Reading Corner: A Review of I Will Teach You to Be Rich
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Do you ever come across something that sounds a bit cheesy but turns out to be pretty awesome? Today I want to talk about the personal finance book I Will Teach You to Be Rich by Ramit Sethi. The cheesy part is the title because, first of all, who says they’ll teach you to be rich? It’s such a bold statement. You might also wonder, “Who is this guy and what does he know about being rich?” Despite the title, this personal finance book does turn out to be a fun and educational read.
If you aren’t familiar with Sethi, he is an entrepreneur, personal finance advisor, and author. He started the website I Will Teach You to Be Rich to provide people practical advice to live all-around richer lives. I’ve read his blog on occasion over the past few years and have benefited from his insight. You should see his advice on how to negotiate a better deal on everything (e.g., a salary raise, lower credit card fees, etc.). So when I came across his book at the library, I swooped it up to see what more he has to say.
I Will Teach You to Be Rich (IWTYTBR) is a comprehensive guide to financial basics. One of the best things about it is that Sethi provides a 6-week plan to set up your finances. The plan is reasonable in terms of actions to complete and time involved.
Set up the best credit card for you
Set up a high-interest bank account
Open an investment account
Figure out your spending and take control of it
Automate your accounts
Each of the six weeks is covered in one or more chapters and comes with clearly defined action steps to complete the task.
What else is good about the book? It’s written in a more relaxed, casual tone, which makes it easy to read. For example, he compares being rich to being fit. Just about everyone knows the basics of fitness – eating less and moving more. Getting rich is similarly about spending less than you earn. He profiles people he knows and provides a few examples from his own life. All of that makes reading the book feel like having a conversation with a good buddy.
It’s aimed towards young adults but the information is beneficial for anyone of any age who needs help with financial basics. For example, in the chapter on setting up credit cards, he covers information such as credit report versus credit score, what is considered a good score, credit card commandments like always paying off your credit card on time, and negotiating fee waiving (script included). Information is easy to read and digestible due to numbered, bulleted, or highlighted sections.
It’s comprehensive for the young adult. The book covers creating a budget, which Sethi calls a Conscious Spending Plan. He also covers the basics of investing, checking and savings accounts, having the money talk with a partner, buying a first car, and saving for a wedding.
Who is the target audience of this book?
This book isn’t for the financial expert. It’s written for the young adult just starting out seriously handing his or her finances. This is the demographic Sethi’s targets on his website to some extent, so it makes sense that his book would follow that direction. I don’t fault him either as every book needs a target audience. It wouldn’t make sense for him to talk about creating your first budget in one chapter, then providing retirement advice in the next. So if you already have basic financial knowledge and find yourself in a good financial state, you’ll likely already know the information in the book.
This isn’t for people who want to get rich quick. There’s no get-rich-quick scheme provided in this book, even if that’s what the title may imply. Sethi lays down financial basics such as keeping a budget and investing, which are needed to become rich or wealthy one day. I also want to point out that Sethi promotes being rich as living a fulfilling life rather than amassing tons of money.
Finally, the book was written in 2009 so not all the information is relevant. Since some of the information is outdated, you’ll have to do research to verify some of the facts and figures. It’s also good to remember that this is only one person’s advice and not all of it may not apply to you (e.g., his views on renting versus buying a home). That said, there’s more to learn from this book than to keep one from reading it.
Bottom line: I Will Teach You to Be Rich is a great read for the financial novice.
Have you read IWTYTBR? What are some books you would recommend for the financial beginner?