I Will Teach You To Be Rich

0761147489
Ramit Sethi

Notes

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

The Ladder of personal finance

Rung 1 = Match your employers 401k
Rung 2 = Pay off debt
Rung 3 = Fund a Roth IRA
Rung 4 = Fund 401k to its limit
Rung 5 = Invest

    • in stocks
    • in your mortgage
    • in yourself

    6 WEEK PLAN

    Week 1 = Optimize credit cards

    1. Get Your Credit Report and Score
    2. Set up or service your credit cards
    3. Handle your credit cards effectively/responsibly
      • Automatic payments
    4. Pay off your debt

    Week 2 = Set up bank accounts

    1. Open a Checking Account or Assess the one you already have.
    2. Open an online high interest savings account
      • Open an Online Checking Account if interested
    3. Fund your online savings account
      • Move all money there except for 1 1/2 your monthly expenses to avoid overdrafting.

    Week 3 = Set up investment accounts

    1. Open 401(k) and contribute
    2. Plan how to pay off debt
    3. Open Roth IRA and set up Automatic Payments

    Week 4 = Conscious spending: Setting up a budget

    1. Determine What you have been spending over last three month
      • Figure out your Conscious Spending Plan
    2. Optimize your spending
    3. Pick your big wins
      • Use envelope system
    4. Maintain Conscious Spending Plan
      • Enter receipts each week
      • Tweak percentages
      • Track regularly

    Week 5 = Automate your system

    1. List All Accounts in one place
    2. Link your accounts together
    3. Set Up Your Automatic Money Flow

    Week 6 = Selecting your investments and asset allocation

    1. Figure out your investing style
    2. Research your investments
    3. Buy your funds