★ Rockstar Book Review: “I Will Teach You to Be Rich”
This is part of our Rockstar Book Review series.
Be sure to check out all previous books we’ve covered!
“I Will Teach You to Be Rich” – Seriously Good Advice, Despite Its Unconventional Approach
Here’s the information and advice that makes this book unique. It:
- Helps us navigate service providers… and negotiate with them.
- Offers a primer on investing by debunking the myth of financial service expertise.
- Compares the benefit of paying down debt to investment returns in a systematic way.
More on each of these:
#1. Navigating Service Providers
IWTYTBR teaches us how to navigate service providers. Ramit provides the best advice I’ve seen so far in a general personal finance “how-to” book on how to negotiate with banks, credit card companies and utilities, to get the most out of every dollar we spend with them.
He even goes as far as providing the play-by-play scripts we can use to call service providers and get a better deal.
For some reason, half my friends are afraid of talking to people on the phone and it ends up costing them lots of money. (pg. 63)
The author also addresses the need to consider the impact the use of their products can have on our credit score and why that matters; how much of a service is negotiable; and, how to decide whether a rewards card is the right way to go based on your behavior and spending habits. (Ironically, I was reading this book on a flight I’d purchased with my rewards miles. :))
#2. The Myth of Financial Expertise
If there’s an argument to stay away from actively-managed funds and financial advisors (other than fee-only), he covers them all. Ramit offers very clear advice on how to invest the funds we have at our disposal and explains why trusting “experts” is more likely to cost us money as opposed to make us money. He keeps his investing advice clear and in line with both our personal risk tolerance and how much we have available to invest.
Instead of enriching ourselves by saving and investing, most American households are in debt. And the wizards of Wall Street can’t even manage their own companies’ risk. Something’s not right here: Our financial experts are failing us.
#3. Paying Down Debt vs. Investing
This is always a big issue for anyone who has debt and wants to save for the future. Even Melanie, author of Dear Debt, had some regrets about not starting to invest while she was paying down debt (see her bonus interview at the end of that review).
Ramit’s advice? Unless it’s very low interest rate debt, such as current 30-year mortgage rates, focus on paying down debt first before worrying about investing, because that’s the best return you can hope for until your consumer debt is paid off… unless you have an employer match on a 401k (see Investment Ladder pg. 76-77).
The Bottom Line
Despite its 2009 publish date and some noted reservations, IWTYTBR is a book I’d recommend as a useful reference for anyone between 18-30 years of age because it’s complete, well organized, easy to follow, and offers solid advice.
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