January 29, 2024 • 13 mins
Ramit Sethi's book, I WILL TEACH YOU TO BE RICH: The Journal, promises no complicated math, in an easy-to-read book meant to help us understand our money behavior and create our own vision of a Rich Life. Ramit Sethi began his website, iwillteachyoutoberich.com, in 2004 as a Standford undergraduate, and hosts over a million readers per month on his blog, newsletter, podcasts and social media.
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Episode Transcript
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(00:02):
Welcome to get Connected with Nina delRio, a weekly conversation about fitness,
health and happenings in our community onone oh six point seven light FM.
Good morning, and thanks for listeningto get connected. At a time when
so many of us are thinking aboutour money or should be thinking about our
money. Ramaite Saeti returns to theshow with a companion book to his best
(00:24):
selling debut, This is I WillTeach You to Be Rich The Journal,
No complicated math, no more procrastinating, Design your rich life today, Ramat,
thank you for being on the showagain. Thanks for having me back.
His website is I Will Teach Youto Be Rich dot com. And
what does rich mean to you anyway? Well, when most of us think
about the word rich, we havethese old ideas of wearing a fur coat
(00:48):
and being chauffeured around in the backof a limo and eating at some long
table. But I think that's reallyHollywood's vision of what rich means. And
to me, rich can mean buyinga buy beautiful coat. Rich can mean
traveling two months a year, orrich can even mean having the flexibility to
pick up your children from school everyafternoon. The key is that you define
(01:11):
your rich life, not anybody else. So this is a money book with
an engaging title. Obviously, yourapproach in this book also is a journaling
approach. What do you think canyou talk about the power of organizing in
print and writing stuff down, especiallytalking about money. Yeah. Some people
ask me if we have a digitalversion of this, and I said no,
(01:33):
this is meant to be held inyour hand. It's meant for you
to give yourself the gift of fifteenminutes a week and a quiet room and
your favorite cup of coffee, andgive yourself the ability to dream about money.
See what most of us think aboutmoney. It's somebody telling us all
the things we can't do. Noyou can't buy lattes. No you can't
(01:53):
go on vacation, No you can'tbuy jeans. Finally, we get to
start getting back to what do Iwant in my rich life? What is
meaningful to me? And who doI want to bring with me? In
order to do that, I wantyou to be tactile, and I want
you to sketch it out physically rematbefore we go forward and talk about some
(02:15):
of the ideas you bring in thebook. Let's talk about you. So
your bio is interesting. I'm goingto read a bit of it. Remat
wasn't the smartest kid in his class, but he loved building systems, which
ultimately earned him over two hundred thousanddollars in scholarships, which he used to
get his bachelor's and master's master's degreesin technology and psychology at Stanford. Money
and math scare so many people don'teven deal with it rightly, to our
(02:38):
detriment as not the smartest kid.Quote, why did you run towards it?
What was the excitement or interest evenin it? About it when you
were young. I think money isone of the core parts of our rich
life. It's not the only part, but is a small but important part
of it. And it is true, I was not the smartest kid,
(02:59):
and you don't have to be advancedat math to understand money. There are
a lot of people who have hadso many bad experiences with money that they
now come up with these phrases tojustify not paying attention. They will literally
say, I'm just not good atmath, I'm just not good at money.
But we would never say that aboutparenting. We would never say that
(03:22):
about driving a car. We wouldaccept that it's a skill to be learned
and that we've got to put timeinto it. So how can we put
time into the things we love todo? Self care, getting our nails
done, going to the gym,walking our dog. But very few of
us have ever spent one weekend readinga book about money. I want to
(03:43):
change that. You touch on somethingthat I think. We're all influenced by
our history with money, our moneybeliefs. Where do our money beliefs come
from? And to what extent canthey be rewired? We carry our money
beliefs from a young age. Seeif any of these phrases sound familiar to
you. We can't afford that wedon't talk about money in this family.
