or money to make a positive impact on the lives of others.

Netflix Series

Ramit Sethi’s Netflix series opens up a new pathway for people to develop financial literacy. If you’re someone who prefers watching TV or typically need to multi-task, the series may be a more manageable option compared to reading the book.

I personally enjoyed the visual aid of watching the show along with the book because it reinforces the learnings from the book in a way where you can see the real-life impact that applying the tips from the book can have.

The show also explores the challenges money psychology can cause in marriages and single households. The show also ventures into the lives of people in varying financial situations from people struggling with investing/retirement plans to people who want to pay off their debt. The series truly shows that financial struggles come in many forms and affect us all — which makes money feel like a less taboo topic of conversation to have in your core household.

Ramit Sethi’s “I Will Teach You to Be Rich” provides a comprehensive guide to managing personal finances and living a fulfilling life. By implementing the tips outlined in this blog post (and the book), you can take control of your debt, save more effectively, invest wisely, spend consciously, and ultimately pursue a Rich Life that aligns with your values and goals. Remember, achieving financial success requires discipline, patience, and an unwavering commitment to making smart financial decisions, but it doesn’t have to be a daunting or challenging experience.