Very useful advice about paying down debt and saving money
I am going to be a wealthier individual than I am now; at least, that’s the prediction that I made when checking out a book at the library. The book, titled “I Will Teach You To Be Rich” by Ramit Sethi seems more useful because the book isn’t written by a Donald Trump or Warren Buffet, but by someone who had a good job and invested his money well.
Am I convinced that all of the strategies in the book will work?
I have to admit that I’m sold on the strategies employed by the writer. In part, because I want to save you money on the book, are the strategies recommended by Ramit Sethii.
- First, pay off your credit card debt. Obviously, this is not a new strategy, but Ramit Sethi gives concrete advice for doing so. The idea is to NOT transfer your balances, NOT use your credit cards for expenses you can’t pay off, and to pay more than the minimum payment each month. The hard part is avoiding the expenditures that you can’t afford.
- Second, use the banks to your advantage. I’m not as convinced on this particular method. Ramit Sethi manages several bank accounts and has a complex system which involves the use of three or four banks for his expenditures each month. If you are alert and are calculating the interest at each bank on a daily basis, this might be a good strategy, but if you are at all like me, you want to keep things as simple as possible.
- Third, invest your money. Ramit Sethi recommends investing a small amount of money and goes into great detail about the best ways to get the most bang for your buck. The chapter includes advice about matching 401Ks. To his credit, he does admit that some of his advice regarding investments may not apply to everyone because of the lower wages that some have.
- Fourth, watch your spending habits. As I said before, this is the hardest part. It means paying attention to how much money you spend for each of these four categories: fixed costs, investments, savings and guilt-free spending money. Ramit Sethi advises cutting down on as many of the discretionary costs as you can. Instead of keeping a gym membership, work out outside, at home, or on a per-day basis. Instead having cable, watch episodes on the Internet for a smaller fee. He also started a savings challenge, which can be found on www.iwillteachyoutoberich.com/30daychallenge
- Fifth, link your accounts for a flow. Ramit Sethi recommends linking your various accounts together so that you can save yourself time and money.
- Finally, Ramit Sethi discusses strategies for stock investments. Since his book was written in 2009, I can’t confirm whether or not his information is still current.
All in all, “I Will Teach You to Be Rich” is a worthwhile book for anyone needing solid financial advice.