(04:08):
Money doesn't grow on trees, andon and on. Do any of those
sound familiar to you? Of course, all of us grew up with some
version of this, and most ofus are surprised that we still carry these
beliefs. We actually believe they arefacts forty fifty years later. So I
will routinely speak to people with millionsof dollars in the bank, and you
(04:31):
know what they'll say to me.They'll say, I'm just upper middle class,
and I'm not sure if I'll everhave enough. And I say,
first of all, let's take theword upper out of it, and let's
take middle class out of it,because you're neither of those. You're wealthy.
And second, if you don't thinkyou will have enough, is there
an amount that will finally make youfeel safe? And deep down most of
(04:54):
us in this culture believe that itis a number that will make us feel
safe. The truth is, you'refeelings about money are highly uncorrelated with the
amount you've gotten the bank. It'snot just math, it is your psychology
that you need to work on withmoney. Ramat Sati is a financial guru
to millions of readers. He startedhis website I Will Teach You to Be
(05:15):
Rich dot com as a Stanford undergroundin two thousand and four. He now
hosts over a million readers per monthon his blog, as newsletter, podcasts,
and social media. You can linkto those that I Will Teach You
to Be Rich dot com. Thebook is I Will Teach You to Be
Rich. The journal this is getConnected on one oh six point seven light
FM. I'm Nina del Rio.You write in the book often how you
(05:36):
see people obsess over three dollar questionsversus thirty thousand dollars questions. Instead of
being focused on the cost of athree dollars power bar, what should we
be focused on? We should beasking the five to ten big wins in
life and getting those questions right.Most of us obsess over things like can
(05:57):
I afford this latte? Should Iget an extra dessert? Should I switch
my ally bank? Because the interestrate drop point one percent? These literally
add up to three dollars, Andeven if you add up all the lattes
over the course of your life,it's not even that much money, and
you'll have a miserable morning. Instead, here's a few questions you should be
asking. What is my savings rate? That single question alone. If you
(06:19):
save eight percent of your income andyou make a rule that every year I
want to increase it by one percent, you will make more money with that
one decision alone than a lifetime ofcutting back on lattes. Another thirty thousand
dollars question, what is your assetallocation? You know most people have never
even heard that phrase. What doesthat mean? That is how your money
(06:41):
is invested? Like a pie chart. That is worth getting right. That
single decision alone is worth more thanany amount of eating out you will ever
do. So, get these thirtythousand dollars questions right, and you never
have to worry about the price ofcoffee as your real hitting your spending.
You do suggest that at least onecategory, in one category or item to
(07:05):
have no spending limits. Yeah,I want you. I want everyone to
feel that money is a source offreedom, not simply restriction. I remember
when I was in college, Ihad that scholarship and I could go into
the bookstore and buy any book Iwanted, and that made me feel like
I was a multi millionaire. Andso when I graduated from college, I
(07:26):
told myself, I am going tocreate Rameat's book buying rule, which means
anytime I see a book, ifI even have remotely an interest in it,
I'm going to buy it. AndI have no spending limits on my
on books or then I increased itto health or donating to a friend's charity
fundraiser. I'm always curious when Iask people what is something you will spend
(07:48):
anything on? Actually I'm curious whatwould your answer be? Oh goodness,
audio gear love it? There yougo see and I love that's it just
lights you up. We've all gotsomething in our lives, and that is
where I love to meet people.Tell me what you love, tell me
what gets you excited, and thenwe can rework your money so you can
(08:11):
actually spend even more guilt free onthat thing. Let's move to money in
relationships. So very often one partnermight be in charge of the money.
Maybe they're just more interested, ortheir partner trusts them. Why should both
people be involved? Though this happenedwhen my wife and I met and we
started really putting our money together.It would have been very easy for me
(08:33):
to take charge of money. Iknow more about money. This is my
business. But we sat down andwe talked about it, and I said,
you know, one day I'm notgoing to be here. I want
you to understand money, to beprepared to be a good steward of it.
