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Book Summary: I Will Teach You To Be Rich

In this book summary of I Will Teach You To Be Rich, you’ll learn why spending extravagantly on the things you love and mercilessly cutting costs on the things you don’t can make you feel rich.

“Spend extravagantly on the things you love, and cut costs mercilessly on the things you don’t.” – Ramit Sethi

You will feel rich if you “spend extravagantly on the things you love and cut costs mercilessly on the things you don’t.” For some, splurging on high‐end gym clothes, a membership at a nice gym, and a few expensive in‐person exercise classes a month make them feel richer than living in a huge apartment. Whatever your three to five things are, embrace them ‐ be unapologetically different. If someone thinks it’s ridiculous to spend what you spend on the few things or experiences you value most, that’s their problem.

Once you identify the three to five things or experiences you want to spend extravagantly on, reframe your desire to save money in all other areas as a positive quality by stating:

“I am frugal with X so I can freely spend on Y.”

For example, “I’m frugal at restaurants and bars so I can freely spend on live performances,” or “I’m frugal with hotels so I can freely spend on experiences when I travel.” Such statements show you know what you want and are thoughtful with your money – hard not to respect that. Take a few minutes to write down a few “frugal with X so that I can freely spend on Y” to clarify what matters to you and become a more conscious consumer.

Book Summary: I Will Teach You To Be Rich

Spending Frameworks

It’s paradoxical, but by allowing yourself to spend freely in a few areas you genuinely value, you tend to save more overall because you don’t feel deprived and buy unnecessary things to feel better. But spending extravagantly does not mean you have an unlimited budget. Extravagant spending means spending freely within a framework that lets you feel like you can enjoy the things you love, guilt‐free and without being reckless. Here are three spending frameworks I found to be immensely helpful:

  1. Start cheap and end high‐end: Start with a low‐cost version of what you want and allow yourself to buy more expensive versions with use. When I wanted to learn guitar, I started with a $20 used guitar from my friend and only allowed myself to upgrade if I played it consistently for 30 days. After 30 days, I upgraded to a $200 guitar that felt like a $1,000 guitar in comparison.
  2. The envelope system: Each month, withdraw a predetermined amount of cash from your bank account and place it in an envelope for each thing or experience you want to spend extravagantly on (alternatively, load prepaid debit or gift cards). Spend the money in the envelopes guilt‐free. Once the money is gone, you must wait until next month to resume spending.
  3. The seven‐day rule: When you want to buy something in your extravagant spending domain, write an email that will bounce back to your inbox in seven days describing what you want to buy and how badly you want it. When you receive the email seven days later, ask yourself, “Is it still worth the money? Do I still want it as much as I did seven days ago?” If not, pass on the purchase because if you are less enthusiastic seven days later, you won’t care about it 30 days later.

Negotiating a Higher Salary

If you tried cutting costs and putting in these frameworks but still feel like you don’t have enough money to live a rich life, Ramit Sethi suggests you cut costs to about 85% of optimal and then go on offense and negotiate more money into your life. When you start a new job, you have an opportunity to negotiate a 5‐10% salary increase with a small amount of effort and quickly get yourself a few thousand dollars in additional spending power. Here are four proven salary negotiation mindsets and tactics:

  1. Go into a negotiation with a job offer from a different company. If the offer is from a lesser company, don’t mention their name. Instead, just say, “I have another offer and I’m looking for a higher salary.” If you have an offer from a rival company that pays well, mention their name so the two companies get into a heated bidding war.
  2. Create a plan to demonstrate how you’ll contribute to the company’s success. Research projects the company is working on or might work on, and then detail how you can become a critical resource on those projects. They will pay you more when they know you’ll bring in more value.
  3. Remember to keep the conversation cooperative and not combative. Your tone, demeanor, and language should all communicate, “I’m excited to work with you and bring a lot of value to this team, but I’m a very valuable employee and I want to make sure my compensation is fair.”

