Tuesday, May 26, 2009

I Will Teach You to be Rich by Ramit Sethi

I try to read as much about personal finance as possible - call it a weird hobby. I became interested in the topic when I was $50,000 in debt ($25K credit card debt and $25K student loan debt). Back then, I was eating out all the time, buying things I didn't need (pool table, candles from the Yankee Candle Company, etc.), and I was in a rush to have my own apartment after graduating from college (new furniture and groceries add up when your APR is 16.9%). After educating myself, playing the transfer balance game properly, and after a lot of sacrificing, I was about to get out of debt in 5 years.

I recently read I Will Teach You To Be Rich by Ramit Sethi and it was one of the best Personal Finance books I have ever read. Ramit Sethi is the co-founder of PBwiki and has a blog by the same name as his book www.iwillteachyoutoberich.com Although I didn't learn anything (I'm a self proclaimed expert on debt and budgeting), its a great intro book for those new to the topic, people in debt who realize its time to get out, and college students who recently graduated. The book is easy to read (no boring financial jargon), the author has a sense of humor, and he does not talk down to the reader. Here are a few of the topics covered in the book:
  • Actual scripts that you can use with your credit card company to negotiate a lower APR or your bank to waive overdraft fees (this alone will more than pay for the price of the book in minutes)
  • Opening up an online savings account through ING Direct or HSBC (no maintenance fees, the highest interest rates, and you can set up automatic savings)
  • Automating your financial life: automatic bill paying and setting up savings plans for vacations, your wedding, and Christmas
  • Taking advantage of your employer's 401K plan and how/when to set up a Roth IRA
  • Picking the right credit card reward program

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