I also think it's important for usto both have a say. We
need to put skin in the game. And finally, it's just a lot
more fun. So sure, oneperson might take a little bit more of
(08:54):
a lead, but unlike emptying thedishwasher or mowing the lawn, money is
much more like parenting. Both peoplehave to be intimately involved in this activity.
What if you and your partner don'thave the same relationship to money.
You probably don't. You definitely grewup with different money messages. Most people
(09:15):
don't even know their own money messagesthey grew up with, and then they
combine it with a partner who doesn'tknow their own. The good news is
you don't have to agree on everything. What you do is you create a
shared vision of a rich life,and that is what the journal will help
with. The two of you sitdown, you sketch out answers to the
questions, and then you get tohave a conversation that is filled with fun,
curiosity, joy, and you getto craft your own rich life together.
(09:41):
You talk about building confidence with money, not freaking out when unexpected expenses
pop up, But isn't that mucheasier when you have some money? Of
course, of course, some ofthese things become easier once you have money.
But as I said, I speakto millionaires who constantly feel anxiety,
so just having more does not buildup your money psychology skills. Here's what
(10:03):
you do. At the end ofevery year. You can do an annual
rich life review. You can doit alone or with a partner. What
worked, what didn't, Where didwe overspend? Or underspend. What kind
of life do we want to livenext year? As part of that,
you can say, what are somethings that we think are going to come
up? Is it tennis camp?Is it an unexpected trip we might have
(10:24):
to take. Let's start putting alittle bit of money aside in advance automatically.
That way you never get caught bysurprise. What do we need to
know about inflation right now? Whatdo we need to know about a recession
right now? You can't predict it, so stop trying. Most people are
profoundly influenced by what is going onin the news, but they spend very
(10:46):
little time focusing on what they cancontrol right now. You would not believe
how many people are writing me aboutinflation, inflation, inflation. But guess
what, Almost nobody writes me askingabout what are the phantom costs that I
have to pay when I buy ahouse? I never even thought about taxes
or interest or maintenance? What arethe phantom costs with buying a car?
(11:09):
How About how much am I losingevery day by not investing or paying a
financial advisor one percent? Those arethings that cost you more than inflation,
and that is where you should bespending your time. So far, as
promised, we haven't really done anymath during this conversation. It seems that,
(11:30):
more than anything else, your approachto budgeting is really just psychology.
Well, I don't like budgets,first of all, and put simply,
most people don't either, because theydon't do it. Everyone listening right now
is like, I really should keepa budget. Well, if you were
going to keep a budget, youwould have kept it. It doesn't work
because it's backwards looking and at theend of the month you've spent two hours
(11:50):
categorizing your asparagus, and what doesit give you? Nothing? Instead,
I like to look forward. Icreate a conscious spending plan. I have
some guidelines like fifty to sixty percentof your take home go to fixed costs,
etc. It's all in there,and I can suddenly decide where do
I want to spend my money?What can I put in guilt free spending
so I can spend it without apologizingfor it. And I can do that
(12:13):
knowing that I'm automatically saving and investing. As you ask people to look forward,
there's so many things to look at. Where would you suggest someone start
start with what you love? Ialways like to ask people what do you
love to spend on? And asyou mentioned audio gear, and then I
ask them the next question, whatif you could quadruple you're spending on that?
(12:35):
And people's eyes just light up.What would it look like? What
would it feel like? And welive there for a moment. That's called
a money dial, And like astereo dial, you could turn it up
and turn it down. When peoplerealize that they can spend extravagantly on the
things they love as long as theycut costs mercilessly on the things they don't,
suddenly becomes a lot easier for themto take control because they know they're
(13:00):
working towards and what money gets them. I will teach you to be rich.
The journal no complicated math, nomore procrastinating design, Your Rich Life
Today is by Remait sati Remeat.Thank you for being on Get Connected.
