Importance of Financial Literacy Education – Get Some Here with Ramit Sethi’s Book, I Will Teach You To Be Rich

The following is a guest post by Jesse Michelsen of PFFirewall.com.

Education is important to me. In fact, I don’t ever plan to stop learning, regardless of the subject matters that come and go in my life. Knowledge really is power and without knowing, how can you go forward and do?

That’s why ever since I read I Will Teach You To Be Rich by Ramit Sethi, I have been promoting it and pretty much giving it away to as many people as I can (who will actually read it). It’s an amazing book that covers a ton of different topics related to personal finance. I’ll even go as far as to say that it is the best book I have ever read on the subject. Check out my full I Will Teach You To Be Rich book review for more information.

I find Ramit’s book extremely useful, not because it covers every topic on personal finance so deeply that you won’t ever need to read anything on the subject again, but because it touches on the most important topics and opens the door for your own curiosity to take you forward.

I Will Teach You To Be Rich also builds a complete financial road map for you that’s relevant to your situation regardless of your current level of knowledge or the areas of your finances that need the most attention. You can come away from reading the book knowing exactly what to do in various situations like setting your finances on autopilot, preparing for college, saving during working years, starting a family and even planning for retirement. Additionally, each chapter is self-contained with advice, time-frame guidelines and exact steps to get things completed so you can skim through and cherry pick nuggets of information that you need now.

The book is also very entertaining. The author, Ramit Sethi, is a young hip college grad with a degree in Psychology from Stanford University. His writing style is fresh and fun, and he uses stories from real people he’s encountered who use his advice and live life the way that they want to.

My readers over at Personal Finance Firewall have heard me rave about the book enough so I wanted to give someone else an introduction to it and a chance to win it here. As a short teaser, below is one of my favorite tips from the book, as well as giveaway information for your chance to win.

The Tip: Use credit cards in a smart way. Credit is a huge part of our lives so you can’t really go without using it if you ever plan to buy a house or get a loan. Building a solid credit score and history from the get-go can save you hundreds of thousands of dollars throughout your life. Here are six steps to manage and improve your credit, all of which have additional detail and help in the book:

  1. Pay off your card regularly.
  2. Get all fees waived on your card.
  3. Negotiate a lower APR.
  4. Keep your cards for a long time and keep them active.
  5. Get more credit. (Warning! Do this only if you have no debt.)
  6. Use your rewards!

Book Giveaway – Win a Free copy of I Will Teach You To Be Rich.

To enter to win a free copy of I Will Teach You To Be Rich, simply drop a comment on this post and let us know what the next step in your life might be. [Kevin] I will be matching Jesse’s generous offer with a free copy of my own. So, there are two copies to be won! For example, if you are a high school kid trying to get a head start on college, let us know. If you are an avid amateur financier and your next step is retirement, you have some bragging rights so get to it.

The contest will run for 10 days at which point Kevin and I will pick two winners from the comments.*

*The contest has now closed; thanks for your participation!

Image by seeveeaar


Jesse Michelsen is the owner of Personal Finance Firewall, where he writes with a burning passion for personal finance.

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Comments

  1. Jamie says

    The next step is retirement in 44 months and 12 days (but I’m not counting). Retirement means leaving full time work to work 1n my own business.

    • says

      Jamie,
      I agree with your definition of retirement. That’s personally the way I would approach it, too (though maybe I would do it part-time, or maybe I would spend some time on and some time off, but I certainly wouldn’t *just* sit around, doing nothing). I wish you the best of luck!

      • Jamie says

        My regular job is an all or nothing situation. I have to work full time in a shift rotation or leave. Job sharing for a few years would be nice but not sanctioned by my employer. My business is already full time 7 days a week. Retiring would drop my work week to 20-30 hours in the winter and 60 in the summer (someone hads to catch all those salmon).

  2. says

    I don’t think I’ll ever stop learning either. If I see a book about finance, I am immediately drawn to it.

    With each parcel of information I learn, I pass it on to my readers in a new article! If I would have the opportunity to win this book, I would not be the only one impacted by it’s words, but my readers would as well.

    Thanks for the chance!

  3. Tom says

    I am always looking for more information regarding finances. I figure knowledge is power, and I always want more power.

    • says

      Knowledge allows you to have power over your own life, and to have a better vision and understanding of where your destiny lies, and how to get there and take control into your own hands. Interesting thoughts!

  4. says

    I love learning and cannot overemphasize its importance to me. Financial education is largely not taught, so literacy is critical as it impacts so much of our lives.

    Personally, we are debt-free, solvent, and aggressive investors. I do not anticipate any strategic changes next year although the investment vehicles may change.

    • says

      You’ve definitely been doing a great job in sharing all that you’ve learned with others. Debt-free over here except for the mortgage, but that is the biggest debt of all!

  5. says

    I’m a huge advocate for financial literacy. I’m actually thinking of planning a “How to budget” curriculum and offering to teach a free course or two at a local high school.

