How do you live a truly “rich” life, and maximize your assets for retirement — and for today? Ramit Sethi weighs in.
When it comes to personal finance, HerMoney founder and CEO Jean Chatzky likes to say that it’s more personal than finance. In other words, having a set of rules to follow with your money is a great place to start, but those rules need to apply to your life as well: What do you value when it comes to using your hard-earned money? Do you want to expand your family? When, if ever, do you want to retire, and what do you want that retirement to look like? To learn more about writing your own rules for the future, we spoke with Ramit Sethi, author of the New York Times bestseller, I Will Teach You to Be Rich, and host of the new Netflix show, How to Get Rich. Sethi works with people across the country to help them achieve their richest lives, and his book features his own top 10 list of money rules to follow.
SUBSCRIBE: Get behind-the-scenes financial insights from Jean Chatzky and the HerMoney team. Subscribe to the free weekly HerMoney newsletter today!
What It Means to Be Rich
Being “rich” is a loaded term, Sethi says, because it means different things to different people. “When we hear the term, we mostly think about being driven around in a chauffeured limo and eating fancy foods, but living a rich life can also be picking up your children from school every afternoon.” For some people it’s retiring early. For others, it’s the ability to take a nice vacation with their family once a year. “That’s their rich life,” Sethi says.
Sethi often asks people what would be a rich life for them. He says that about 90% of the time he gets the same answer: I want to do what I want, when I want. But Sethi is quick to push back and tell them that’s actually not an answer. “I ask them, what do you want to do?” he says. “We spend decades of our lives going to work, agonizing over the price of broccoli, saving money valiantly, but we never actually stop to think, what is all this for? What is my rich life?”
Be Specific
Another common answer people give Sethi is “freedom,” but he says that’s still not specific enough. Ask yourself the question, and challenge yourself to b e as detailed as possible. For example: “My wife and I, or my husband and I, would like to take a three-week trip to Italy. We want to watch the sunset while drinking Italian wine and looking out over the Colosseum. And we want to bring my mom or my dad or our children with us. That’s the beginning of designing a beautiful, rich life vision,” he says.
Of course it doesn’t have to be a trip to Italy. It can be something familiar and comfortable. For example, after moving across the country, Sethi says he and his wife found they really missed living in New York. So now, whenever they return, they take Fridays off to walk around and do some of the things they love most about the city. “We go to our favorite places,” he says, adding that living a rich life can be as simple as enjoying a slice of pizza at one of your favorite neighborhood spots.
“It can be as simple as that,” Sethi says, “or it can be as extravagant as a luxurious two-month trip, or a beautiful car. Whatever your thing is, that’s okay.”
Don’t Minimize Your Goals
Often people – even close friends and loved ones – are afraid to share their “rich life” vision for fear of being judged. So, they tend to minimize their goals. For example, someone might say something like “I’d love to have a beach house one day, but it doesn’t have to be a big beach house… It could be a dilapidated shack.”
READ MORE: 50 People On Their Biggest Spending Regret
“I say, what the hell?” Sethi says. “How did we go from your rich life to a dilapidated shack? Stop minimizing yourself. Soon, we’re all laughing. They didn’t even realize they were minimizing their dreams.” So, whenever you’re creating your vision for your best life, try not to hold anything back, even if it feels like you’re taking a moonshot. What would you envision for yourself if there were no self-imposed restrictions? Once you have that vision in your mind, you can create a plan for how to get there.
Treating Yourself Is Not Frivolity
Another hurdle that many people face when envisioning their best, richest life is that they may feel what they want is “frivolous.” For example, if you want a nice handbag, or pricey theater tickets, you should stop thinking of it as frivolous. Once your other life goals (like saving for retirement) are taken care of, it’s okay to treat yourself – and feel good about treating yourself.
READ MORE: Frugal vs. Cheap: What’s The Difference?
“In my community,” he says, “I want you to spend extravagantly on the things you love, as long as you cut costs mercilessly on the things you don’t.” In other words, every single day, we’re inventing (and re-inventing) what our “rich life” actually looks like.
SUBSCRIBE: Get behind-the-scenes financial insights from Jean Chatzky and the HerMoney team. Subscribe to the free weekly HerMoney newsletter today!
Editor’s note: We maintain a strict editorial policy and a judgment-free zone for our community, and we also strive to remain transparent in everything we do. Posts may contain references and links to products from our partners. Learn more about how we make money.
