In the personal finance world, few experts are revered as much as Dave Ramsey. In the beginning, his Total Money Makeover helped me find my true north for the next chapter in my life. I have been following the 7 Baby Steps with a few adaptations for the past 12 years. But I never stop learning.
What has new information has persuasded my change?
I have learned fresh new ideas from others like Ramit Sethi. His book I Will Teach You to Be Rich is a new re-readable classic for me. Is it just a case of confirmation bias? Could be… Or is it a case of being exposed to new ideas and adapting them to my own personal DNA?
I had realized back in 2009 that credit cards are not the cheetahs Dave Ramsey says they are. They are financial tools that — when used properly — enhance our financial lives. I don’t think I’ve paid for a McDonald’s breakfast sandwich with coffee in over a year thanks to the AppleCash on my AppleCard. Once a month, we enjoy a free meal at Applebee’s or Panera with Discover cash-back bonuses. And it’s great to fly free on American by signing up for a new Barclay Red Aviator card and making one purchase before canceling it every other year.
What is the rich life?
Ramit Sethi writes about selecting banks and credits cards based on benefits that speak to our rich life. “Rich life” is Ramit’s term for living our lives while we take care of our finances. Some gurus tell us to scrimp and save while eating beans and rices until our financial independence ship arrives. Critics (like Tim Ferriss) call this “the delayed life” plan. Honestly, is that any way to live? This is not a dress rehearsal for our next time around. Add to this the number of people I know who have croaked just as they were getting ready to live like no one else, and I am more inclined to live my rich life.
But what is your rich life? How do you define your rich life? Most people would say it’s being able to do what they want when they want. But what do they want? We all know how to divest premium cable channels, subscriptions, and big car payments. But what would we do if we had freedom of time? What is your rich life?
Money Dials
When you read this book, you will also love the money dials. Ramit has identified about a dozen areas in life he calls money dials. These are things like convenience, travel, dining out, clothing, electronics, watches, and cars. We should not be afraid to spend extravagantly on the things we love as long as we are prepared to cut mercilessly on the things that are not important to us.
The author (Ramit Sethi) is known to say that he spends lavishly on things that make his life more convenient. For us maybe that’s calling ahead to Walmart to avoid the crowds. Or it could be using Door Dash to avoid travel time and waiting to be seated at a restaurant. Maybe it’s hiring a cleaning service, so we do not have to clean on the weekends.
So challenge yourself with identifying your rich life and learning your money dials.
Investing
Like me, Ramit urges us to invest as much as we can — at least 10%, preferably 20%. Spending lavishly is easier if you don’t have credit card debt, have a year’s worth of cash on hand, and have automatic investing set up.
He also recommends using Vanguard index funds which are also my personal choice in my Roth IRA. Not only are they low cost, but they are way less volatile than investing solely in individual stocks. In addition to broad markets, you can use Vanguard’s various sector funds, most of which are available as either mutual funds and ETFs.
So maybe “outgrow” was a poor word choice. But we should never stop learning new distinctions that can help us with our personal finances. The more information we can assimilate, the better our own personal finance picture can be. The hard part can be deciding which info to use. So determine your own rich life and know your money dials. Call a coach (like me) if you need help putting it together.
So what is your rich life?
Respond in the comments below about your rich life.
As Always…
Thanks for reading! I hope this information provides food for thought. Remember that I am not a certified financial planner, a certified public accountant, a licensed real estate agent, etc. My content is for educational purposes. I am a math educator who happens to have a finance degree. Like they say, never take financial advice from a math teacher! (Do they really say that?)
But you should spend less than you earn, invest the difference, and stay out of debt!
I would so appreciate your sharing my content with anyone you feel could benefit. And if you would like a free exploratory conversation or just want to shoot the breeze about personal finances, call me and leave a message or send a text to 570-731-0425.