I Will Teach You to Be Rich

No Guilt. No Excuses. Just a 6-Week Program That Works (Second Edition)


By Ramit Sethi

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As seen on the new NETFLIX series! The groundbreaking NEW YORK TIMES and WALL STREET JOURNAL BESTSELLER that taught a generation how to earn more, save more, and live a rich life—now in a revised 2nd edition.
Buy as many lattes as you want. Choose the right accounts and investments so your money grows for you—automatically. Best of all, spend guilt-free on the things you love.
Personal finance expert Ramit Sethi has been called a “wealth wizard” by Forbes and the “new guru on the block” by Fortune. Now he’s updated and expanded his modern money classic for a new age, delivering a simple, powerful, no-BS 6-week program that just works.
I Will Teach You to Be Rich will show you:
• How to crush your debt and student loans faster than you thought possible
• How to set up no-fee, high-interest bank accounts that won’t gouge you for every penny
• How Ramit automates his finances so his money goes exactly where he wants it to—and how you can do it too
• How to talk your way out of late fees (with word-for-word scripts)
• How to save hundreds or even thousands per month (and still buy what you love)
• A set-it-and-forget-it investment strategy that’s dead simple and beats financial advisors at their own game
• How to handle buying a car or a house, paying for a wedding, having kids, and other big expenses—stress free
• The exact words to use to negotiate a big raise at work
Plus, this 10th anniversary edition features over 80 new pages, including:
• New tools
• New insights on money and psychology
• Amazing stories of how previous readers used the book to create their rich lives
Master your money—and then get on with your life.



Chapter 1

Optimize Your Credit Cards

How to beat the credit card companies at their own game

You'll never see an Indian driving a two-door coupe. Really, think about it. If you have a neighborhood Indian—let's call him Raj—this guy is driving a practical four-door car, usually a Honda Accord or Toyota Camry. However, Indian people aren't just fanatical about driving sensible cars. We're absolutely nuts about hammering down the price to the last penny. Take my dad, for example. He'll bargain for five straight days just to buy one car. I've been along for the ride on these weeklong negotiating sessions with him before. Once, as he was literally about to sign the papers, he stopped, asked them to throw in free floor mats (a $50 value), and walked away when they refused. This, after he'd spent five days bargaining them down. As he dragged me from the dealership, I stared straight ahead, shell-shocked.

As you can imagine, by the time I went to buy my own car, I had been steeped in a rich tradition of negotiating. I knew how to make unreasonable demands with a straight face and never take no for an answer. I took a more modern approach, however: Instead of spending a week going from dealership to dealership, I simply invited seventeen dealers in Northern California to bid against each other for my business while I sat at home and browsed around the internet, calmly reviewing the emails and faxes (yes, really) as they came in. (For more about buying a car.) In the end, I found a great deal in Palo Alto and walked in ready to sign the papers. Everything was going smoothly until the dealer went to check my credit. He came back smiling. "You know, you have the best credit of anyone I've ever seen at your age," he said.

"Thanks," I replied, actually wanting to say, "AWWW, YEAH, I KNEW IT." That's because I was a weird twentysomething Indian who chooses a four-door Accord for his dream car and prides himself on his credit score.

Then the dealer said, "Hmm."

"Hmm?" I asked.

"Well," he said, "it looks like you have great credit, but not enough credit sources." The bottom line, he told me, was that they couldn't offer me the low-interest option we had talked about. Instead of 1.9 percent interest, it would be 4.9 percent. That didn't sound like much, but I pulled out a notepad and did a quick calculation. The difference would be more than $2,200 over the life of my car loan. Because I was getting such a great deal on the car, I convinced myself that the higher interest rate was okay, and I signed the papers for the loan. But I was still pissed. Why should I have to pay an extra two grand when I had great credit?

Most people weren't raised like me, so I understand that you probably hate negotiating. Most Americans do. We're not sure what to say, we get nervous about looking cheap, and then we look at ourselves and say, "Is this really worth it?" In a pool of sweaty discomfort, most of us conclude "No"—and we pay full price.

I have a fresh perspective: It's not worth negotiating everything, but there are a few areas of life where negotiation is a Big Win. In this chapter, I'm going to show you how to go on offense and squeeze as many rewards and benefits out of your credit cards as possible. You're going to start winning against them. And for the first time, negotiating is going to be fun.

The Usual Credit Card Scare Tactics

Virtually every section on credit cards in every book starts with these three scare tactics.

Scary stats. According to the Prosperity Now Scorecard, the median US household credit card debt is $2,241, and the median student loan debt is $17,711. The Fed Reserve notes that "Four in 10 adults in 2017 would have to either borrow money, sell something, or simply not be able to pay if faced with a $400 emergency expense."

Scary headlines. "The looming debt crisis will hurt these Americans the most," reports CNBC. Or this one from the Washington Post: "A debt crisis is on the horizon." Business Insider reports that "America's student debt crisis is worse than we thought."

Scary emotions. Confusion, anxiety, and lies—the media knows that if they employ these, they'll sell pageviews and ads.

Reading these scare tactics, how do you feel? Most of us respond by shutting down and ignoring the problem.

Debt was about fear. I didn't talk about it, I didn't look at the whole picture, I avoided any conversation or thought about it.

—Warren Kopp, 36

Debt was always at the back of my mind. I couldn't enjoy spending the money I had because it haunted me.

—Chris Behrens, 45

I remember feeling embarrassed when I would apply for a credit card and get turned down . . . When debt collectors would call, I would feel embarrassed and stressed about ignoring the call, because I owed money, but couldn't afford to pay it off.

