I Will Teach You to Be Rich: No Guilt. No Excuses. No B.S. Just a 6-Week Program That Works.

by Ramit Sethi

Everybody talks about how to save money, but nobody teaches you how to spend it.

choosing the things you love enough to spend extravagantly on—and then cutting costs mercilessly on the things you don’t love.

It’s about making your own decisions about what’s important enough to spend a lot on and what’s not, rather than blindly spending on everything.

Conscious spenders care about the value of something.

Conscious spenders try to get the lowest price on most things but are willing to spend extravagantly on items they really care about.

Conscious spenders know they have to pick and choose where they spend their money. If they can spend only $10 on lunch, they’ll order water instead of iced tea.

Conscious spending means you decide exactly where you’re going to spend your money—for going out, for saving, for investing, for rent—and you free yourself from feeling guilty about your spending.

People who spent money to buy themselves time, such as by outsourcing disliked tasks, reported greater overall life satisfaction.”

You’re probably overpaying already. Most of us dramatically overestimate how much value we get from subscriptions.

You’re forced to be conscious about your spending.

they plan to spend on what’s important to them and save on the rest.

fixed costs, investments, savings, and guilt-free spending money.

a Rich Life includes preparing for predictable expenses so they don't surprise me. Planning ahead isn’t “weird,” it’s smart. You

Guilt-Free Spending Money After all that spending, investing, and saving, this bucket contains the fun money—the stuff you can use for anything you want, guilt-free. Money here covers things like restaurants and bars, taxis, movies, and vacations.

“Let’s take it slow.”

Habits don’t change overnight, and if they do, chances are they won’t be sustainable.

In this way, time is your friend, because each month gets better than the one before it, and it adds up to a lot in the end.

There’s a limit to how much you can cut, but no limit to how much you can earn.

Remember that getting a raise is not about you. It’s about you demonstrating your value to your employer.

You can’t tell them you need more money because your expenses are higher. Nobody cares. You can, however, show how your work has been contributing to the company’s success and ask to be compensated fairly.

You’ve made it clear what you want: to be a top performer. You’ve enlisted your boss’s help on getting specific about what that means.

If you don’t, ask your boss what you can do to excel in your career, or consider leaving to find another company that will give you greater room to grow.

Think about what skills or interests you have that others could use.

You’ll always have unexpected cash expenses,

I recommend starting by allocating $50/month for unexpected expenses. You’ll soon realize that this cartoonishly low figure is not enough.

It’s okay to increase your standard of living a little—but bank the rest.

Get your paycheck, determine what you’ve been spending, and figure out what your Conscious Spending Plan should look like (thirty minutes).

That’s because automating your money will be the single most profitable system you ever build.

how much you want to spend in each category (fixed costs, investments, savings goals, and guilt-free spending money).

By investing a little now, we don’t have to invest a lot later.

Your money management must happen by default.

I hope I’ve convinced you by now that automation is the way to go.

Start now and build the habit. As your income increases, your habits will be aligned and your system will automatically grow with you.

Remember, you’re treating your checking account like your email inbox—first, everything goes there, then it’s filtered away to the appropriate place.

This is the bare minimum: rent, utilities, food, loan payments—just the basics.

Once you’ve saved up three months of money as a cushion, congratulations! (To go the extra mile, work toward a six-month emergency fund.) You’ve built a stable buffer and you can simulate a stable income.

Money exists for a reason—to let you do what you want to do.

If you invest in yourself, the potential return is limitless.

Saving too much is a good problem to have. Fortunately, there are great solutions too.

When I got married, I sat down with my wife and we decided on the key things that were important to us.

in particular, fund managers and anyone who attempts to predict the market—are often no better at the job than amateurs. In fact, they’re often worse.

that you control exactly what happens to you and your money over the long term.

term. Unfortunately, the fact is that nobody can predict where the market is going.

In fact, the financial industry—including both companies that administer mutual funds and so-called experts—are sneakier than you’d imagine.

The key takeaway is that most people don’t actually need a financial adviser—you can do it all on your own and come out ahead.

If you don’t learn to manage your money in your twenties, you’ll cost yourself a ton one way or another—whether

The big difference is in fees: Index funds have lower fees than mutual funds, because there’s no expensive staff to pay.

This is why I’m so fanatical about reducing fees. In investing, fees are your enemy.

Investors, both individual and institutional, and particularly 401(k) plans, would be far better served by investing in passive or passively managed funds than in trying to pick more expensive active managers who purport to be able to beat the markets.”

Don’t wish it was easier, wish you were better. Don’t wish for less problems, wish for more skills.”