Thanks a lot, I appreciate it. This has been Get Connected with Nina
del Rio on one oh six pointseven light FM. The views and opinions
(13:22):
of our guests do not necessarily reflectthe views of the station. If you
missed any part of our show orwant to share it, visit our website
for downloads and podcasts at one ohsix to seven lightfm dot com. Thanks
for listening.
Welcome to get Connected with Nina delRio, a weekly conversation about fitness,
health and happenings in our community onone oh six point seven light FM.
Good morning, and thanks for listeningto get connected. At a time when
so many of us are thinking aboutour money or should be thinking about our
money. Ramaite Saeti returns to theshow with a companion book to his best
(00:24):
selling debut, This is I WillTeach You to Be Rich The Journal,
No complicated math, no more procrastinating, Design your rich life today, Ramat,
thank you for being on the showagain. Thanks for having me back.
His website is I Will Teach Youto Be Rich dot com. And
what does rich mean to you anyway? Well, when most of us think
about the word rich, we havethese old ideas of wearing a fur coat
(00:48):
and being chauffeured around in the backof a limo and eating at some long
table. But I think that's reallyHollywood's vision of what rich means. And
to me, rich can mean buyinga buy beautiful coat. Rich can mean
traveling two months a year, orrich can even mean having the flexibility to
pick up your children from school everyafternoon. The key is that you define
(01:11):
your rich life, not anybody else. So this is a money book with
an engaging title. Obviously, yourapproach in this book also is a journaling
approach. What do you think canyou talk about the power of organizing in
print and writing stuff down, especiallytalking about money. Yeah. Some people
ask me if we have a digitalversion of this, and I said no,
(01:33):
this is meant to be held inyour hand. It's meant for you
to give yourself the gift of fifteenminutes a week and a quiet room and
your favorite cup of coffee, andgive yourself the ability to dream about money.
See what most of us think aboutmoney. It's somebody telling us all
the things we can't do. Noyou can't buy lattes. No you can't
(01:53):
go on vacation, No you can'tbuy jeans. Finally, we get to
start getting back to what do Iwant in my rich life? What is
meaningful to me? And who doI want to bring with me? In
order to do that, I wantyou to be tactile, and I want
you to sketch it out physically rematbefore we go forward and talk about some
(02:15):
of the ideas you bring in thebook. Let's talk about you. So
your bio is interesting. I'm goingto read a bit of it. Remat
wasn't the smartest kid in his class, but he loved building systems, which
ultimately earned him over two hundred thousanddollars in scholarships, which he used to
get his bachelor's and master's master's degreesin technology and psychology at Stanford. Money
and math scare so many people don'teven deal with it rightly, to our
(02:38):
detriment as not the smartest kid.Quote, why did you run towards it?
What was the excitement or interest evenin it? About it when you
were young. I think money isone of the core parts of our rich
life. It's not the only part, but is a small but important part
of it. And it is true, I was not the smartest kid,
(02:59):
and you don't have to be advancedat math to understand money. There are
a lot of people who have hadso many bad experiences with money that they
now come up with these phrases tojustify not paying attention. They will literally
say, I'm just not good atmath, I'm just not good at money.
But we would never say that aboutparenting. We would never say that
(03:22):
about driving a car. We wouldaccept that it's a skill to be learned
and that we've got to put timeinto it. So how can we put
time into the things we love todo? Self care, getting our nails
done, going to the gym,walking our dog. But very few of
us have ever spent one weekend readinga book about money. I want to
(03:43):
change that. You touch on somethingthat I think. We're all influenced by
our history with money, our moneybeliefs. Where do our money beliefs come
from? And to what extent canthey be rewired? We carry our money
beliefs from a young age. Seeif any of these phrases sound familiar to
you. We can't afford that wedon't talk about money in this family.
(04:08):
Money doesn't grow on trees, andon and on. Do any of those
sound familiar to you? Of course, all of us grew up with some
version of this, and most ofus are surprised that we still carry these
beliefs. We actually believe they arefacts forty fifty years later. So I
will routinely speak to people with millionsof dollars in the bank, and you
(04:31):
know what they'll say to me.They'll say, I'm just upper middle class,
and I'm not sure if I'll everhave enough. And I say,
first of all, let's take theword upper out of it, and let's
take middle class out of it,because you're neither of those. You're wealthy.
