This is the first in my series of book reviews. And it's a quick one!
I’ve read several personal finance books lately. I Will Teach You To Be Rich is a very readable, fun, and practical guide targeted at college-aged readers to get them started off on the right foot financially. I wish I had read it 10 years ago-- I certainly would be farther along the road to financial abundance today if I had. Here are my main take-aways:
- Set up an online savings account. I took his advice and set up an Ally Savings account online, which gives me 1% interest right now instead of the 0.0000001% I’ve been getting from my Wells Fargo savings account and my Charles Schwab money market account. Over the long term, that will translate into hundreds if not thousands of extra dollars. If you haven’t done it already, just do it today. It’s easy money.
- When buying a car, get salesmen into a bidding war, without even leaving the comfort of your home. Ramit Sethi did this by faxing 17 different car salesmen at the end of December, when many were desperate to meet their quotas. A little work on the front end will result in a great deal.
- Target-date (also known as Lifecycle) index funds really are the simplest way to invest well. I’ve been investing in a Vanguard Target 2050 fund in my Roth IRA for the past few years, and am glad I have. It’s hands-off, automatically rebalancing, and stress-free. For now, that’s the only kind of fund I plan to invest in. Down the road, I’ll probably get a little fancier, but it’s the perfect vehicle for investing for someone like me who just wants an automated, super-low-load vehicle for my investments.
- Right now, paid financial advisors are not worth the cost. In fact, NerdWallet has a free app where you can ask a financial advisor any question, anytime, for free. Which is what I’ve done. I’ve also talked to several other financial advisors over the last few weeks, and they’ve all confirmed that what I’m doing is pretty much optimized.
There are plenty of other topics he covers in the book, like credit cards (good for the rewards if you always pay them off), 401(k)s and IRAs (which I’ve been maxing out the last few years), budgeting tactics (which Mindy and I are developing right now), automating, negotiating a raise, buying a house, and real estate. Though his treatment of these areas is overly superficial, you’ll probably pick up a few pearls-- and it’s a quick read. I’m glad I borrowed it from the library instead of buying it, because I knocked it out in a couple hours and don’t feel the need to ever pick it up again. Plus, most of the information and much more is probably available on Ramit’s website, iwillteachyoutoberich.com.
The book certainly has its limitations and blind spots-- see Mr. Money Mustache's book review at mrmoneymustache.com for more on that. Overall, the book was helpful but not life-changing. If you’re looking for an easy introduction to personal finance or to pick up a few tips that might have escaped you in your financial journey, give it a look!