“I’ll teach you how to be rich” has helped me pay off my debts and save money

  • “I’ll teach you to be rich” has helped me get out of debt, fix my credit, and save money.
  • I’ve learned to stop making excuses, automate my finances, and prioritize debt first.
  • I also learned the impact of fees over time and that being a boring investor is a good thing.

A little over a year ago, I had a huge amount of debt and my credit score was around 400 low. I couldn’t get approval for any type of loan, and when retail stores asked me if I wanted to apply for the store’s credit card, my recurring joke was, “If I ran my credit, your car would break.”

Eventually, after a lifetime of being financially irresponsible, I decided I wanted to change things. I’ve read dozens of books, but Ramit Sethi’s “I Will Teach You to be Rich” is what changed my life.

Before reading this book, I thought all hope was lost for my financial future. I figured I’d be just one of those people who never had good credit, a savings account, a retirement account, or any type of investment. Not only did I have no money in savings, but I had five or six bills in pay and owed about $ 8,000 in tax.

Thankfully, Ramit’s book gave me the kick in the butt and the motivation I needed to get out of this situation. The book has provided me with an incredible amount of value, but these are the five lessons that impressed me the most and got me on the right track.

1. Take responsibility

All my life, I have been filled with excuses as to why my financial situation was a disaster. I blamed my parents for not being good with money and used it as a crutch to never get educated. I also justified not paying the bills because these companies didn’t need my money.

Ramit’s book hit me with hard, much-needed love and made me realize I was just hurting myself. I wasn’t doing any kind of activism that changes the world by “attaching it to man”. Basically, I needed to grow up and be a responsible adult.

2. Prioritize debt first

I wanted to skip many steps and dive straight into saving and investing, but the book explained to me how debt was actually costing me money. My debt was the reason for my low credit score, which meant I was paying higher deposits, higher down payments, and higher interest rates. Not only that, but trying to rent an apartment with my girlfriend or turn on the utilities was also a pain.

I had no idea that you could pay off your debts for less than the full amount before reading this book. He taught me the tactics of negotiating with creditors, explaining how financial institutions and debt collection agencies make money. Some of my collections were years old, so they were happy to accept whatever I offered.

Also, the book taught me the importance of receiving elimination payment letters to ensure that the proceeds were removed from my credit report, which I ended up needing for one of the debts I paid off.

3. Automate your system

I’m a psychology nerd, so this made sense to me. Humans aren’t that good at willpower and self-discipline by design, which is why automation is so useful. Ramit taught me how to set up my accounts and automate my system to never miss payments, save responsibly and invest.

For example, my checking account is through my stock brokerage site and I get paid by direct deposit twice a month. I also have a separate high yield savings account through a different bank (something else I learned from the book) and my credit card is through that bank as well. About two or three days after paydays, some of my money pays off my credit card balance, some go to my savings account, and some buy stock.

Above all, this is probably the most important lesson and I always help my friends create such a system.

4. Commissions and interest rates are important

Like so many people, I think about monthly payments rather than the total cost. This book has explained to me why it is the wrong thing to do. Interest adds up and that’s how banks and other creditors make money.

To put that into perspective, a $ 20,000 72-month auto loan with 10% interest will cost you an additional $ 6,677.21 in interest. Improve your credit score or bargain the interest rate up to 6% and the interest is only $ 3,864. That’s nearly $ 3,000 saved!

Now, I’m obsessed with interest calculators, and it’s the main thing I look at when taking out loans or getting a new credit card.

$10,685
Your balance after 5 years

Initial investment

$5,000

Total contribution

$2,500

5. Be a boring investor

Finally, when it comes to investing, Ramit taught me that the best thing you can do is be a boring investor. He really pierced my head and I’m grateful to him. I started investing during the 2021 bull market when everyone was trying to find the next big stock or cryptocurrency.

Ramit convinced me to invest in low-risk index funds, what if I truly I wanted to bet, do it with only a small percentage of my wallet. With the ongoing inflation woes and a potential recession, it probably saved me thousands of dollars.

Until about a month ago, I didn’t realize how much this book was helping me until I read it again. I have no pending receipts today, I owe nothing to the IRS and I actually received a refund and have money in savings. As a result, in just over a year, my credit score is now above 660. I have great interest rates on my credit cards and have even negotiated a great deal when I refinanced my car.

Ramit Sethi’s “I Will Teach You to be Rich” lessons have changed my life and I can’t recommend it enough. Not only do I teach strategies to my friends, but I am also able to help my child avoid the financial mistakes I have made in the past.

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