    This year my goal is to save a minimum of 15% of our income. I’m really behind on my savings goals (though I’m right on target with paying off my debt, so I was partially successful this year) and want to focus on saving this year.

    • says

      Paying down debt is also saving money, so that’s still good. :) I’m shocked as to why sound economics and financial advice is not taught at the high school level. We really need to be pushing this information out. If you could help out some people with this, then why not?

  6. says

    Would love to get a copy of this book.
    Our next step? For 2011 we will actually starting the 10% off every pay as per The Wealthy Barber and investing this money in tax free accounts. Actually, we’re planning to do 20%. For the end of 2010 we plan to donate $1000 as we can afford it – and we’ll get almost half of that money back in tax returns. Win Win!

    • says

      Donating $1000 is a noble thing to do, and saving 10% is a good place to start. In fact, I consider it the bare minimum! So, 20% is even better. :)

  7. says

    Yes! My library has a copy and I just put it on my requests list.
    Everyone can always learn something more about finance. It’s too bad, school doesn’t teach more basic financial concepts.

    • says

      Nice! If you can grab it from the library then that’s a pretty good option; hope you don’t have to wait too long! I agree with you about the poor state of financial and economic education in the schools.

  8. says

    I’m an engaged 20 year old who’s looking to increase her net worth. I’m working full time and trying to give my best to my job, and earn additional income. I’m also looking to become a first time home buyer, have a frugal wedding, and eliminate my $4,000 credit card debt.

    • says

      Seems like you have your priorities pretty well set for a 20 year old! At that age I was a long ways away from all of those things. I wish you the best of luck.

  9. Jennifer says

    I would love to be considered for this book giveaway! I devour personal finance information and have really been wanting to read this.

    My next step financially is figuring out if it’s worth it to take a lower-paying but less stressful job. We have no debt other than our mortgage, an emergency fund, paid off cards, etc. and can live off my husband’s salary if we had too, but the idea of quitting for a lower paying job is stressing me out to no end even though I think I’d ultimately be happier. Just hard to pull the trigger.

    • says

      Inaction is also acting, so you also have to ask yourself… is the risk of being stressed out by staying in my current job worth the extra money? Gotta evaluate all of the scenarios! Hope you come to the right decision.

  10. Jeff says

    I’m definitely what you call financially illiterate. I make good money, but i don’t know what to do with it. My wife and I just got married, bought a house and had our first son all in 13 months. So what now? How to I make my money work for me to pay for college, plan for retirement, provide for my family and live life?? please help…

    • says

      You seem to have a warm heart, as most people who care for animals tend to. That’s very interesting… I’d like to hear more about that as it progresses.

  11. Mike says

    Ramit’s site has a lot of great posts and sometimes he gets into some really behavioral topics. I haven’t picked up this book yet, but after your review, I think I will. Nice review Kevin!

    • says

      Thanks, though the credit really goes to Jesse! He has really been promoting this book, and I gotta thank him for sending me a copy, myself.

  12. says

    I heard Ramit Sethi interviewed on a podcast (forgot which one). Very smart, very engaging guy. Next money steps for 2011? Spend more time on my portfolio, and plant an orchard.

    • says

      How much time do you think before you (literally) see the fruits of your labour? Something about working and living off the land has always interested me, though currently I live in the middle of the city. There’s always the community garden.

  13. says

    I have been hearing great things about this book for a long while now. Thanks for the guest post.

    I’m trying to solidify my monthly income and slowly pull myself away to bring myself more free time for hobbies and volunteer work… That is the plan.

    • says

      How much longer will you be staying in Egypt do you think? Any itches to start exploring some new areas? Something about your lifestyle that I find pretty fascinating, in that you’ve been to quite a few places already and thus have experienced many different things.

  14. Marianne O says

    What to do next — yikes! There is so much to do that I hardly know where to start. Write our wills (probably top priority as we have young kids); fund our (currently almost empty) TFSAs as an emergency fund; possibly bump up our RRSP savings in order to reduce net income, to continue to qualify for some subsidies that we’re receiving . . . lots and LOTS to do.

    • says

      Definitely take care of the wills and life insurance! I’m not decided between RRSPs and TFSAs myself, but if you can do both, then why not. The downside of the RRSP is that you can’t touch the money for a long time, and you will then be taxed as if it was income…

  15. says

    Education is the most important thing in life. Continual self-education is the state most adults should be in. As Dylan says: he who is not busy being born is busy dying. Education is the perpetual rebirth of the mind.

    • says

      I really like this quote and your comment, and have to agree with it completely. The thing for me is that the more I learn, it feels like the less I know, since I realize just how large the space is and how much more I can learn. That continues to drive me on.

  16. says

    I agree with your thoughts Jesse. If you stop teaching yourself and learning, what is the point of growing older? I would become bored with life if i wasnt constantly improving myself and learning how to live differently or better. I do this especially because if you dont use your brain you’re likely to develop dementia! cheers!

