I wanted to do something new with this week’s article – a book review. Be patient with me as I haven’t done one since high school. The book is I Will Teach You To Be Rich by Ramit Sethi. This book has been around for just over a decade now. I did not hear about it until a few years ago and never picked it up because I figured it was a bit dated. However, an updated version was just released and I grabbed one. Spoiler alert – Go Get A Copy!!!
I’ve read numerous personal finance books over the years and the topics are pretty much all the same as well as the tone. There are some standouts, such as The Behavior Gap, A Wealth of Common Sense, and The Whitecoat Investor. This book is up there with that list and maybe stands slightly above because of a few key items I will cover.
The book is a self-described six-week program to get your financial life in order. There are roughly a half-dozen key topics covered ranging from optimizing credit cards to getting ready to invest. He gets into details as specific as scripts to use to negotiate rates for credit cards to how to request a raise to the holdings if you want to build out your own investment portfolio. More importantly, he gives tangible steps so you can start saving more for retirement or whatever your investment goals may be.
This latter point is what really makes this book better than others. He talks specifically about what he terms “Conscious Spending.” Most financial advice is along the lines of the Millionaire Next Door and “pack your lunch and you will be a millionaire.” I won’t even get into the topic of “skip Starbucks” as I don’t have enough time. His point with Conscious Spending is that it is okay to spend on those things you love, but be brutal on controlling the expenses of things you don’t.
For example, let’s say you love to travel. To accomplish this you will obviously save to travel, but cut costs on other things. These other things may be making coffee at home versus Starbucks. Or, cancelling your gym membership and using the one at work instead. And hold onto that car a few more years.
Another example is someone I worked with years ago. She ate out every day for lunch. I asked her once how she handled that as she did not make that much. She explained to me it was how she made it through the day, and she balanced it by not having cable at home, reading the paper at work, driving an old car, but she still maxed out her 401k. Ramit absolutely stresses to do your best to save toward retirement too, especially when it comes to getting an employer match, which is free money for you.
The other part I enjoyed with his book is his tone is very straightforward with a healthy dose of sarcasm (sounds like someone I know). For example, he makes references of how he was raised and although he does not yet have kids but he is already disappointed in them😉 But seriously, his work has landed him on the non-influencer lists at major banks like Bank of America, basically because he says most big banks suck. I think Wells Fargo has more than proved his point.
Now, there are some disagreements I have with certain recommendations in the book, but they are minor. Also, I wish he would have spent more time on insurance sales as so many young people are approached by salesmen trying to slam them into expensive insurance policies they simply do not need. This is especially true with my physician clients.
Regardless, this is a wonderful book and something I picked up a few nuggets from. See, you can teach an old dog new tricks! It is so good I ordered a bunch to give as gifts. While it may not be the world’s most exciting graduation gift, there are a few kids I know who will be getting a copy as you know what I think of the financial literacy classes taught in school (It is non-existent, in case you were wondering).
Now, you can continue to follow the “skip the Starbucks” advice dispensed from the “personal financial experts” living on their tropical islands (skipping Starbucks all your life will not buy an island) or spend $10 on this book on Amazon to pick up much more profitable tips . To me, the $10 for the book is money more than well spent. You will not be disappointed. If you are, I will spring for your Starbucks next time I see you there (hint, I don’t drink coffee so your odds are bad).