Would You Rather Be Sexy or Rich?
Why do people get fat after college? The eerily similar guilt about spending and not working out • Counterintuitive but true: We need less personal-finance information • Common excuses for not managing money • Stop debating minutiae and get something done • The key messages of I Will Teach You to Be Rich • “Rich” isn’t just about money: What does it mean to you?
Optimize Your Credit Cards
How to beat the credit card companies at their own game
Why Indian people love negotiating • How credit can help you be rich • Picking the best credit card for airline miles, cash back, and rewards • Getting a card when you have no income • The six commandments of credit cards • How to negotiate with your credit card company to get fees waived and receive lower rates • Why you should always buy electronics, travel, and furniture on your credit card • What not to do with your cards • The burden of student loans • When credit cards go bad • Five steps to ridding yourself of debt • Week One: Action Steps
Beat the Banks
Open high-interest, low-hassle accounts and negotiate fees like an Indian
Why old people are afraid of online banks—even though they offer the best new accounts you can get • How banks rake it in • Why you really need a separate savings account • Opening high-interest, no-fee accounts • Five marketing tactics banks use to trick you • My personal favorite accounts • Negotiate out of fees with your current bank (use my script) • Week Two: Action Steps
Get Ready to Invest
Open your 401(k) and Roth IRA—even with just $50
Why your friends probably haven’t invested a cent yet • Investing is the single best way to get rich • The ladder of personal finance • Everything you need to know about your 401(k) • The importance of crushing your debt • Why everyone should have a Roth IRA • Week Three: Action Steps
How to save hundreds per month (and still buy what you love)
Spend less—without making a detailed, irritating budget • The difference between cheap and frugal • Conscious spending: how my friend spends $21,000 per year going out—guilt-free • Using psychology against yourself to save • The four buckets: fixed costs, savings, investments, and guilt-free spending money • The envelope system for not overspending • How to make more money • Handling unexpected expenses • Week Four: Action Steps
Save While Sleeping
Making your accounts work together—automatically
The power of defaults: Give yourself fewer choices • How to spend only three hours a month managing your money • Where does your next $100 go? • Setting up a bill-pay and transfer system that works for you • Consultants and freelancers: What about irregular income? • Week Five: Action Steps
The Myth of Financial Expertise
Why professional wine tasters and stock pickers are clueless—and how you can beat them
We’ve been tricked by “expertise”—why financial “experts” can’t even match the market • You can’t time the market • How experts hide their poor performance • You don’t need a financial adviser • Pundits worth reading • Most mutual fund managers fail to beat the market • Why I love index funds
Investing Isn’t Only for Rich People
Spend the afternoon picking a simple portfolio that will make you rich
What’s your investor profile? • The beauty of automatic investing • Asset allocation: more important than the “best stock of the year!” • Convenience or control? You choose • The many flavors of stocks and bonds • Creating your own portfolio: How to handpick your investments • Investing the easy way: lifecycle funds • Feeding your 401(k) and Roth IRA • The Swensen model of asset allocation • Week Six: Action Steps
You’ve done the hard work: Here’s how to maintain (and optimize) your financial infrastructure
Feed your system—the more you put in, the more you’ll get out • Ignore the noise • The tricky part of managing your own portfolio: rebalancing your investments • Don’t let fear of taxes guide your investment decisions • When to sell • For high achievers: a ten-year plan • Giving back—an important part of being rich
A Rich Life
The finances of relationships, weddings, buying a car, and your first house
Student loans—Pay them down or invest? • Don’t let your parents manage your money • Role reversal: How to help when it’s your parents who are in debt • The big conversation: talking about money with your significant other • Why we’re all hypocrites about our weddings (and how to pay for yours) • Negotiating your salary, I Will Teach You to Be Rich style • The smart person’s guide to buying a car • The biggest big-ticket item of all: a house • The benefits of renting • Is real estate really a good investment? • Planning for future purchases • Parting words (cue the violins)
WOULD YOU RATHER BE SEXY OR RICH?
I’ve always wondered why so many people get fat after college. I’m not talking about people with medical disorders, but regular people who were slim in college and vowed that they would “never, ever” get fat. Five years later, they look like the Stay Puft Marshmallow Man after a Thanksgiving feast, featuring a blue whale for dessert.
Weight gain doesn’t happen overnight. If it did, it would be easy for us to see it coming—and to take steps to avoid it. Ounce by ounce, it creeps up on us as we’re driving to work and then sitting behind a computer for eight to ten hours a day.
It happens when we move into the real world from a college campus populated by bicyclists, runners, and varsity athletes who once inspired us to keep fit (or guilted us into it). When we did the walk of shame back at school, at least we were getting exercise. But try talking about post-college weight loss with your friends and see if they ever say one of these things:
“Don’t eat before you go to bed, because fat doesn’t burn efficiently when you’re sleeping.”
“If you eat mostly protein, you can lose lots of weight quickly.” “Eating grapefruit in the morning speeds up your metabolism.”
I always laugh when I hear these things. Maybe they’re correct, or maybe they’re not, but that’s not really the point.
The point is that we love to debate minutiae.
When it comes to weight loss, 99.99 percent of us need to know only two things: Eat less and exercise more. Only elite athletes need to do more. But instead of accepting these simple truths and acting on them, we discuss trans fats, diet pills, and Atkins versus South Beach.
WHY ARE MONEY AND FOOD SO SIMILAR?
Most of us fall into one of two camps as regards our money: We either ignore it and feel guilty, or we obsess over financial details by arguing interest rates and geopolitical risks without taking action. Both options yield the same results— none. The truth is that the vast majority of young people don’t need a financial adviser to help them get rich. We need to set up accounts at a reliable no-fee bank and then automate savings and bill payment.
We need to know about a few things to invest in, and then we need to let our money grow for thirty years. But that’s not sexy, is it? Instead, we watch shows with talking heads who make endless predictions about the economy and “this year’s hottest stock” without ever being held accountable for their picks (which are wrong more than 50
percent of the time). Sometimes they throw chairs, which drives up ratings but not much else. And we look to these so-called “experts” more than ever in turbulent times like the global crisis of 2008. “It’s going up!” “No, down.” As long as there is something being said, we’re drawn to it.
Why? Because we love to debate minutiae.
When we do, we somehow feel satisfied. We might just be spinning our wheels and failing to change anyone’s mind, but we feel as if we are really expressing ourselves, and it’s a good feeling. We feel like we’re getting somewhere. The problem is that this feeling is totally illusory.
Focusing on these details is the easiest way to get nothing done. Imagine the last time you and your friend talked about finances or fitness. Did you go for a run afterward? Did you send money to your savings account? Of course not.
People love to argue minor points, partially because they feel it absolves them from actually having to do anything. You know what? Let the fools debate the details. I decided to learn about money by taking small steps to manage my own spending. Just as you don’t have to be a certified nutritionist to lose weight or an automotive engineer to drive a car, you don’t have to know everything about personal finance to be rich.
I’ll repeat myself: You don’t have to be an expert to get rich. You do have to know how to cut through all the information and get started—which, incidentally, also helps reduce the guilt.