  17. SophieW says

    I’m still working on paying off my car loan, but only 10 more months to go! After that (with all my debts except for my mortgage taken care of) my next step will be preparing for my next career. I’ve been in the military for 20 years and have come to realise I don’t want to do it for another 20 – I just don’t find it fulfilling any more. So for the next little while I will be taking courses and preparing to step out into the world. Scary but exciting :)

    • says

      Change can always be a little frightening, but it’s only because we fear a little bit of what we don’t know. Sometimes change is needed lest we get too comfortable where we are and stop growing.
      Good job on paying down the car loan, and I wish you the best of luck!

  18. says

    My next step in life…Well my oldest will be starting college in 18 months, and will have another 2 years later, and another 2 years after that. I have to figure out balancing paying for college and making the kids feel somewhat financially responsible for their education so they feel some accountability.

    I would love if my house was paid-off before my son leaves for college, but that will not be possible. When I am 52, my house will be paid off and all my kids will be out of college (assuming they don’t go on to graduate school). So I will go from having a lot of expenses, to having very little. It will be an odd transition, that is for sure.

    • says

      Why not pay part of the tuition but ensure all luxuries are accounted for by them, and encourage them to do internships/etc…? I guess, find the bowl of porridge that’s just the right temperature.

      P.S. Just how old are you? 😛 That might be a good time to think about getting into traveling shape and going backpacking for a while… or even throw in a couple of nice cruises here and there. 😉

      • says

        Well I have purchased books on how to get scholarships and such. My oldest son is great at Forensics (that is a public speaking thing) and there are other avenues he can pursue. His job this Christmas break his to figure out how he can help finance college. It will not be a free-and-easy trip for him for four years, that is for sure.

        My daughter’s goal in life is to get a free ride to college. She is also an amazing athlete. I know that she will do whatever it takes to try and help cover college.

        My youngest son, well, he is a goofball. He still tries hard, but riding his bike through the woods or playing soccer is his priority, and that is ok. He is just 12 and he doesn’t need all the pressure on him yet.

        I am 43. I love the outdoors and traveling is high on my list to do. If I could just get rid of the asthma, I could tolerate quite a few more things. You do raise a good point though. As my kids are getting older, I am realizing that ‘my’ life will be returning in the not-too-distant future. I need to prepare to have a life of my own. I would love if I could just blog and take my computer with me and travel all over. But my husband will probably have to work until he is 54 or so. We will still work in some travel before that point.

        Wow, that was long-winded. Sorry for that.

        • says

          Nah, I’m always happy to receive long and well-thought out comments.

          I think that 50 is going to be the new 30, especially by the time you get there. My girlfriend’s parents are right about that age range and preparing to spend the rest of their lives semi-travelling: 6 months here and 6 months back in their home country.

          I think you’re doing a great job with your kids from what I have read, and there is certainly a lot to look forward to. It will feel somewhat funny to adjust for sure, but you’ll also enjoy a new-found freedom.

          Everyday Tips and Thoughts will continue to expand along the way, I’m sure, so the whole “bring your laptop with you” thing might just work out at some point. 😉

  19. says

    I am in college now, planning on having my own business once my degree is achieved. I am a single mother of two with no credit cards and no intention of getting any! My only credit/debt right now is my car loan.

    • says

      Credit cards are ok if you pay them off every month, but if you really don’t need them, that’s fine, too. In fact, I commend your reluctance to assume debt, as it’s a good attitude to have in an uncertain world! Good luck on the degree and the new business!

  20. says

    Hey, I want to learn how to be rich! LOL
    Well, my next step should be and will be to pay off that damn credit card! Then the car. Then buy a small house, furnish and decorate it, get another pug and max out 401K for both Beaker and myself. And take a nice vacation somewhere in between achieving it all. :-)

  21. says

    Hmmm…. I think my next step is to also “retire”, but in 2017, while consistently building up the Yakezie brand and Financial Samurai.

    I really don’t see a reason why I won’t be able to comfortably live off my online efforts, while helping others earn more in the process, and give back to students and other folks in need if I/we keep at it for 6.5 years.

    I believe.

    Best,

    Sam

    • says

      You’re still a pretty young guy, right? Having that level of financial freedom at 40 or so would be amazing, if not even earlier. I hope you get there Sam; in fact, I’m pretty sure that you will.

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  1. […] Invest It Wisely: Importance of Financial Literacy Education […]

  2. […] I’d also recommend checking out Invest It Wisely’s Review of Ramit’s Book here Importance of Financial Literacy […]

  3. […] won a copy of “I Will Teach You To Be Rich” by Ramit Sethi in a contest sponsored by Kevin @ Invest It Wisely and Jesse @ PF Firewall.  First of all, wow! I haven’t won anything in a contest in donkey’s […]