Book review: I will teach you to be rich

Just started this book by Ramit Sethi and I like its entertaining style so far. Honestly I find it much more entertaining than the white coat investor and I like his sense of humor and he also has the immigrant mentality background. And it’s purpose meshes with my blog, we both want our writing to help people to feel more comfortable about money. Also I like that he emphasizes that there isn’t one right way to get there for everyone. Do you want to save and invest 20% and get there in 30 years or 50% and FIRE (what I did). And we all get to choose how we want to be rich. Does being rich mean to you that you no longer need to work for money, but for your own personal satisfaction if at all? Does being rich mean living in a certain area? Or buying what you want? Or traveling where you want? Or not having to worry about money?

Chapter 1: would you rather be sexy or rich (lol)

 Why is managing money so hard? One thing is the information overload, all of the things on the news, what people are saying, and when you login and see a list of hundreds of investment options. There is research showing that when you are inundated with information/choices, this can lead to decision paralysis. (This is why I like the “three fund portfolio” - total stock market, total bond market and total international, or even two fund portfolio without the international, as described in JL Collins book, The Simple Path to Wealth). And speaking of which I don’t want my book club or this blog to contribute to information overload so I’ll try to reiterate the simple strategy I personally believe in for creating wealth: 

Winnie's money strategy:

1. Live within your means

2. Automate saving and investing (set and forget)

3. Enjoy your life (while your money works for you)

Other points he discusses are the benefits of starting early and also that the best time to start investing was 10 years ago, and the second best time is today. As well as the single most important factor to getting rich is getting started, not being the smartest person in the room. You’re not a victim, you’re in control. You want your investment returns to be average (which he says are an 8% return, which actually would be amazing) and that the people who strive to be above average by frequent trading actually tend to do worse. So with money, you want your performance to be "average", but you definitely want to strive to be above average in things like your relationship and your work. And of course "average" portfolio performance isn't "sexy" but you would be rich. Frequent trading is "sexier" but does not on the whole make you richer.

 I like his focus on the big wins, which are automating your savings and investing, finding a job you love and negotiating your salary. Here he brings up thinking about what is your rich life which is different for everyone. For me it’s having the ability to choose my health, from the freedom to choose whether or not to work in my profession, which was deleterious to my health, as well as the ability to pay for things which help my health (out of network costs, time to do my PT exercises and go to appointments etc). I totally agree with the title (and point) of this chapter, long-term buy and hold investing style and index funds is not sexy but it will make you rich.


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