And second, if you don't thinkyou will have enough, is there
an amount that will finally make youfeel safe? And deep down most of
(04:54):
us in this culture believe that itis a number that will make us feel
safe. The truth is, you'refeelings about money are highly uncorrelated with the
amount you've gotten the bank. It'snot just math, it is your psychology
that you need to work on withmoney. Ramat Sati is a financial guru
to millions of readers. He startedhis website I Will Teach You to Be
(05:15):
Rich dot com as a Stanford undergroundin two thousand and four. He now
hosts over a million readers per monthon his blog, as newsletter, podcasts,
and social media. You can linkto those that I Will Teach You
to Be Rich dot com. Thebook is I Will Teach You to Be
Rich. The journal this is getConnected on one oh six point seven light
FM. I'm Nina del Rio.You write in the book often how you
(05:36):
see people obsess over three dollar questionsversus thirty thousand dollars questions. Instead of
being focused on the cost of athree dollars power bar, what should we
be focused on? We should beasking the five to ten big wins in
life and getting those questions right.Most of us obsess over things like can
(05:57):
I afford this latte? Should Iget an extra dessert? Should I switch
my ally bank? Because the interestrate drop point one percent? These literally
add up to three dollars, Andeven if you add up all the lattes
over the course of your life,it's not even that much money, and
you'll have a miserable morning. Instead, here's a few questions you should be
asking. What is my savings rate? That single question alone. If you
(06:19):
save eight percent of your income andyou make a rule that every year I
want to increase it by one percent, you will make more money with that
one decision alone than a lifetime ofcutting back on lattes. Another thirty thousand
dollars question, what is your assetallocation? You know most people have never
even heard that phrase. What doesthat mean? That is how your money
(06:41):
is invested? Like a pie chart. That is worth getting right. That
single decision alone is worth more thanany amount of eating out you will ever
do. So, get these thirtythousand dollars questions right, and you never
have to worry about the price ofcoffee as your real hitting your spending.
You do suggest that at least onecategory, in one category or item to
(07:05):
have no spending limits. Yeah,I want you. I want everyone to
feel that money is a source offreedom, not simply restriction. I remember
when I was in college, Ihad that scholarship and I could go into
the bookstore and buy any book Iwanted, and that made me feel like
I was a multi millionaire. Andso when I graduated from college, I
(07:26):
told myself, I am going tocreate Rameat's book buying rule, which means
anytime I see a book, ifI even have remotely an interest in it,
I'm going to buy it. AndI have no spending limits on my
on books or then I increased itto health or donating to a friend's charity
fundraiser. I'm always curious when Iask people what is something you will spend
(07:48):
anything on? Actually I'm curious whatwould your answer be? Oh goodness,
audio gear love it? There yougo see and I love that's it just
lights you up. We've all gotsomething in our lives, and that is
where I love to meet people.Tell me what you love, tell me
what gets you excited, and thenwe can rework your money so you can
(08:11):
actually spend even more guilt free onthat thing. Let's move to money in
relationships. So very often one partnermight be in charge of the money.
Maybe they're just more interested, ortheir partner trusts them. Why should both
people be involved? Though this happenedwhen my wife and I met and we
started really putting our money together.It would have been very easy for me
(08:33):
to take charge of money. Iknow more about money. This is my
business. But we sat down andwe talked about it, and I said,
you know, one day I'm notgoing to be here. I want
you to understand money, to beprepared to be a good steward of it.
I also think it's important for usto both have a say. We
need to put skin in the game. And finally, it's just a lot
more fun. So sure, oneperson might take a little bit more of
(08:54):
a lead, but unlike emptying thedishwasher or mowing the lawn, money is
much more like parenting. Both peoplehave to be intimately involved in this activity.
