The key ideas

I Will Teach You to Be Rich

Ramit Sethi, 2009

You can buy that coffee to go without feeling guilty. Ramit Sethi offers a six-week program built on a few big decisions, automatic transfers and spending lavishly on what you truly love. An American book about money with principles you can take to any country.

Who it is for

For anyone who feels guilty about buying things and still can't tell where the money goes. And for anyone who wants to get their finances in order without a strict budget.

Spend extravagantly on the things you love, and cut costs mercilessly on the things you don't.

What the book is about

You skip the coffee to go, you feel guilty about almost every purchase, and by the end of the month the money is gone anyway. Ramit Sethi gives an answer that sounds strange in a book about getting rich: buy as many lattes as you like.

Instead of lectures and a dull budget, he offers a six-week program: credit cards, bank accounts, first investments, a spending plan, automation and simple long-term investing. How you can grow rich without fighting over small change is what the next pages are about.

One honest caveat: the book was written for the United States, and its principles are what will serve you most. This is the author's approach, not personal financial advice. And the fact that you are opening a book about money instead of looking away from your bank statement is already a step many people put off for years.

Idea 1. Your Rich Life comes first

Sethi writes that in years of talking to people about money, he always asks them two questions: why do you want to be rich, and what does "rich" mean to you? In his experience, most people have never spent even ten minutes on the answer.

His friends answer in different ways. Paul loves dinners at Michelin-starred restaurants, Nicole loves travel, Nick loves clothes. And Sethi's very first list held an almost funny goal: ordering appetizers at restaurants, something he never did as a child.

In the author's version, a Rich Life is a specific picture, not a number in an account. Without one, he argues, it is easy to start mindlessly chasing what other people spend on.

Sethi says not to be shy about the size of the dream: "take a taxi instead of the bus" counts as a goal too. He himself once decided to go to a museum or a Broadway show once a quarter.

Until you name what you want to spend on, any purchase can feel suspicious. A specific list can turn some of that guilt into a plan.

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About the author

Ramit Sethi is an American author and entrepreneur and a Stanford graduate. In 2004 he started the blog "I Will Teach You to Be Rich", which grew into this book; the second edition came out in 2019.

All books by this author: Ramit Sethi

I Will Teach You to Be Rich Quiz

Terms from the book

  • Index fund
  • Rich Life: The author's term, not a financial metric: a specific picture of the life a person wants to spend money on. Everyone's is different.
  • Conscious Spending Plan: Sethi's scheme: take-home pay is split into four buckets: fixed costs, investments, savings and guilt-free spending. The suggested shares are the author's proposal for the US, not a universal rule.
  • Big Wins: The author's phrase for a few big decisions that, in his view, can affect your finances more than small savings.
  • Automatic money flow: A system of automatic transfers that sorts money into accounts and goals by itself after payday.
  • Credit history: The record of how a person has borrowed and repaid loans. It can affect the terms of new loans; in the US it is the basis of the credit score.

All terms

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