I Will Teach You To Be Rich: No guilt, no excuses - just a 6-week programme that works

by Ramit Sethi

Rung 1: Your employer must offer matched pension contributions on your workplace scheme, so take full advantage of it and don’t opt out (which you can). This means that for every pound you contribute to your pension, your company will “match” your contribution up to a certain amount. For example, for easy maths, let’s assume you make £100,000 and that your employer will 100%-match your contribution up to 8% of your salary. This means that you’ll contribute £4,000 and your company will match it with £4,000. This is free money and there is, quite simply, no better deal. Rung 2: Pay off your credit card and any other debt. The average credit card APR is 14% and many APRs are higher. Whatever your card company charges, paying off your debt will give you a significant instant return. For the best ways to do this, see page 62 in Chapter 1. Rung 3: Open up a stocks and shares ISA (see page 109) and contribute as much money as possible to it. (You are allowed to contribute up to £20,000 in 2019/20. For current contribution limits, search for “ISA allowance”.) Rung 4: If you have money left over, go back to your pension and contribute as much as possible to it (this time above and beyond your employer matched contributions). The current limit is 100% of your salary or £40,000 – whichever is the lower. For current contribution limits, search for “pension contribution limits”. Rung 5: If you still have money left to invest, pay extra on any mortgage debt you have and consider investi...