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

by Ramit Sethi

abundance of information can lead to decision paralysis,

The single most important thing you can do to be rich is to start early.

So many people complain about politicians and sociological problems without looking around at their own behavior.

If you want to be a passenger in life, fine—go with the flow.

Cynics don’t want results; they want an excuse to not take action.

getting your financial life in order does require some work. But the rewards far surpass the effort.

people who fear “being average” do exactly the things that make them perform worse than average:

In relationships and work, we want to be better than average. In investing, average is great.

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.

If you’re booking travel or eating out, use a travel card to maximize rewards. For everything else, use a cash back card.

credit cards offer excellent consumer protection. This is one reason I encourage everyone to make major purchases on their credit card

The key to using credit cards effectively is to pay off your credit card in full every month.

Your checking account is the backbone of your financial system. It’s where your money will first go before it’s “filtered” to different parts of your system, like your savings account, your investing account, and your guilt-free spending.

Don’t worry about micro-optimizing your bank account interest rates. Just pick great bank accounts and move on.

two different accounts at two separate banks.

it’s not just about your immediate earnings—it’s about developing the right habits.

Build the right habits when the amounts are small—with the right accounts, with automatic saving and investing—so that when your income increases, your habits are rock-solid.

free brokerage trades (which you should avoid, since banks are the last place you should invest),

when choosing your bank(s). I look for three things: trust, convenience, and features.

fee, no-minimum account at first, but if you’re firm, they’ll give you the account you want. If they don’t, find another bank. There are many, many choices, and it’s a buyer’s market.

I’d rather take a slightly lower interest rate if it’s at a bank I can trust to give me great service over the long term.

would not encourage anyone to use a standard Big Bank savings account.

“Polls show that most older people are more worried about running out of money than dying.”

People have peculiar beliefs about risk. We worry about dying from a shark bite (when we should really worry about heart disease).

Data clearly indicates that the average investor buys high, sells low, and trades frequently

more is lost from indecision than bad decisions.

There is power in saying no to the things we don’t care about. But there is even more power in saying a big YES to the things we love.

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

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

have a plan. Instead of getting caught on a spending treadmill of new phones, new cars, new vacations, and new everything, they plan to spend on what’s important to them and save on the rest.

Conscious Spending Plan involves four major buckets where your money will go: fixed costs, investments, savings, and guilt-free spending money.

A good rule of thumb is to invest 10 percent of your take-home pay

You already know you’re going to buy Christmas gifts every December! Plan for it in January.

Regardless of exactly what you’re saving for, a good rule of thumb is to save 5 to 10 percent of your take-home pay to meet your goals.

use 20 percent to 35 percent of your take-home income for guilt-free spending money.

Do you know people who get so obsessed with something new that they go completely overboard and burn out? I would rather do less but make it sustainable.

when a person goes from one extreme to another, the behavioral change rarely lasts.

I’d rather have people cut their spending by 10 percent and sustain it for thirty years than cut 50 percent for just a month.

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

break your 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).

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

“Show me someone’s calendar and their spending, and I’ll show you their priorities.”

You can have the fanciest degrees from the fanciest schools, but if you can’t perform what you were hired to do, your expertise is meaningless.

The only long-term solution is to invest regularly, putting as much money as possible into low-cost, diversified funds, even in an economic downturn.

idea of Morningstar’s five-star ratings is actually complete nonsense.

Just because a company assigns five shiny stars to a fund does not mean it will perform well in the future.

If you discover that your adviser is not a fiduciary, you should switch.

You should ideally be paying 0.1 to 0.3 percent.

Index funds have lower fees than mutual funds, because there’s no expensive staff to pay.