For more than 20 years, Ramit Sethi, bestselling author of “I Will Teach You to Be Rich,” has been in the business of teaching people how to build wealth. But even this well-established money expert said he wishes he had understood certain personal finance concepts earlier in life.
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In January, Sethi, 42, shared a YouTube video outlining money truths he wished he knew when he was in his 20s and 30s. Here are 50 financial concepts he shared.
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You Don’t Have All the Time in the World
You can’t afford to put off taking care of key financial housekeeping tasks now, like maxing out your company 401(k) for retirement, that allow you to enjoy a comfortable tomorrow. The longer you wait, the harder it gets to get things done properly.
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There Are No Shortcuts To Building Wealth
Don’t be fooled by get-rich-quick schemes. According to Sethi, building wealth takes time, patience and discipline.
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People Have To Be Receptive to Change
Sethi said, “Beating people over the head with more information and more numbers will not get them to change. They have to be willing and open to change, and you have to connect with them.”
Have More Fun
Get out from behind the spreadsheet. Let your money give you the gift of enjoying experiences and becoming more adventurous, spontaneous and generous.
Time Your Experiences
Sethi uses the example of someone backpacking across Europe. This is usually easier for a healthy twentysomething than it is for individuals in their 50s.
You Don’t Have To Be Perfect
If you strive for perfection at every turn, this could hold you back from getting started. Embrace the understanding that your financial picture won’t be perfect and you’ll find yourself improving along the way.
Spend Money on Becoming Who You Want To Be
Do you want to be in better shape? Consider getting a gym membership to reach this goal.
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Have a Big Cash Reserve
This is about having more money outside an emergency fund. Sethi said you want a big enough cash reserve to be able to take advantage of opportunities, like investing, when they present themselves.
Create a Tripod of Stability
Sethi said the three most important things in his tripod are having healthy relationships, being in a healthy workplace and living in a healthy housing environment. The stability found in this tripod allows him to take on more risk in other areas of his life.
Talk About Money Early in Your Relationship
This ties back in with Sethi’s first tip. The longer you wait to discuss finances in your relationship, the harder it gets to have this conversation.
The More You Make, the More Generous You Can Be
Doesn’t it feel good to make a donation to your favorite cause or toward a GoFundMe when you have the means to do so?
Get Used to Waste
Not everything you buy will have an immediate return on investment in your life — and that’s OK. Sethi said it’s fine to waste a little bit of money throughout your financial journey. While you should try to reduce waste, attempting to fully eliminate waste is not the point.
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You Don’t Have To Do What Everyone Else Is Doing
Even if it feels, and looks, like everyone on social media is buying a house, buying a car or going on vacation, you choose your rich life.
Try on the Clothes First, Then Look at the Price Tag
Doing this may be better for your budget than you realize. Instead of paying for several cheaply made pieces of clothing that fall apart in a few months, you’ll be investing in wardrobe staples built to last.
Don’t Use the Mini Bar
It’s always overpriced.
Expose Yourself To Different Ways of Living and Using Money
Sethi uses the example of the time he interviewed at Microsoft while in college and the company allowed him to expense anything. Sethi ordered room service for the first time ever, which he said was a “magical” experience.
Be Careful About Where You Get Advice
This truth applies to all types of advice, whether you’re seeking insight into your career or help managing your money.
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Acknowledge Reality
If there are certain milestones you know you want to accomplish in your life, like buying a home, start saving for a home before you find the perfect listing.
Monitor Your Language
“When I took a trip, I would say, ‘This is a once-in-a-lifetime trip,'” Sethi said. “No it’s not! If I want to do it again, I can.”
Don’t Let the Tail Wag the Dog
Sethi uses the example of not moving somewhere just so you can save on taxes. Instead, he recommends choosing where you really move to first and letting taxes be a secondary part of the decision.
Certain Things Are Worth the Extra Money Spent
It’s worth it to pay more money for great talent, clothes and experiences.
Other Things Are Not Worth Paying Extra
Per Sethi’s example, this includes 1% AUM fees from financial advisors.
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Whatever Money You Save, Invest the Difference
Is there an unnecessary expense you don’t have to pay for, like home ownership because you didn’t choose it? Sethi recommends investing the difference. This is the quickest, and most legitimate, way to build wealth.
It’s Not Normal To Carry Tons of Credit Card Debt
Many people may be in credit card debt, but you don’t have to be one of them.