Negotiating a Raise

If the negotiation doesn’t go as planned or you’re not interested in finding a new job, here’s exactly how you can negotiate a big raise in six months:

  1. In a performance review with your boss, ask, “What would be the three most impactful things I could do to become a top performer?”
  2. Create three six‐month goals based on their response. Then say, “If I hit these three goals, would you peg me as a top performer?” After they say yes, conclude by saying, “If I do an extraordinary job, I’d like to sit down to discuss a possible compensation adjustment, but we can address that topic when the time comes. Sound good?”
  3. Send a follow‐up email after the meeting detailing your six‐month goals and try to exceed those goals.
  4. Five months later, email your boss to set up a meeting 30 days out to discuss your performance and compensation (extra credit: ask a coworker to send your boss an email detailing your contribution to a recent project).
  5. Go to the meeting with the email detailing your initial goals, a list of recent accomplishments, your desired salary, and a list of comparable salaries from Be bold and stand your ground if there is pushback. You’re not asking for a favor; you’re discussing fair compensation as a professional.

About the author

Ramit Sethi writes about money, business, and psychology for a million readers each month at He’s been featured in Fortune, the New York Times, the Tim Ferris podcast, and the Wall Street Journal. He studied technology and psychology at Stanford and lives in New York.


Finance, Money, Personal Finance, Self Help, Success, Motivation, Self-Esteem, Wealth, Psychological aspects, Relationships, Personal Growth, Business, Investing

Table of Contents

An Open Letter to New Readers 1
Introduction: Would You Rather Be Sexy or Rich? 6
Why do people gain weight after college? The similarities between money and food
Counterintuitive but true: We need less personal-finance information
Common excuses for not managing money
You’re not a victim-you’re in control
Stop debating minutiae and focus on the Big Wins
The key messages of I Will Teach You to Be Rich
“Rich” isn’t just about money: What does it mean to you?
Chapter 1 Optimize Your Credit Cards 23
How to beat the credit card companies at their own game
Why Indian people love negotiating
Stop being intimidated by your credit cards
Picking the best card for airline miles, cash back, and rewards
The six commandments of credit cards
How to negotiate with your credit card company to get fees waived and receive lower rates
Secret perks your card offers
Why you should always buy electronics, travel, and furniture on your credit card
What not to do with your cards
The burden of student loans
When credit cards go bad
Five steps to getting rid of debt
Week One: Action Steps
Chapter 2 Beat the Banks 69
Open high-interest, low-hassle accounts and negotiate fees like an Indian
How banks rake it in
The bank accounts I use
Why you really need a separate savings account
Opening high-interest, no-fee accounts
Why people stick with terrible bank accounts
Five marketing tactics banks use to trick you
Negotiate out of fees with your current bank (use my script)
Week Two: Action Steps
Chapter 3 Get Ready to Invest 94
Open your 401(k) and Roth IRA-even with just $50
Start investing, step by step
Why your friends are scared of investing
Investing is the single most effective way to get rich
Where should your money go? Introducing the ladder of personal finance
Mastering your 401(k)
Crush your debt
The beauty of Roth IRAs
What about robo-advisors?
The exact account I use
Feed your investment account
Beyond retirement accounts
Week Three: Action Steps
Chapter 4 Conscious Spending 126
How to save hundreds per month (and still buy what you love)
How to spend extravagantly on the things you love and cut costs mercilessly on the things you don’t-without making an annoying budget
The difference between cheap people and conscious spenders
How my friend spends $21,000 per year going out-guilt-free
Using psychology against yourself to save
The four buckets: fixed costs, savings, investments, and guilt-free spending money
The envelope system for not overspending
What if you don’t make enough money to save?
How to make more money
Handling unexpected expenses
Week Four: Action Steps
Chapter 5 Save While Sleeping 167
Making your accounts work together-automatically
The power of defaults
How to spend only 90 minutes a month managing your money
Ways to use psychology to help you save money
Create your automatic money flow
Using your automated finances to fuel your rich life
Week Five: Action Steps
Chapter 6 The Myth of Financial Expertise 188
Why professional wine tasters and stock pickers are clueless-and how you can beat them
Who should you trust?
Experts can’t guess where the market is going
How experts hide poor performance
You don’t need a financial adviser
Behind the scenes: When two wealth managers tried to recruit me
Active vs. passive management
Chapter 7 Investing Isn’t Only for Rich People 212
Spend the afternoon picking a simple portfolio that will make you rich
The beauty of automatic investing
Asset allocation: more important than the “best stock of the year!”
Retiring in your 30s or 40s: The FIRE movement
Convenience or control? You choose
The many flavors of stocks and bonds
Creating your own portfolio: How to handpick your investments
Investing the easy way: target-date funds
Feeding your 401(k) and IRA
The Swensen model of asset allocation
Insane crypto “investments”
Week Six: Action Steps
Chapter 8 How to Maintain and Grow Your System 260
You’ve done the hard work: Here’s how to maintain (and optimize) your financial infrastructure
Feed your system-the more you put in, the more you’ll get out
Ignore the noise
The tricky part of managing your own portfolio: rebalancing your investments
Nutty beliefs about taxes
When to sell
For high achievers: a ten-year plan
Giving back-an important part of being rich
Chapter 9 A Rich Life 282
The finances of relationships, weddings, buying a car, and your first house
Student loans-Pay them down or invest?
How to help parents who are in debt
The big conversation: talking about money with your significant other
Should you sign a prenup?
Why we’re all hypocrites about our weddings (and how to pay for yours)
Negotiating your salary, I Will Teach You to Be Rich style
The smart person’s guide to buying a car
The biggest big-ticket item of all: a house
The benefits of renting
Is real estate really a good investment?
Planning for future purchases
Your Rich Life: Going beyond the day to day
Acknowledgments 335
Index 336


