Ramit Sethi — Automating Finances, Negotiating Prenups, Disagreeing with Tim, and More (#371)

Tim Ferriss and Ramit Sethi

“Most of us should spend less time on most decisions and we should spend a lot more time on a few key decisions.”
— Ramit Sethi

Ramit Sethi, (@ramit) author of the New York Times bestseller I Will Teach You To Be Rich, has become a financial guru to millions of readers in their twenties, thirties, and forties. He started his website, iwillteachyoutoberich.com, as a Stanford undergraduate in 2004, and he now hosts over a million readers per month on his blog, newsletter, and social media.

Ramit grew up in Sacramento, the son of Indian immigrant parents who taught him the art of negotiating — his father once spent five days negotiating with a car dealer, only to walk away over a set of floor mats. He wasn’t the smartest kid in his class, but he loved building systems, which ultimately earned him over $200,000 in scholarships, which he used to get bachelor’s and master’s degrees in technology and psychology at Stanford. His understanding of human behavior and money led to him creating innovative solutions in self development.

Ramit and his team of dozens of employees build premium digital products about personal finance, entrepreneurship, psychology, careers, and personal development for top performers. The IWT community includes one million monthly readers, 400,000 newsletter subscribers, and 35,000 premium customers.

He has written about personal finance for The Wall Street Journal and The New York Times, and been interviewed on dozens of media outlets including NPR, ABC News, and CNBC, and popular podcasts like The Tim Ferriss Show.

Watch the interview on YouTube.

Listen to the episode on Apple Podcasts, Spotify, Stitcher, Overcast, Castbox, or on your favorite podcast platform.

#371: Ramit Sethi — Automating Finances, Negotiating Prenups, Disagreeing with Tim, and More


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Want to hear the first time Ramit was on this show?Listen to Ramit and me talk about persuasion and turning a blog into a multi-million-dollar business. (Stream below or right-click here to download part one; right-click here to download part two.):

#33: Ramit Sethi on Persuasion, Negotiation, and Turning a Blog Into a Multi-Million-Dollar Business

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QUESTION(S) OF THE DAY: What was your favorite quote or lesson from this episode? Please let me know in the comments.

Scroll below for links and show notes…

SELECTED LINKS FROM THE EPISODE

  • Connect with Ramit Sethi:

Website  | Instagram | YouTubeTwitter

SHOW NOTES

  • Ramit shares a childhood story that beautifully illustrates why he grew up to be such a savvy negotiator. [03:09]
  • What made Ramit consider “I was right” as an appropriate beginning for the second edition of I Will Teach You To Be Rich? [05:55]
  • As someone who once wrote “How to Negotiate Like an Indian” as a blog post for me a few years back, why has Ramit rented the same apartment for 10 years instead of buying a house? Is it a myth that real estate is the best investment? [08:37]
  • Sometimes your good financial decisions won’t equal someone else’s good financial decisions — or even your own at another stage of the game. Small nuances add up. [12:36]
  • “What am I missing?” Why Ramit wishes he could go back in time and shake his 22-year-old self. [16:53]
  • An expenditure that once seemed frivolous and why it makes perfect sense today (after learning the hard way). [18:21]
  • What Ramit means by living a “rich” life — and why his might not match yours or mine. [20:26]
  • Life-running, invisible scripts that Ramit inherited from his parents. [22:44]
  • Examining wise but seemingly counterintuitive words from marketing consultant Dan Kennedy: “Why pay less when you can pay more?” [25:31]
  • Frugality has its place: Parts of Ramit’s life in which he chooses to be frugal and why. [27:51]
  • Adjusting what Ramit calls the “money dial” to spend extravagantly on things we love and cut costs mercilessly on the things we don’t. [31:49]
  • Examples of how convenience is applied to Ramit’s rich life. [36:56]
  • How does Ramit keep track of travel and other convenience protocols and convey them to his team when necessary? [39:04]
  • As we’ve discovered, some of the most game-changing conveniences and lifestyle upgrades are cheaper than you might expect. [40:30]
  • Even if you don’t generally carry cash, here’s why always having a few $20 bills on hand can save the day. [43:09]
  • A tip for becoming a lifelong VIP at your restaurant of choice. [43:39]
  • How Ramit’s wife got a free cooking class from their restaurant’s chef just by asking for a spring roll recipe on their honeymoon, and what this and a tea tasting taught Ramit about how easy it is to learn from people who love what they do. [45:06]
  • A recap of Noah Kagan’s Coffee Challenge and cultivating the muscle for asking. [51:31]
  • Two exercises for challenging accepted “truths” you may believe about money. [52:09]
  • Ramit gives us a glimpse at his own system for funneling income where it needs to go, including investments (and an explanation of target-date funds). [55:53]
  • Ramit is an open book about a much-shunned topic he and his wife agreed to share: the pros and cons of the prenuptial agreement (aka prenup) and why therapy might be the best place to start for any couple considering one. [1:02:20]
  • If we can avoid decision fatigue by having systems in place to automate the mundane, we might live long and prosper like Ramit’s uncle. [1:41:07]
  • Ramit’s Book-Buying Rule, the power of sub-accounts, and why some areas of your life shouldn’t have a budget. [1:42:10]
  • How a couple can reduce decision fatigue by establishing guidelines for travel and daily chores. [1:43:53]
  • How Ramit and I agree and disagree on morning routines. [1:48:27]
  • How we agree and disagree on the use of tools. [1:54:15]
  • The value in understanding that our principles change over time, and what has changed for Ramit in the 10 years between editions of I Will Teach You To Be Rich. [1:59:10]
  • Financial freedom, retirement, and mini retirements. [2:01:30]
  • How does Ramit encourage his students to think about their objectives? [2:02:41]
  • Checking in and general organization: If it’s not in the calendar, it’s just not real. [2:05:50]
  • Calendar rituals for the care and feeding of a healthy relationship. [2:08:20]
  • How do you say Ramit Sethi correctly? [2:19:18]
  • Parting thoughts. [2:19:26]

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