A quick, no bullshit guide to Personal Finance
Money matters. Money isn’t everything by any means, but it sure as hell is something. As a recent college graduate who just starting climbing the corporate ladder (ugh, I know), I finally have a flow of salaried income. As of this writing (November 2019), I am 3 months into this new, exciting life of sitting behind a desk for 40 hours a week. That also means my bank account gets a little boost every 2 weeks. This has caused me a lot of anxiety over the past few months: Can I afford those new Nikes that I don’t really need but really REALLY want? What’s the difference between a 401(K) and a Roth IRA? What do I do with the money I don’t spend (and more importantly, how can I make sure I actually have something leftover)? Enter the answer: I Will Teach You to Be Rich by Ramit Sethi.
(Side note: I first heard about this book through Matt D’Avella. Matt is a minimalist YouTuber who also has a great podcast. You can check out the podcast here.)
I am going to refrain from just summarizing the details of the book because (of course) Ramit does a far better job, and I highly suggest you read the book. However, I want to detail the basic concepts and the impact the book has had on me so far.
You know what? I can make it even more simple. The entire book can be summed up in two words: “Big Wins.” From page 1, Ramit draws you in with the term “Big Win,” and the rest of the book unpacks how this concept can manifest itself in many aspects of one’s financial life. It entails, to a certain extent, looking at your finance at a macro-level instead of taking a magnifying glass and scrutinizing every penny (my current, stress inducing approach). This theme proved to be my biggest takeaway from this body of work. From credit cards debt to negotiating your salary to planning a wedding (what…), Ramit carries this notion of setting a goal, achieving it, and then forgetting about it. Gone are the days of, as he puts it, of giving up lattes to save a couple bucks here and there. Guess what? That $4 bucks you saved today will actually amount to nothing in the long term (except for maybe reducing your addiction to the sweet, sweet pick me-up of a mornin’ cuppa Joe). Investing in your 401(k), automating your finances to invest in index funds, and setting a savings goal and working towards it, now that is looking at the big picture and at the long term. A “Big Win!”
Seriously, this book will get you on track, but it also takes the load off your back (wow, that rhymed). Each chapter is peppered with anecdotes from Ramit (in a separate green section), and though they prove a bit distracting from the main text, they corroborate his narrative. Ramit (and my friend Google) clarified so many doubts I had about investing my money. He tells you how to automate that aspect of your life in a way that you don’t even see the money come into your bank account! He also gives you advice on how to negotiate for a raise or a promotion, how to buy a car, and how to set up an HSA. It’s not an econ textbook in any sense of the word, so you will be spared graphs and the intricate semantics of the stock market. Instead, the reader is treated to a very broad, foundational explanation of personal finance. Some tables and numbers do make an appearance, but they serve a critical purpose. Otherwise, the boring stuff is left to the textbooks.
Yes, I already knew a lot of this information, and yes, you can easily Google most of it. The difference is Ramit makes it approachable. The title says “No BS”, and he means it. He gives it to you straight: tough love, don’t make excuses. He also strays away from being pedantic and conveys his ideas in an almost “bro” way. However, he always has data to back up his claims, so you know he isn’t here to mess around and make baseless claims. As a Gen Z, it was refreshing to receive personal finance advice in an almost humorous, cut out the bullshit fashion. Juxtapose this to the dry, factual tone of Investopedia (which I still love) and the admonishing pitch of my Indian parents , I Will Teach You to Be Rich makes adulting digestible and…dare I say, fun?
So how has my life changed since I read this book? I used to take a deep dive into an Excel spreadsheet and track my spending from every possible source (yes, Venmo included). Am I going to stop doing this? No. Huh, then why did I waste your time with this review? Hear me out. I want to track my spending. In fact, Ramit encourages you to do so (but he hates the term “budgeting”). I want to know where my money goes. How much am I eating out? How much did I spend on those Nikes I didn’t need? How much did I spend on Hazy IPAs (Portland is fun y’all)? But here’s the thing: I am not going to sweat it because I know I already invested my hard earned dollar in retirement and stock market accounts. I know I am working towards a savings goal, I am avoiding useless fees, and actively growing my assets. This book is the perfect balance of the two irreconcilable voices in my head: that of my parents imploring me to save every dollar and get the best deal (Indian parents, am I right?) and my own desire to live a little. Ramit (if you can’t tell by now is an Indian dude) went through this too, and he finds a way to masterfully walk the line between these two conflicting views with ease. Yes, save your money. Save, save, save for a rainy day or for your retirement. Yes, spend your money. Spend it on lattes or a vacation or gifts or giving back to your community.
Bottom line: Money matters. Money isn’t everything by any means, but it sure as hell is something. That doesn’t mean it has to control your life. Focus on your “Big Wins” and move on, damnit.