Camden and Bret sit down with Ramit Sethi, host of Netflix’s hit show, “How to Get Rich”, author of the New York Times bestseller, “I Will Teach You To Be Rich” and host of the popular “I Will Teach You To Be Rich” podcast. He is known for his unconventional insights on money psychology and his no-nonsense approach to designing and living a rich life.
Ramit’s financial philosophy is centered around several key principles, including the importance of automating your finances, using money psychology to prioritize your “money dials,” and focusing on $30,000 questions instead of $3 ones.
Topics covered include:
- What it means to live outside the spreadsheet and have a rich life
- The importance of learning how to spend, not just save and invest
- Approaching investing when you don’t come from an investment background and what to do if you are feeling behind
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David Stein: Welcome to Money for the Rest of Us. This is a personal finance show on money, how it works, how to invest it and how to live without worrying about it. I’m your host, David Stein. Today is episode 438. It’s titled, “Why Are You Investing? Defining Your Rich Life With Ramit Sethi.”
This week we have a special episode. It’s a conversation that my sons Camden and Bret held with Ramit Sethi. Some of the things they discussed: what does it mean to live outside the spreadsheet and have a rich life? The importance of learning how to spend, not just save and invest. Approaching investing when you don’t come from an investment background, and what to do if you are feeling behind.
Ramit Sethi is host of Netflix’s “How to Get Rich” and the “I Will Teach You To Be Rich” podcast. He is the author of The New York Times bestseller “I Will Teach You To Be Rich” and writes for over a million monthly subscribers on his website, iwillteachyoutoberich.com. On the website and his other work he covers psychology, personal finance, careers and entrepreneurship. We hope you enjoy this discussion between Camden, Bret and Ramit.
Bret Stein: Alright, so jumping right in. Our first question is “How should people define their rich life, and why is it important to do so?”
Ramit Sethi: Well, for me, one of the biggest tragedies is people who spend their entire lives going to work, diligently saving, investing, and when you start to ask them “What are you going to do with this money?”, they have no real answer. In fact, the answer that most of us give is a pre-rehearsed answer.
When I ask people this question, I love to ask, “What is your rich life?” Over 85% of people say the same thing. “I want to do what I want, when I want.” I go “Um, okay. Not this again.” But I go “Wow, that’s so interesting. What do you want to do?” And then they just stare at me.
Think about that—most of us have spent our entire lives going to work, saving, investing, but never really thought about what’s the purpose of it all? What is our rich life? So I think it’s incredibly important for a couple of reasons. Number one, we’ve got to have a reason we’re doing all this stuff. Otherwise, life is just one unending series of transactional decisions after another.
And second, it’s a lot more fun. It’s a lot more fun if you decide “My rich life is traveling two months a year.” Or “My rich life is buying a beautiful cashmere coat.” Or “My rich life is picking up my kids from school every afternoon.” And all of these things can be supported with time and money.
So that’s why I get people thinking about a rich life; it can totally change the contours of the decisions you’re making, of realizing, “Oh my gosh, maybe I already have saved enough.” Or “Maybe I need to invest more.” And then you can actually start living your rich life today, and living a richer life tomorrow.
Camden Stein: So part of what I really enjoy about just having read your book and listening to some of your podcast episodes is when you talk about defining your rich life and then enacting your rich life, you talk a lot about spending. And you talk a lot about how we spent a lot of time, like you said, thinking about how to get better at saving, how to get better at investing, but we don’t talk about how to get better at spending as much.
Ramit Sethi: Yeah. Well, personal finance nerds think a lot about that.
Camden Stein: That’s true.
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