I Will Teach You To Be Rich by Ramit Sethi: Summary & Notes

Rating: 8/10

Available at: Amazon

Related: Rich Dad Poor Dad, The Wealthy Barber


A modern classic in the personal finance world, this is a great book for newbies to personal finance, or as a reminder for all of us that have learned the principles, but need reinforcement.


  • The single most important thing you can do to be rich is to start early.
  • People love to argue minor points about finance, partially because they feel it absolves them from getting started.
  • Instead, you need to cut through all the info and just get started.
  • Set up accounts at reliable, no-fee banks, and then automate savings, investment, and bill payments.
  • Getting started is more important than becoming an expert.
  • Spend extravagantly on the things you love, and cut costs mercilessly on the things you don't.
  • Before you start, ask yourself: why doo you want to be rich? What do you want to do with your wealth?
  • Find out your credit score.
  • Pay off your credit card always, on time. Keep your cards for a long time, keep them active, and use less than 30% of their limit (ask for a limit raise if needed).
  • Open a savings account with a good interest rate, and a separate checking account, with a low-hassle, no-fee bank. Online banks are often a good option.
  • Why a separate savings and checking account? Savings you should only be putting money in, and a checking account is what you use for money you need to spend.
  • Open your retirement and no-interest investing accounts. In the US, this is probably a 401(k) and a Roth IRA, while in Canada it's an RRSP and a TFSA.
  • You should aim to invest at least 20% of your household income per year. 10% of your take-home pay is another good target.

5 investing steps:

  • If your employer offers 401(k) matching, invest enough to take advantage.
  • Pay off your credit card and any other debt.
  • Open a Roth IRA (or TFSA) and contribute as much money as possible.
  • If you have money left, go back to your 401(k) and contribute as much as possible.
  • If you still have money left, open a regular nonretirement account and put as much as possible in there.

Yes, you do need a budget. Start with monthly fixed costs, add long-term investments, then you have guilt-free spending money. Tweak this plan as you go. Good benchmarks:

  • Monthly fixed costs: 50-60% take-home pay
  • Long-term investments: 10% take-home pay
  • Spending money: 20-35% take-home pay

Automate everything:

  • Pay your bills automatically
  • Schedule transfers to your savings account
  • Schedule transfers to your investment accounts
  • Note: think about your scheduling—when you get paid, when bills are due, etc. to make this optimal.

How to save and invest:

  • Fund managers and investment managers rarely beat the market (75% of the time they don't), take higher fees, and have incentives that aren't aligned with you (like commissions on specific investments).
  • Instead, use an index fund investment service (like WealthSimple, or WealthFront) which is low-fee, and automatically invests in a diversified portfolio of index funds.
  • As you get older, your portfolio should probably get more conservative (more bonds, less stocks).
  • Create an emergency fund for unexpected events (they WILL happen).
  • Negotiate a raise. This is one of the most effective tactics for increasing your savings long-term.
  • Buy a car with good reliability, that you will drive for at least 10 years, which has a good resale value, and is fuel efficient. And stay within budget.

Some rules for buying a house:

  • Only buy if you're planning to live there for >10 years.
  • Only buy if you can afford at least 10% down payment (20% is better).
  • Your mortgage is not your only fee. You'll have hundreds more per month in maintenance, insurance, property taxes, etc.

Want to get my latest book notes? Subscribe to my newsletter to get one email a week with new book notes, blog posts, and favorite articles.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.