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

by Ramit Sethi

And your college degree was almost certainly worth it—even if you’re only considering the financial return on investment and not including the benefits of making lifelong friends, building priceless habits of discipline, and exposing yourself to new ideas as an educated citizen.

Lots of people use Credit Karma (creditkarma.com) to get a free credit score, but I prefer the official credit score from MyFico (myfico.com), which is more accurate even though it has a small fee.

(Sidenote: If you find yourself getting a ton of credit card offers and other junk mail, go to optoutprescreen.com to get off their marketing lists.) I forgot to pay a stupid

Trip-cancellation insurance: If you book tickets for a vacation and then get sick and can’t travel, your airline will charge you hefty fees to rebook your ticket. Just call your credit card and ask for the trip-cancellation insurance to kick in, and they’ll cover those change fees—usually between $3,000 to $10,000 per trip.

there are restrictions on how much you can contribute to a Roth IRA (and over a certain income, you’re not eligible to open one at all).

The truth is that an HSA can be an incredibly powerful investment account because you can contribute tax-free money, take a tax deduction, and then grow it tax-free—it’s a triple whammy. If you use this account correctly, you will earn hundreds of thousands of dollars.

Then there are people who clean the bone so thoroughly, flawlessly ridding it of every last shred of meat and marrow, that you can conclude only two things: They will be stellar successes in all aspects of life, and they must be from another country.

To get more prescriptive about your spending, I recommend using a piece of software called You Need a Budget (youneedabudget.com) or YNAB (I know, the name is ironic in this chapter

I don’t know about you, but I plan to do less and less work as I go through my life.

Putnam Investments studied the performance of the S&P 500 over fifteen years, during which time the annualized return was 7.7 percent. They noted something amazing: During that fifteen-year period, if you missed the ten best days of investing (the days where the stock market gained the most points), your return would have dropped from 7.7 percent to 2.96 percent. And if you missed the thirty best days, your returns would have dropped to -2.47 percent—negative returns!

DID YOU KNOW THAT OVER TIME A 1 PERCENT FEE CAN REDUCE YOUR RETURNS BY AROUND 30 PERCENT?

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

Index funds set a lower bar: No experts. No attempts to beat the market. Just a computer that automatically attempts to match the index and keep costs low for you. Index funds are the financial equivalent of “If you can’t beat ’em, join ’em.”

managers use fancy analysis and data, and they trade frequently. Ironically, this results in lots of taxes and trading fees,

The Rule of 72 is a fast trick you can do to figure out how long it will take to double your money. Here’s how it works: Divide the number 72 by the return rate you’re getting, and you’ll have the number of years you must invest in order to double your money. (For the math geeks among us, here’s the equation: 72 ÷ return rate = number of years.) For example, if you’re getting a 10 percent return rate from an index fund, it would take you a little more than seven years (72 divided by 10) to double

I also highly recommend using Fighting Chance (fightingchance.com), an information service for car buyers,

The easiest way to see if you should rent or buy is to use the New York Times’s excellent online calculator “Is It Better to Rent or Buy?” It will factor in maintenance, renovations, capital gains, the costs of buying and selling, inflation, and more.