The financial world made fun
By Jack Anderson on February 20, 2019
This book is very well-known among personal finance section. I think this is mostly because of its perfect title. "I will teach you to be rich." There is no proposal, nor question. It's an affirmative fact. So, why not spending $13.95 on it, right?
I immediately liked the friendly and fun style from author Ramit Sethi. Contrary to some douchebags, Ramit is not taking himself seriously and thinking he's having a brilliant mind. On the contrary, I liked his very honest and humble writing.
Let's be honest, do people want to read books about finance? Well, not many. I'm sure reading a thriller or horror story is more appealing than reading about lifecycle funds, dollar-cost averaging or ETFs.
So, the tour de force from Ramit is that he was able to make the financial world interesting. I wouldn't say the book is filled with jokes, but at least there is a clear sense of lightness and joyful message that comes out of it.
What I did not like though, was the six-week program concept, as if it was a fitness book. So, on week one, you optimize your credit cards. Then after a week, you take care of your bank accounts, etc. This felt a bit too childish for me. But this is just a minor thing and a preference on my part more than anything else.
But this book is aimed to beginners. And most people are actually beginners. Most people suck at managing money. They overspend, buy new SUVs when they should buy used compact cars and don't invest because of fear.
Oh, and the mundane quotes from unknown people are really redundant and not powerful.
For the first time, I'll do a full review and will go through each chapter.
Chapter 1: Optimize Your Credit Cards
If you are not living in a country with credit score, then you can skip this chapter entirely.
Chapter 2: Beat the Banks
Get both a checking and a saving account. End of story.
Chapter 3: Get Ready to Invest
Maximize your retirement accounts, namely your 401(k) and Roth: IRA. Focused solely on US.
Chapter 4: Conscious Spending
I liked this chapter, focusing on creating a spending plan instead of an over-engineered budget that you'll never follow.
Chapter 5: Save While Sleeping
Automate your system. Okay...
Chapter 6: The Myth of Financial Expertise
This is to me the best chapter of the book so far, Ramit makes a great case against mutual funds, stating that they usually fail to beat the market and have huge costs. He backs it up with actual data and strongly advise to avoid active management of stocks (mutual funds) but go towards passing management, such as index funds. This may seems totally counter-productive, as we have been trained with so many films and by the media to proactively pick stocks. What if all of this served nothing at all? This is once again a moment where we can see the Matrix and walk behind the curtain.
I loved that chapter.
Chapter 7: Investing Isn't Only for Rich People
Just top notch! Ramit goes into the details on how to invest and this was also one of my favorite chapters. Because who wants to learn that savings is good and that credit cards are bad? But here, the author goes much beyond the obviousness and opens the door to true investing.
Chapter 8: Easy Maintenance
Nothing to add.
Chapter 9: A Rich Life
Nothing to add.
One important point is that Ramit is strongly against Real Estate.