About the Episode 🎙️
This is an episode of The Diary Of A CEO podcast with Steven Bartlett featuring Ramit Sethi, a personal finance expert and author of 'I Will Teach You To Be Rich'. They discuss Ramit's philosophy and practical advice on money, investing, and living a 'rich life'.
Key Takeaways 💡
- (04:34) Ramit encourages spending extravagantly on things you love while cutting costs mercilessly on things you don't care about, in order to live a rich life today and an even richer life tomorrow.
- (05:55) Understanding the basic language of money, like how much you're saving, investing, and what those investments will get you, is crucial for financial literacy.
- (27:24) Ramit recommends investing in low-cost target date funds and setting up automatic transfers, allowing your money to compound over decades through consistent investing.
- (36:02) Over 100 years, the stock market has returned around 7-8% per year after inflation. Investing modest amounts over a long period can lead to significant wealth accumulation.
- (40:02) Buying a house is often portrayed as the best investment, but Ramit argues renting can be a better financial decision in many cases after accounting for all costs.
- (49:54) Ramit advises being intentional about big purchases like houses and cars by running the numbers, as these decisions can greatly impact your lifestyle and finances.
- (51:50) Placing your skills in the right market where they are scarce can lead to much higher earnings, as Ramit's own experience illustrates.
- (1:02:11) Ramit shares his 10 money rules, including having emergency funds, aggressive investing, spending freely on passions while cutting costs elsewhere, working with respected people, and marrying the right partner.
- (1:17:21) Couples often struggle to discuss money proactively, which Ramit recommends doing regularly using techniques like complimenting spending decisions.
- (1:34:01) Designing your specific 'rich life' vision with details is crucial, as most people only have vague goals like 'freedom' that don't translate to actual spending and lifestyle decisions.