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

by Ramit Sethi

People love to argue minor points, partially because they feel it absolves them from actually having to do anything.

The single most important factor to getting rich is getting started, not being the smartest person in the room.

Spend extravagantly on the things you love and cut costs mercilessly on the things you don’t.

Sometimes the most advanced thing you can do is the basics, consistently.

Basic option + small optimization (recommended for most people): This option means opening accounts at two separate institutions: a no-fee checking account at your local bank and a high-yield online savings account. With the checking account, you’ll have immediate access to your money and free cash transfers to your high-interest online savings account. You can also deposit cash through your local bank. If you already have this setup, great! Just call to make sure you’re not paying unnecessary fees.

Schwab Bank Investor Checking with Schwab One Brokerage Account (schwab.com/banking): This

Capital One 360 Savings (capitalone.com/bank): This is the savings account

Unfortunately, most Americans were never taught how to consciously spend, which means cutting costs mercilessly on the things you don’t love, but spending extravagantly on the things you do.

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

Categories of Spending Fixed costs Rent, utilities, debt, etc. 50–60% of take-home pay Investments 401(k), Roth IRA, etc. 10% Savings goals Vacations, gifts, house down payment, emergency fund, etc. 5–10% Guilt-free spending money Dining out, drinking, movies, clothes, shoes, etc.

Fixed costs are the amounts you must pay, like your rent/mortgage, utilities, cell phone, and student loans. A good rule of thumb is that fixed costs should be 50 to 60 percent of your take-home pay. Before you can do anything else, you’ve got to figure out how much these add up to. You’d think it would be easy to figure this out, right?

1. Retirement savings (10 percent) 2. Long-term savings (10 percent) 3. Short-term savings for irregular expenses (10 percent) 4. Fun money (10 percent)

a good rule of thumb is to save 5 to 10 percent of your take-home pay to meet your goals.

a good rule of thumb here is to use 20 percent to 35 percent of your take-home income for guilt-free spending money.

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(youneedabudget.com)

Use the Envelope System to Target Your Big Wins

the envelope system, in which you allocate money for certain categories like eating out, shopping, rent, and so on. Once you spend the money for that month, that’s it: You can’t spend more. If it’s really an emergency, you can dip into other envelopes—like your “eating out” envelope—but you’ll have to cut back until you replenish that envelope. These “envelopes” can be figurative (like in YNAB or even Excel) or literally envelopes that you put cash in.

1. Decide how much you want to spend in major categories each month. (Not sure? Start with one: Eating out.) 2. Put money in each envelope (category). 3. You can transfer from one envelope to another . . . . . . but when the envelopes are empty, that’s it for the month.

Three to six months before your review: Become a top performer by collaboratively setting expectations with your boss, then exceeding those expectations in every way possible. One to two months before your review: Prepare a “briefcase” of evidence to support the exact reasons why you should be given a raise.

One to two weeks before your review: Extensively practice the conversation you’ll have with your boss, experimenting with the right tactics and scripts. Three to six months before you ask for a raise, sit down with your boss and ask what it would take to be a top performer at your company. Get crystal clear about what you’d need to deliver. And ask how being a top performer would affect your compensation.

Hi Boss, How are you? Hope you had a great New Year’s! I’m really excited to kick things off this year, especially with our new X and Y projects coming up. I really want to do an exceptional job, and I’d like to chat with you for a few minutes about how I can be a top performer. I have some ideas of my own, but I’d love to get your guidance as well. Would a 15-minute chat next week be okay? If so, how about I swing by your desk Monday morning

To find your annual salary, just take your hourly rate, double it, and add three zeros to the end. If you make $20/hour, you make approximately $40,000/year. If you make $30/hour, you make approximately $60,000/year. This also works in reverse. To find your hourly rate, divide your salary by two and drop the three zeros. So $50,000/year becomes approximately $25/hour.

upwork.com.

take-home income into chunks of fixed costs (50–60 percent), long-term investments (10 percent), savings goals (5–10 percent), and guilt-free spending money (20–35 percent). How does it fit?

Optimize your spending (two hours). Dig deeper into your savings goals and monthly fixed costs. Try the À La Carte Method.

Break these expenses down into monthly chunks, then recalculate your plan.

Pick your Big Wins (five hours). Open an account at You Need a Budget or Personal Capital. Assuming you want to cut your spending by $200/month, what one or two Big Wins will you target? Start using the envelope system.

Maintain your Conscious Spending Plan (one hour per week). Enter any cash receipts into your system each week. Tweak the percentages you send to each part of your spending plan (we’ll cover this in detail in the next chapter). And most important, make sure your system is realistic enough that you’ll stick with it for the long term.