Book review of I Will Teach You To Be Rich, by Ramit Sethi

Ramit Sethi has done an interesting job in trying to cater this book for the UK market. His main message is that people need to stop wasting time talking about finance, and actually ensure they are doing something about it. He says getting started is more important than becoming an expert. 

I loved the bit on page 13 (optimize your credit cards) where he gives the story of how his dad bargained for 5 days to buy a car, then walked away from the deal when they refused to throw in free floor mats. That's the kind of negotiator I want to be someday! These little stories from his own life experience really help to make this book more interesting.

He says switching rates for the best bank interest is a waste of time. I sort of see his point that it's a minor hassle to change, but the free money you get from switching banks cannot be ignored. As I write this, Alliance and Leicester bank is giving customers £100, just to switch to their bank (which I have every intention of doing). Hardly a waste of time for a few minutes of pressing a few computer keys. He highlights that high street banks pay far lower interest than online banking. I hadn't realized that the difference was so severe, as I only use online banking now, but it just goes to show how much people can restrict their finances if they refuse to learn new technologies.

He says don't budget, just have automatic direct debits to your savings account, and spend what is left over. The problem with this is that many people will overspend what is left over. You really do have to budget or you will waste money blindly. It's not easy to stick to a budget, and I'm always shocked when I go over mine, but like the edge of a cliff, a budget lets you know how far you can go. People have to learn to stick to budgets, I had to pledge to leave all my cash and credit cards at home, to help me stick to my budget. 

Ramit does not have a lot of love for Real Estate/property investment. It's certainly a challenge for people to get into that nowadays, but the benefits of owning your own home and/or someone else's, truly needs to be championed. Ramit said that he currently rents, and that property is a bad investment. He said in chapter 9: "As an investment, real estate provides mediocre returns at best". However, I've noticed that virtually every rich person I have studied recommends investing in property, and whilst I will think about the points he made, I'll still be investing in real estate. 

I reckon he appeals mainly to students. He has made a good point of the need to get into investing now, and shows convincingly that the power of compound interest means that the sooner you start, the better off you will be. This is a well informed, well researched book. 

Moneyseeker3000 rating: 3 stars out of 5