I Will Teach You to Be Rich

I Will Teach You to Be Rich Ramit Sethi (2009; updated 2019 second edition)

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The $2,000 his father walked away from

The story Ramit Sethi tells about his own family is the one that frames everything that follows. His father, an Indian immigrant raised on a household budget where every rupee had a job, would sit at a car dealership for five days at a stretch to grind down a sticker price. He was the kind of man who, after a week of negotiation, refused to sign because the dealer would not throw in $50 worth of floor mats. He stood up and walked out. A teenage Ramit watched, half embarrassed, half astonished. Most American families he knew at school treated buying a car like buying a sandwich. His father treated it like a chess match.

When Ramit was fifteen, his parents told him that if he wanted to go to college, he was going to have to win the money himself. He applied for sixty scholarships. He won several hundred thousand dollars in total, more than enough to pay his way through Stanford. The first scholarship check, for $2,000, was made out to him personally. He took the money, walked into the stock market with it, and lost half of it almost immediately.

That moment, he writes, was the first honest financial education he ever got. He had read no books. He had watched no shows. He had simply done what young people do when they have a little money and a lot of confidence, which is to throw it at something flashy. The loss embarrassed him into reading every personal finance book he could get his hands on. By 2004 he was writing a blog called I Will Teach You to Be Rich for his friends at Stanford. By 2009 the blog had become this book. The premise has not changed in the years since. Most young people, he argues, do not need a financial advisor. They need to set up the plumbing once, automate it, and then go live their lives.