Table of Contents
It’s one of those rare books where the content is not indicative of the hack title. I’m not really sure why Ramit chose to name his book I Will Teach You To Be Rich. It’s not exactly the kind of title that inspires confidence in the legitimacy of the content, but somehow it works. And I think it worked because of what was inside the book. A straight to the point, short, manual for how to get started on managing your personal finance for people who aren’t well-read on these subjects.
The Argument for Starting Young
Ramit shows us how important it is to start investing when you’re young. The earlier you start, the better. And he touches on a really important point. Young people are psychologically intimidated by the whole idea of investing their money. They think it’s for people who are wealthy, and what do they know about stocks anyway? But the book lays out practical ways for anyone to get started regardless of how much money they’re making. And the important thing is to rid yourself of the mentality that you need to be perfect from the get go. In all likelihood, you’re going to mess up, but it’s better to make some progress than no progress at all.
Don’t Listen to the Hacks, Play the Long Game
Another point I liked and completely agree with is to avoid chasing after fads. It seems that there’s always the “hottest” new thing to invest in that’s going to cure your financial woes. And there’s no shortage of people who are willing to give you their two cents, for free. It’s no wonder, those hand waving, overenthusiastic talking heads don’t have much going on between their ears and they’re likely going to lead you into a hard crash if you listen for long enough. Nassim Taleb makes a great point about this in The Black Swan. Ramit’s point is to play the long, boring game. Historically, holding a stock and gradually increasing your investments over the lung run is far more likely to be a winning strategy than trying to perfectly time your investments futilely.
The Trade-offs of Investing
He’ll neatly summarize that different ways you can choose to invest your money. Either you want full control over your investments and are willing to sacrifice convenience, or you’d rather forget about your investments but sacrifice control. It depends on how active you want to be, and how confident you are with your financial knowledge. The important thing to remember here is you have options. If you’re someone who already has a lot to think about, it’s probably a better idea to leave the minutiae of your investments to people who know what they’re doing. That, in many cases, can be good enough.
Detailed Advice
The other good thing about the book is that it gives you detailed advice on how to negotiate better deals with banks, and how to live more affordably without sacrificing the things that matter to you. Ramit doesn’t spare any detail and being someone who’s had to deal with these things personally, he offers you the advice like an older brother who’s really trying to look out for you.
Ramit oversells. Anyone who promises to make you rich is missing a part of the picture, or they are purposefully trying to deceive people. But I don’t think he does a good job in telling the other side of the story. It might be a better idea to invest that extra ten dollars a week in sustaining your self while you build a business instead of investing it to make a few extra pennies ten years later. There is a caveat to trying to invest pennies today and an opportunity cost in terms of time and energy. However, it’s a smart, short introduction to personal finance, and Ramit’s style is engaging and funny enough to keep you going.