Book Review – I Will Teach You To Be Rich

I read another great book this month by Ramit Sethi titled: I Will Teach You To Be Rich.  This is a great beginners book on saving, investing, and general personal finance.  Even though I consider myself to have graduated beyond the beginner stages of personal finance knowledge, there were still lots of new and good pieces of advice and tidbits that I plan to implement!

 

 

 

 

 

I Will Teach You To Be Rich – What I didn’t like about this book

I Will Teach You To Be Rich isn’t for those that are very adept at saving and investing.  If this is you, you can probably move onto something more complicated.  I found the book to be a little too basic at the beginning when it came to topics like savings, setting up bank accounts, etc.

The main target audience for the book is people in their 20s through early 30s.  If you aren’t in this age group, then most of the advice given in the first half will probably be obvious to you unless you really are a beginner when it comes to personal finance.

One other thing that turned me off initially with I Will Teach You To Be Rich  is that the author is very opinionated.  He believes that after paying yourself first, you should basically feel free to spend all of your remaining money on whatever you want without any real concern.  This doesn’t completely gel with my way to thinking – I feel that you should use frugality in all areas of your life.  I was able to put his constant criticism of frugality aside and continue on reading, but some like-minded frugal readers may find this annoying to the point where they can’t continue on reading.

OK, those were my small gripes – now let’s move onto the good stuff in the book.

 

I Will Teach You To Be Rich – What I Loved about this book

Throughout I Will Teach You To Be Rich, Ramit kept the book fun by offering many light hearted jokes, funny indian diatribes, and self ridicule.  This helped to keep the material fun and lighthearted.  As a result, the book is a very easy and a joy to read through.

I Will Teach You To Be Rich is filled with very practical advice for how you can arrange your “financial house”.  As a result of reading the book, I’ve made the commitment to myself to setup a Roth IRA for my wife and me (a goal for my September 2013 Report).  It’s one of those things I always knew I needed to do, but hadn’t ever gotten around to it.  Ramit explains in good detail why you need to setup a Roth IRA now!

The final thing I loved with I Will Teach You To Be Rich (that I incidentally intend to build on and present here on MoneyAhoy) is how he laid out a financial roadmap.  I’ll spell out the basics here, but I really encourage you to read the book if you haven’t made it all the way to step 5 (or you’ve skipped some steps along the way).  Here are the steps:

1. Enroll in your company’s 401K up to the employer match (typically anywhere from 3% – 9% of your pay)
2. Pay off any consumer debt (car payments, credit card debt, student loans, anything with >5% APR, etc.)
3. Setup a Roth IRA and contribute up to the maximum ($5,500 / year for 2013 – if you’re married you can have two accounts and contribute $11,000)
4. Contribute up to the maximum allowable for your 401K ($17,000 for 2013 – if you’re married your spouse can also put $17,000 into their 401K)
5. Setup an individual investment account begin investing in lifecycle management funds, or a portfolio that is allocated mainly to market index funds.

In my case, I had skipped step #3 of setting up a Roth IRA.  I Will Teach You To Be Rich gave me the push I needed to overcome the “mental hurdle” and setup a Roth IRA investing account for both my wife and me.

I loved these five steps, and I would probably add one of my own.  Step 2.5 would be to save 3 months of expenses and have it sitting in the bank (I know that this is a controversial topic among many PF bloggers.)

Book Review – Rich Dad Poor Dad – Rating

6/5 Stars – The best personal finance book I’ve read to date.  I highly recommend you stop what you’re doing and read this book now!!  That’s why I’m giving it 6 out of 5 stars 🙂

I Will Teach You To Be Rich – Final Thoughts

This is a great book that will be helpful to just about all readers except those that have advanced personal finance knowledge.  It is a little on the beginners side of things for the first half of the book, but the scope of what Ramit addresses ramps up in the second half.  The writing style and humor that Ramit incorporates into the book keeps it fun and makes for an easy read.

If you haven’t made it all the way through the five steps outlined above, then I’d encourage you to pick up a copy of I Will Teach You To Be Rich today!  You’re sure to find some of his advice helpful and actionable!