My Personal Finance Mentor

When I started earning regular money in my first job out of school I quickly came to the realization my textbook finance knowledge wasn’t going to help much in managing my personal finances.

Modern portfolio theory, asset allocation, and diversification are great and all but portfolio management doesn’t matter if you can’t manage your household finances or don’t have any money saved.

I’ve always been a saver but knew next to nothing about banking, credit cards, budgeting, spending or managing my financial life.

I read a number of personal finance books but none of them resonated because the authors made it feel like I was getting advice from my teachers in high school. The advice felt old and stodgy.

Around 2006 or so I stumbled across the blog I Will Teach You To Be Rich. It was written by someone my age, speaking about topics that were relevant to me and my peers, and the tone made it easy to relate to.

I was hooked on Ramit Sethi’s message right away. Then in March of 2009, he released a book by the same name as the blog that solidified many of the personal finance ideas I had been slowly putting into practice.

Ramit helped me go about building a comprehensive financial system — automating my saving, prioritizing my spending, and improving my earning potential.

Over the years, I’ve given out or recommended Ramit’s book to dozens of college graduates, young professionals, or people who needed to get their finances in order but didn’t know where to begin.

Ramit just released the 10th anniversary updated edition of I Will Teach You To Be Rich. I’ve now read both copies and the updates to the new book are worth the price of admission.

Michael, Josh, and I got a chance to sit down with Ramit in NYC this week to discuss the book and how he approaches helping people get their financial lives in order.

This was so much fun:

We discussed:

  • Why psychology and systems are way more important than spreadsheets when getting your finances in order.
  • Why most financial advice doesn’t work.
  • Why money makes people feel bad about themselves.
  • How Ramit goes through 2,000 (!) emails a day.
  • How to spot a lunatic by how they email.
  • How to avoid the victim culture in regards to your career and finances.
  • Why luck always plays a factor in your finances.
  • Ramit’s thoughts on the FIRE movement.
  • The problem with living in the spreadsheet.
  • Why people would rather dream than take action.
  • Why people should be asking $30,000 questions and avoid $3 questions.
  • How people can better prepare for a recession.
  • Why a systems mentality is so important.
  • Why budgeting is the worst word in the history of the world.
  • Building a conscious spending plan.
  • What are some areas of our lives where we love spending money on?
  • Understanding your money dials.
  • What does Ramit love spending money on?

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