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4 Life-Changing Ideas About Money

Ramit Sethi lists his favourite approaches to money:

Behavior trumps information. Knowing the perfect right answer is less important than taking action. Focus on small, innocuous behaviors. Like saving small every month.
Focus on getting things 85% right. You don’t need to get it perfect. But act.
Spend on what you love. Cut back on what you don’t. If you love something, spend money (or time) on it. If it’s not important, don’t.
There are 2 ways to get more money. First, you can earn more. Second, you can spend less. Cutting costs is great, but you can't become rich through savings alone.

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MORE IDEAS ON THIS

Anyone Can Become Rich

This is the main premise of the best selling book by Ramit Sethi. He structures his ideas into 4 buckets:

Track your spending. This will help you see where your money is going and identify areas where you can cut back.
Set financial goals

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Week 5: Automate Everything

Use this schedule to help you set up your own automation:

If you’re paid on the 1st of the month. Switch all bills to arrive on or around that time, too.

5th of the month. Set up an automatic transfer to your savings account and to your Roth IRA.
...

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Your Six Week Plan To Become Rich

Do this to get on a path to becoming rich:

Optimize Your Credit Cards
Open high-interest, low-maintenance bank accounts
Open Investing Accounts
Start Your Conscious Spending Plan

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Week 4: Start Your Conscious Spending Plan

Use a tracking tool to see where your money is going. (e.g. Mint) Don’t just go and “create a budget”.

Choose the things you love enough to spend on— and then cut costs on the things you don’t love. This leads to a happy, rich life, not living a life of frugality for no rea...

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Week 6: Start Investing

Invest in index funds not individual stocks. Put your own behavioral psychology to work here. Invest automatically and over long periods of time.

Once you’ve covered the basics (aka index funds), allocate 5-7% of your income to “mental outlets.” This is money for you to inv...

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Week 2: Open high-interest, low-maintenance bank accounts

Open a no-fee online bank account (e.g. Ally, Capital One). Avoid brick n’ mortars banks

The problem with brick n’ mortar banks (e.g. Bank of America) is they need minimum balances to avoid fees. For example, Bank of America’s “free” checking account requires a minimum $1,5...

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Week 1: Optimize Your Credit Cards

A great place to start because it can have a big impact on your finances:

Set up autopay to pay your CC bills
Call to waive any past credit card fees
Negotiate a lower APR
Build credit history by keeping credit lines open
Increased your credit allowance

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“Spend extravagantly on the things you love, and cut costs mercilessly on the things you don’t.”

RAMIT SETHI

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Week 3: Open 2 Investing Accounts

Open:

a 401(K) account
a regular investment account.

If your employer offers a 401(k) match, invest to take full advantage of it. Contribute enough to get 100 percent of the match.
Pay off debts. This give you a significant instant return.

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CURATED FROM

I Will Teach You To Be Rich

by Ramit Sethi

10 ideas

50.8K reads

IDEAS CURATED BY

Valerie

@val_q

"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." ~ Warren Buffett

The book behind the Netflix show

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