Do Things Exactly How You Want To Do Them
When Sethi was younger, he said he did stuff at the level he could afford. Now that he’s older, he said he has a vision for how he wants to do certain things — and he won’t budge on it. If he can’t do it exactly that way, he said he’ll wait until he can.
Decide Where You Want an Unlimited Budget
Create your own money rule around something you truly love to buy. Sethi said he gave himself the gift of an unlimited book budget.
Renting Can Be a Better Financial Decision Than Buying
Run the numbers to see which makes more financial sense for your unique circumstances.
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Talking About Money With Your Partner Is Not Weird
“If you are married, you are running a business — the business of running a household together,” Sethi said. “Talking about money can bring you closer together and build that connection.”
Don’t Be Misled By What You See on the Surface
If you see someone spending a lot of money on social media, don’t make assumptions about their financial situation. Actually, you shouldn’t think about what they’re doing at all. Focus on yourself and run your own race.
Not Everyone Makes Money on Their House
According to Sethi, 50% of people don’t know their own household income. And a lot of people don’t understand the phantom costs that come with owning a house — such as fees, opportunity costs and inflation.
In Debt? Don’t Talk About Generational Wealth
Pay off your debt first.
The Second-Best Time To Start Investing Is Today
So what if you didn’t start investing at age 17? If you start investing today, it moves you that much closer to reaching your rich life.
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Celebrate the Journey
Otherwise, you’ll always feel behind.
Do Not Be a Doomer
Surrounding yourself with nothing but doom and gloom news, thoughts or ideas makes it that much easier to start believing in it.
Beware of Fake Metrics
Focus on the things that matter instead.
9-5 Jobs Are Not for Losers
No matter how many TikTok entrepreneurs say otherwise, 9-5 jobs are not for losers.
Talk About Where You’re Struggling
Many people will try to avoid having these discussions, but Sethi said that when you share what’s going on — including what’s going well and what’s hard — people really connect to you.
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What Got You Here Won’t Get You There
This money truth is actually the title of a book by Marshall Goldsmith. It refers to people who have certain skills that get them to reach a level, but getting to the next level means developing new skills.
Sethi uses the example of being a good listener and becoming more emotionally sensitive, which he said are among the most important things he has done in the last 20 years.
Give Yourself the Gift of True Awe Every Year
At least one “wow” moment every 365 days.
Don’t Just Think of Yourself
Ask yourself how you can use your money to help others around you.
Don’t Buy Something Just Because You Think You Deserve It
This is particularly true of things you can’t afford, like a new car.
Become an Expert at Leisure
Don’t overwork yourself. Enjoy yourself.
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Reframe Negative Thoughts Into Positive Ones
Instead of thinking you’re lazy because you’re not working right this second, reframe this thought as one where you’re resting and recuperating. When it’s time to get back to work, you’ll be ready.
Avoid Get-Rich-Quick Schemes
Sethi said, “Some people will willingly get scammed because they do not want to do the hard work. They’re looking for get-rich-quick schemes no matter how many times you tell them it’s a scam. Don’t become one of these people.”
Double or Triple Your Projected Big Expense
If you have a major expense coming up, like spending money on a wedding or vacation, double or triple this amount. Doing so will bring you closer to your actual spend when you factor in all the related expenses.
It’s OK To Say No
You don’t have to say yes to everything you’re invited to, especially if you’re focusing on saving money or getting out of debt. Your true friends will be OK if you say no.
Appreciate People Who Put in the Effort
People remember, and appreciate, the moments when you dressed nicely and kept your space tidy.
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If You Can’t Pay It Off, Don’t Charge It on Your Credit Card
Credit card debt is a slippery slope.
Your Loved Ones Remember Who Steps Up When They Need Help
Sethi still remembers who donated at least $20 when he and his wife launched a fundraiser. “Those things stick with us.”
Nobody Cares
When Sethi helped a friend get a 75% raise, he taught her not to go into negotiations talking about how much or how hard she works. Your boss doesn’t care about that. What they care about is how you’re making their lives easier and making them money.
Once she reframed this narrative, Sethi said, she remembered one of life’s key lessons. Nobody cares, so show them in a way that makes them care.
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This article originally appeared on GOBankingRates.com: Ramit Sethi: 50 Money Truths I Wish I Had Learned in My 20s
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