As seen on the new NETFLIX series! What’s Your Rich Life? An interactive journal from the bestselling author of I Will Teach You to Be Rich

If someone asked you that question, would you know the answer? Most of us have never thought about what our Rich Life looks like beyond “Doing what I want, when I want.” Or, we’re told all our lives to save…but then what? How do we enjoy the results?

Using this journal, you can finally give yourself the time to design your Rich Life. Work through eye-opening exercises and powerful prompts to understand how to:

  • Get to the root of your money beliefs and rewire them for the next chapter of your life.
  • Ask $30,000 questions instead of $3 ones.
  • Identify your Money Dials—the things you love spending on, like travel, eating out, health, or convenience—and develop a plan to spend more on what matters to you most.

Once you know what your Rich Life looks like, you can start to live it. No more vague goals. No more procrastinating. Just beautiful, detailed vision and the confidence to make it real.
So find a quiet room, grab a cup of coffee, and let’s get to work.


“Don’t let the breezy, irreverent style of this book fool you. It contains serious advice on personal-finance decisions from budgeting and savings to spending and investing.” —Burton G. Malkiel, author of A Random Walk Down Wall Street

“Ramit Sethi is a rising star in the world of personal finance writing . . . one singularly attuned to the sensibilities of his generation . . . His style is part frat boy and part Silicon Valley geek, with a little bit of San Francisco hipster thrown in.”—San Francisco Chronicle

“The easiest way to get rich is to inherit. This is the second best way—knowledge and some discipline. If you’re bold enough to do the right thing, Ramit will show you how. Highly recommended.” —Seth Godin

“Particularly appealing to the younger generation with its easy-to-read, no-holds-barred language.”—Business Insider

“Ramit’s like the guy you wish you knew in college who would sit you down over a beer and fill you in on what you really need to know about money—no sales pitch, just good advice.” —Christopher Stevenson, Credit Union Executives Society

“Smart, bold, and practical. I Will Teach You to Be Rich is packed with tips that actually work. This is a great guide to money management for twentysomethings—and everybody else.” —J. D. Roth, Editor,

“. . . one of our favorite personal finance sites.” —Lifehacker

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