Ramit Sethi’s Top 3 Tips for Getting Richer
Written by
Cara Danielle Brown
Edited by
Rebekah Evans
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Author of the New York Times best seller, “I Will Teach You to Be Rich,” host of Netflix’s “How to Get Rich “and creator of the “I Will Teach You to Be Rich” podcast, Ramit Sethi has become one of America’s gurus for all things (you guessed it) getting rich.
The best part? His advice is designed to enhance your wealth regardless of your starting position. No matter your salary, here are Sethi’s top tips for getting richer.
Automate Savings and Investments
When it comes to saving and investing, Sethi advocates auto allocating. This saves time, energy and brain space — all things that impair individuals from consistently making good financial decisions. He recommends having a specific amount or percentage taken out of each paycheck and put directly into your savings and/or investment accounts before you even see the money.
“If you don’t receive that money … you will act like you never earned it,” said Robert Johnson, chairman and CEO at Economic Index Associates. “Essentially, out of site, out of mind.” You’re creating built-in safeguards to reach financial goals.
Automation removes the natural temptation to spend money in the present rather than setting it aside for retirement, etcetera. And, because of compound interest, saving and investing as early as possible and as much as possible is key to building wealth.
Create a Debt Payoff Plan
Sethi stressed the importance of getting in control of your money so your money isn’t in control of you. And control requires a plan — particularly when it comes to unpaid, high-interest debt which compounds over time.
“Credit card debt and other high-interest debt hold you back from building wealth,” said Melanie Musson, insurance and finance expert at Clearsurance.com. “Paying it off means you can start growing your wealth.” This is because you will have more money to save and invest if the amount you owe isn’t growing.
In one of his YouTube videos, Sethi advised Googling a debt payoff calculator and plugging in your numbers to find out how long it will take you to pay off your debt making minimum payments. Don’t know your numbers? Call up your credit card company to find out your exact balance and interest rate and how much you are currently paying.
“Make them work for you.” Sethi said.
If it will take thirty years to pay off the debt, don’t cry — perhaps re-allocate an extra $100 from other places in order to pay off the debt quicker. Knowing your numbers allows you to make a plan and get in control. Sticking your head in the sand only prevents you from getting richer.
Earn More
Sometimes the most obvious advice is, in fact, the best advice. If you’re strapped for cash, there’s only so much spending you can cut — but there’s always more you can earn. You just have to know how to do it. And that involves getting very intentional.
First, Sethi recommended negotiating a raise. In order to do this, however, you must be a top performer. So establish and then exceed expectations for at least six months prior to the negotiation.
What if your existing job has no growth potential? Look for a better paying job. What’s more, Sethi said you have more leverage to negotiate your salary when starting a new job.
Finally, make money on the side. Don’t feel limited to earning only what your regular job pays you. Embrace side hustles by capitalizing on your existing skill sets or learning new ones.
More From GOBankingRates
