5-minute video interview: How do you get rich?

July 28 36 Comments latest by The Taste » Blog Archive » Ramit, How do you get Rich?

Here’s an interview I did with Piers Fawkes of PSFK last week and I thought you guys might want to check it out. (RSS readers, click here to see the video.)

0:00 — Why I started I Will Teach You To Be Rich (skip this if you’ve already heard it)

0:35 — Do young people really care about money?

1:10 — We feel guilty about our money

1:33 — What people do when they read iwillteachyoutoberich

2:00 — My favorite result when people read this blog

2:15 — What is rich?

2:20 — Can’t people just find this information by going to a bank? (This is where I crack up.)

2:45 — People who just read my site vs. people who take action

3:00 — How I scale iwillteachyoutoberich, monetization, and a little about PBwiki

3:55 — “The voice of 10,000″ to scale beyond just one person

4:50 — Why it’s more important to spread the word about personal finance than to make money right now

(21 votes, average: 4.14 out of 5)

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36 Comments latest by The Taste » Blog Archive » Ramit, How do you get Rich?

Sleep research discusses sexy vs. rich

November 15 9 Comments latest by Money Tips Linking 18 Nov 2007 | KCLau's Money Tips

It’s amazing how many people think money has to be complicated. I always talk how the most ordinary things usually work quite well — deciding how much to consciously save, consistently growing your money in a diversified way, etc — instead of debating minutiae about the fanciest investments. Take a look at this new sleep research covered in the New York Times, which has lots of parallels to personal finance.

The “…American Journal of Psychiatry analysis of 21 studies showed that behavioral treatment helped people fall asleep nearly nine minutes sooner than sleep drugs. In other measures, sleep therapy worked just as well as drugs, but without any side effects.

The behavioral strategies for better sleep are deceptively simple, and that’s one reason why many people don’t believe they can make a difference [emphasis mine]. One of the most effective methods is stimulus control. This means not watching television, eating or reading in bed. Don’t go to bed until you are sleepy. Get up at the same time every day, and don’t nap during the day. If you are unable to sleep, get out of bed after 15 minutes and do something relaxing, but avoid stimulating activity and thoughts.

It may be hard to believe, but studies show these simple steps really do make a meaningful difference for people with sleep problems.”

Hmm, could managing your money be the same? If you have a friend who is paralyzed by inaction, maybe sending this to them will wake them up. (Note to new friend: Here’s the table of contents of all my past articles.)

(1 votes, average: 4 out of 5)

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9 Comments latest by Money Tips Linking 18 Nov 2007 | KCLau's Money Tips

An annoying email I got

October 24 114 Comments latest by IUnderstand

Nathan writes:

This is nothing personal against you, because every personal finance author I’ve read says the same thing, but your advice is not for real people like me. The “spend less, save more” theory is great for singles or young married couples with no kids (and therefore, fewer attachments, expenses, etc.) I’m 30 years old, married, with two children. I make a very good wage for a 30-year old, but after a mortgage, two car payments, a wife who is a full-time student herself, daycare, and (many) other various utilities, activities, etc. there’s not much left for saving.

Granted, things will be better in a couple years when my wife is done with school and we’re back to being a dual income household. But all you personal finance gurus are people who have graduated from Stanford (or some other 1st tier school) and worked your way into a high paying, high end job. You represent about 0.01% of the population. Not that I hold that against you–I wish I had been that successful. But I need some other strategies to help me get my finances in order.

My response:

So what’s the alternative? Throw your hands up and say, ‘I give up — there’s nothing I can do’? Or are there small, systematic ways you can save more, invest more, earn more, and spend money in a conscious way?

I also pointed him to The Shrug Effect. He wrote back:

I think you miss my point. At no time did I resent your success and doubt that I ever could have done that. Had I had differing priorities in my younger days, I’m sure I would be in a much different position than I’m in now. But I chose to get married, have children, and support a wife’s dream of medical school, among other things.

[…]

My whole point, which you missed, was that most of the the personal finance articles available are not geared towards people in my situation.

Huh? I’m not the only personal-finance writer online — there are lots of other people who write about getting out of debt, frugality, etc. My response:

This is an interesting discussion so I’d like to continue on it for a minute, if it’s ok with you.

I understand your point, but I’ve seen thousands of articles about people in your situation. Few, very few articles, are geared towards young people who have everything together. Most of the articles are about how to get out of debt, how to spend less, etc.

I’m curious: Exactly what kind of advice are you looking for?

He didn’t respond, so I re-pinged him a couple days later. His final response:

After sitting on this a while, I realize that there isn’t really any advice I can be given. I want to–and do, for the most part–give my wife and kids whatever they want. Until I stop doing that, the whole saving more, spending less thing won’t work for me.

I think that’s very perceptive of him to realize that there isn’t really any advice he would listen to. Notice how at first he didn’t think any personal-finance advice was relevant for him (even though there are millions of articles online for every conceivable situation). Could the problem have been him, not the advice? Answer: Yes. So here are my thoughts.

1. If you don’t say no to things, your life is guided by external priorities, not your own.

• If you don’t say no at work, you’re going to be resentful of your workload
• If you don’t say no to going out all the time, it’s going to be tough to save money
• If you don’t say no to your family sometimes, you’re not going to be able to save, much less grow your money

2. Ordinary actions get ordinary results. Look around. Do you see many rich people around you? No, because they are behaving in predictably ordinary ways: Not knowing how much they spend, not being conscious about where their money goes, and not setting investing goals. Want an easy way to see this? Go ask your friends who just went on vacation (or bought a new handbag or iPhone or whatever) this: “Wow, that’s awesome. How long did you save to be able to buy that?” Their reaction will be priceless, as if the antagonist from Saw II is holding their head in a vise and ordering them to look at the moon while opening their mouth. Try it.

As always, there are no secrets to personal finance. Fundamentally, you can either cut costs or make more money. When I say that, people roll their eyes, but they fail to dig into each part. Cut costs? That means saying no. That means being merciless with budgeting and negotiating and making smart purchases for the long term. Make more money? That means entrepreneurship, working two jobs, or asking for a raise.

The whole point of this site is that getting rich doesn’t happen to you. You make it happen. Until you step up, nothing will change.

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(3 votes, average: 5 out of 5)

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114 Comments latest by IUnderstand

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