I will teach you to be rich by Ramit Sethi
Meine persönliche Bewertung: 10/10
Lesedatum: Dezember 2019
Why are money and food so similar?
|When it comes to food, we …||When it comes to personal finance, we …|
|don’t track calorie intake||don’t track spending|
|eat more than we know||spend more than we realize – or admit|
|debate minutiae about calories, diets, and workouts||debate minutiae about interest rates and hot stocks|
|value anecdotal advice over research||listen to friends, our parents, and TV talking heads instead of reading a few good personal finance books|
A lot of your financial problems are caused by one person: you.
Online banks have no branches and no tellers and spend very little on marketing, which allows them to accept lower profit margins than conventional banks.
The most important practical difference between checking accounts and savings accounts is that you withdraw money regularly from your checking account – but you rarely withdraw from your savings account.
Having your money in two separate accounts makes money management easy.
But it’s not just your immediate earnings – being young is about developing the right habits. We’re cutting our teeth with small amounts of money, but as our savings account increases from $5,000 and $10,000 to $100,000 to $1 million, the habits really start to matter. Start small now so that you do have a lot of money, you’ll know what to do with it.
Investing is the single most effective way to get rich.
Investigate the features your account offers.
The difference between cheap and frugal:
Let’s first dispense with the idea that saying no to spending on certain things means you’re cheap. If you decide that spending $2.50 on Cokes when you eat out isn’t worth it – and you’d rather save that $15 each week for a movie – that’s not cheap. That’s using frugality to drive conscious spending.
|Cheap people care about cost of something.||Frugal people care about the value of something.|
|Cheap people try to get the lowest price on everything.||Frugal people try to get the lowest price on most things, but are willing to spend on items they really care about.|
|Cheap people’s cheapness affects those around them.||Frugal people’s frugality affects only them.|
|Cheap people are inconsiderate. For example, when getting a meal with other people, if their food costs $7.95, the’ll out in $8 knowing very well that tax and tip mean it’s close to $11.||Frugal people know they have to pick and choose where they spend their money. If they can spend only $10 on lunch, they’ll order water instead of Coke.|
|Cheap people make you uncomfortable because of the way they treat others.||Frugal people make you feel uncomfortable because you realize you could be doing better with your money.|
|Cheap people keep a running tally of how much their friends, family, and coworkers owe them.||Some frugal people do this, too, but certainly not all.|
|Because of the fear of even one person suggesting they spend too much on something, cheap people are not always honest about what they spend.||Neither are frugal people.|
|Cheap people are unreasonable and cannot understand why they can’t get something for free. Sometimes this is an act, but sometimes it’s not.||Frugal people will try as hard as cheap people to get a deal, but they understand that it’s a dance, and in the end, they know they don’t intrinsically deserve a special deal.|
|Cheap people think short term.||Frugal people think long term.|
Spend on what you love.
Frugality, quite, simply, is about choosing the things you love enough to spend extravagantly on – and cutting costs mercilessly on the things you don’t love. The mindset of frugal people is the key to being rich.
It’s about making your own decisions about what’s important enough to spend a lot on, and what’s not, rather than blindly spending on everything.
The problem is that hardly anyone is deciding what’s important and what’s no, dammit!
Saving with a goal – whether it’s tangible like a house or intangible like your kid’s education – puts all your decisions into focus.
Habits don’t change overnight, and if they do, chances are it won’t be sustainable.
Remember that getting a raise is not about you. It’s about you demonstrating your value to your employer.
For example, if you know you’ll have to spend about $500 on Christmas gifts, start saving $42/month (that’s $500 divided by twelve months) in January.
I plan to do less and less work as I go through my life. When I meet people on a career path that will have them work more, not less, I’m always puzzled. That’s like being real-life Mario Brother, where every level you beat means you life gets progressively more difficult.
By investing little now, we don’t have to invest a lot later.
Irregular incomes, like those of freelancers, are difficult to plan for. Some months you might earn close to nothing, others you’re flush with cash. This situation calls for some changes to your spendings and savings. First – and this is different from the Conscious Spending Plan – you’ll need to figure out how much you need to survive on each month. This is the bare minimum: rent, utilities, food, loan, payments – just the basics. Those are your bare-bones monthly necessities.
Add savings goal of three months of bare-bones income before you do any investing. For example, if you need at least $1,500/month to live on, you’ll need to have $4,500 in a savings buffer, which you can use to smooth out months when you don’t generate much income. The buffer should exist as a sub-account in your savings account. To fund it, use money from two places: First, forget about investing while you’re setting up the buffer, and instead take any money you would have invested and send it to your savings account. Second, in good months, any extra dollar you make should go into your buffer savings.
Once you’ve saved up three months of money as a cushion, congratulations! Now go back to a normal Conscious Spending Plan where you send money to investing accounts.
In truth, being rich is within your control, not some expert’s. How rich you are depends on the amount you’re able to save on your investment plan. But acknowledging this fact takes guts, because it means admitting that there’s no one else to blame if you’re not rich – no advisers, no complicated investment strategy, no “market conditions.” But it also means that you control exactly what happens to you and your money over the long term.
Unfortunately, the fact is that nobody can predict where the market is going.
More information is not always good, especially when it’s not actionable and causes you to make errors in your investing. The key takeaway here is to ignore any predictions that pundits make. They simply do not know what will happen in the future.
Cash is the safest part of your portfolio, but it offers the lowest reward.
Of course, based on the different types of investments you make, you can expect different returns. Higher risk generally equals higher potential of reward.
Investing in only one category is dangerous over the long term.
Higher risk generally equals higher potential for reward.
Index funds reflect the market, which is going through tough times but, as history has shown, will climb back up.
Dollar-cost averaging is a fancy phrase that refers to investing regular amounts over time, rather than investing all your money into a fund at once.
Buy low, sell high.