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.

Barry Schwartz writes about this in The Paradox of Choice: Why More Is Less:

Before you go further, I encourage you to think about your Rich Life. Why do you want to be rich? What do you want to do with your wealth?

$10,000 furniture 32 years, 2 months $13,332.06 Assumes 14% APR and 2% minimum payment If you paid only the minimum monthly balance on your $10,000 purchase, it would take you more than 32 years and cost you more than $13,000 in interest alone, more than the purchase price itself. Remember, this doesn’t even factor in your “opportunity cost”: Instead of paying off a $10,000 sofa for over 30 years, if you’d invested the same amount and earned 8 percent, it would’ve turned into about $27,000! Try calculating how much your own purchases really cost at bankrate.com/brm/calc/minpayment.asp. Getting a New Card How do you choose the right credit card? I have a few simple rules that I use when choosing my own cards: ■ Don’t accept credit card offers that come in the mail or from retail stores like Gap or Nordstrom. ■ Squeeze every reward you can out of your credit cards. ■ Pick a good one, then move on with your life.

Imagine a pie chart that represents the money you earn every year. If you could wave a magic wand and divide that pie into the things you need and want to spend your money on, what would it look like? Don’t worry about the exact percentages. Just think about the major categories: rent, food, transportation, maybe student loans. What about savings and investing?

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

By the way, while you’re logged in to your credit card account, also set up an email notification (this is typically under “Notifications” or “Bills”) to send you a monthly link to your bill, so you can review it before the money is automatically transferred out of your checking account. This is helpful in case your bill unexpectedly exceeds the amount available in your checking account—that way you can adjust the amount you pay that month.

Here are three money columnists and one forum that I love. Morgan Housel writes one of the most interesting blogs on psychology and money out there. Read his posts to understand why you do what you do (and why the herd does what it does). collaborativefund.com/blog Dan Solin, author of a number of great investing books, writes a terrific newsletter where he names names and calls out the BS of the investing industry. Here are a few topics he’s tackled: “Cracks in the Robo-Advisor Facade,” “Active Fund Managers Are Losers,” and “Find the Courage to Be ‘Different.’ ” danielsolin.com Ron Lieber writes the Your Money column for the New York Times. I love the variety of topics he tackles, and he’s always pro-consumer. ronlieber.com Finally, I love the Bogleheads forum, where you can find good investing advice. They’ll steer you clear of scams and fads and refocus you on low-cost, long-term investing. bogleheads.org/forum

Stocks (“Equities”) 30 percent—Total Market Index/equities (VTSMX) 20 percent—Total International Stock Index/equities (VGTSX) 20 percent—REIT index/equities (VGSIX) Bonds 5 percent—Short-Term Treasury Index Fund (VSBSX) 5 percent—Intermediate-Term Treasury Index Fund (VSIGX) 5 percent—Long-Term Treasury Index Fund (VLGSX) 15 percent— Short-Term Inflation-Protected Securities Index Fund (VTAPX) These are just a few of the literally thousands of index funds that exist. You can be flexible with the funds. If you want to be more or less aggressive, you can change the allocation to match your risk tolerance. For example,