What if you and your partner don'thave the same relationship to money.
You probably don't. You definitely grewup with different money messages. Most people
(09:15):
don't even know their own money messagesthey grew up with, and then they
combine it with a partner who doesn'tknow their own. The good news is
you don't have to agree on everything. What you do is you create a
shared vision of a rich life,and that is what the journal will help
with. The two of you sitdown, you sketch out answers to the
questions, and then you get tohave a conversation that is filled with fun,
curiosity, joy, and you getto craft your own rich life together.
(09:41):
You talk about building confidence with money, not freaking out when unexpected expenses
pop up, But isn't that mucheasier when you have some money? Of
course, of course, some ofthese things become easier once you have money.
But as I said, I speakto millionaires who constantly feel anxiety,
so just having more does not buildup your money psychology skills. Here's what
(10:03):
you do. At the end ofevery year. You can do an annual
rich life review. You can doit alone or with a partner. What
worked, what didn't, Where didwe overspend? Or underspend. What kind
of life do we want to livenext year? As part of that,
you can say, what are somethings that we think are going to come
up? Is it tennis camp?Is it an unexpected trip we might have
(10:24):
to take. Let's start putting alittle bit of money aside in advance automatically.
That way you never get caught bysurprise. What do we need to
know about inflation right now? Whatdo we need to know about a recession
right now? You can't predict it, so stop trying. Most people are
profoundly influenced by what is going onin the news, but they spend very
(10:46):
little time focusing on what they cancontrol right now. You would not believe
how many people are writing me aboutinflation, inflation, inflation. But guess
what, Almost nobody writes me askingabout what are the phantom costs that I
have to pay when I buy ahouse? I never even thought about taxes
or interest or maintenance? What arethe phantom costs with buying a car?
(11:09):
How About how much am I losingevery day by not investing or paying a
financial advisor one percent? Those arethings that cost you more than inflation,
and that is where you should bespending your time. So far, as
promised, we haven't really done anymath during this conversation. It seems that,
(11:30):
more than anything else, your approachto budgeting is really just psychology.
Well, I don't like budgets,first of all, and put simply,
most people don't either, because theydon't do it. Everyone listening right now
is like, I really should keepa budget. Well, if you were
going to keep a budget, youwould have kept it. It doesn't work
because it's backwards looking and at theend of the month you've spent two hours
(11:50):
categorizing your asparagus, and what doesit give you? Nothing? Instead,
I like to look forward. Icreate a conscious spending plan. I have
some guidelines like fifty to sixty percentof your take home go to fixed costs,
etc. It's all in there,and I can suddenly decide where do
I want to spend my money?What can I put in guilt free spending
so I can spend it without apologizingfor it. And I can do that
(12:13):
knowing that I'm automatically saving and investing. As you ask people to look forward,
there's so many things to look at. Where would you suggest someone start
start with what you love? Ialways like to ask people what do you
love to spend on? And asyou mentioned audio gear, and then I
ask them the next question, whatif you could quadruple you're spending on that?
(12:35):
And people's eyes just light up.What would it look like? What
would it feel like? And welive there for a moment. That's called
a money dial, And like astereo dial, you could turn it up
and turn it down. When peoplerealize that they can spend extravagantly on the
things they love as long as theycut costs mercilessly on the things they don't,
suddenly becomes a lot easier for themto take control because they know they're
(13:00):
working towards and what money gets them. I will teach you to be rich.
The journal no complicated math, nomore procrastinating design, Your Rich Life
Today is by Remait sati Remeat.Thank you for being on Get Connected.
Thanks a lot, I appreciate it. This has been Get Connected with Nina
del Rio on one oh six pointseven light FM. The views and opinions
(13:22):
of our guests do not necessarily reflectthe views of the station. If you
missed any part of our show orwant to share it, visit our website
for downloads and podcasts at one ohsix to seven lightfm dot com. Thanks
for listening.
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