—Allison Reynolds, 28

The media thrives on creating fear and anxiety around debt, as if it's inescapable and crippling. And they rarely suggest solutions—when they do, they're along the lines of "eat out less." Thanks, guys.

The result is a tornado of negative emotions. We feel helpless. We feel outraged. Who should get the blame? I don't know, but somebody should.

Most of all, we do nothing. This is how "outrage culture" works—it makes you feel angry and exhausted . . . and then you go back to doing nothing.

I have a different approach.

The Way I See It

Credit cards give you thousands of dollars worth of perks. If you pay your bill on time, they're a free short-term loan. They can help you keep track of your spending much more easily than cash, and they let you download your transaction history for free. Most offer free warranty extensions on your purchases and free rental car insurance. Many offer rewards and points worth hundreds or even thousands of dollars.

Credit cards are also convenient enemies. Almost everyone has a bad story about late fees, unauthorized charges, or overspending. Not surprisingly, many pundits have a knee-jerk reaction to credit cards: "Using credit cards is the worst financial decision you can make," they shout. "Cut them all up!" What an easy battle cry for people who want simple solutions and don't realize the benefits of multiple sources of credit.

The truth about credit cards lies somewhere between these two extremes. As long as you manage them well, they're worth having. But if you don't completely pay off your bill at the end of the month, you'll owe an enormous amount of interest on the remainder, usually about 14 percent. This is what's known as the annual percentage rate, or APR. Credit card companies also tack on a whopping fee every time you miss a payment—usually around $35. It's also easy to overuse credit cards and find yourself in debt, as many American credit card users have done.

This isn't meant to scare you away from using credit cards. In fact, instead of playing defense by avoiding credit cards altogether, I want you to play offense by using credit cards responsibly and getting as many benefits out of them as possible. To do so, you need to optimize your credit card(s) and use them as a spearhead to improve your overall credit. By the end of this chapter, you'll know how to squeeze the credit card companies for everything they're worth—without paying unnecessary fees—and you'll know how to use your cards to boost your all-important credit score. I'll show you how to negotiate with credit card companies and reveal secret perks that nobody talks about. And I'll show you exactly how I maximize my credit cards for perks and cash back, including examples of how I use points for free flights and high-end hotel stays.

When I was traveling with my fiancée to see her family in Dubai, I surprised her with a three-night stay at a resort in the desert that could only be described as 7-star. We had a private villa in traditional bedouin style overlooking the Dubai desert with a private pool, and all meals at the resort were provided. The whole experience easily would have cost $2,000-plus a night, but I did the whole thing for free with points.

—Nathan Lachenmyer, 29

I recently booked 2 round-trip tickets from San Francisco to Italy for a 2-week vacation this fall. The flights were completely free with credit card points!

—Jane Philipps, 30

In the past year I've flown business class to Spain and stayed at luxury hotels for a week, flown round-trip business class with my girlfriend to Thailand, and flown my mother to Germany business class to visit for her father's 80th birthday. I'm also about to redeem miles to go to Budapest next spring!

—Jordan Petit, 27

Student loans can be a great decision. Journalists love to write about the student debt "crisis." Yet a student loan can be one of the best investments you ever make, with the average bachelor's degree holder earning over $1 million more than people with only a high school diploma. Yes, debt sucks, and yes, many predatory colleges and graduate schools actively lie to young Americans about the actual value of their degree—a problem that's completely inexcusable and supported by an educational-industrial complex. Many earnest but naive students were misled by their counselors, colleges, and even their parents about incurring student loan debt on degrees that will never pay off.

But you can pay off your debt faster than you thought possible (to see how, flip to Student Loans—Pay Them Down or Invest?). And your college degree was almost certainly worth it—even if you're only considering the financial return on investment and not including the benefits of making lifelong friends, building priceless habits of discipline, and exposing yourself to new ideas as an educated citizen. Ignore the scare tactics of the student loan "crisis." If you have student loan debt, use the material in this book to create a repayment plan.

Most people are playing the game wrong. I've spoken to literally thousands of people who are in debt. Some of them have had tough situations—unexpected illnesses, elderly parents who need support, surprise expenses. But, candidly, some of them are simply playing the game wrong. They've never spent a weekend reading a book on personal finance. They don't even know how much they owe! Instead of doing the work to aggressively win at the game of debt, they complain. It's like watching a four-year-old trying to play Monopoly, then realizing they can't understand the rules (which they've never read), getting angry, and flipping the board over. I'll show you how to win.

When it comes to student loans and credit cards, my goal is for you to stop playing defense. I'm going to show you how to play offense instead. For student loans, make an aggressive plan and minimize the amount of interest you pay. For credit cards, I squeeze every single benefit out of them. Basically I want the credit card companies to hate you, as they hate me.

The best part is how fast you can change your financial life once you switch from playing defense to playing offense with your money.

In the 3½ years since I read the book, I paid off $14,000 in credit card debt and $8,000 in student loan debt.

—Ryan Healey, 27

In the past year since I started this book, I opened a 401(k) and a Roth IRA, understand how they work, and have funded $7,200 toward my retirement. I also opened 2 credit cards to build my utilization and boost my credit score and am 100 percent a deadbeat customer who pays on time every month in full.

—Jeff Collins, 35

I learned how to automate my credit card payments, set up flexible spending, and start investing in index funds. Today I have amassed over $40,000 in my "net worth," having been out of school for less than 2 years. Thanks for the advice!

—Emily Bauman, 24

Bank of America Hates Me

Bank of America, one of the world's shittiest banks, hates me because I've named them as one of the worst banks out there. Good news! Ten years later, they're still on my list for screwing over my readers repeatedly. (Wells Fargo is also on my list.) I don't cut deals with banks—I don't need their money—and I call out the best, and worst, financial companies for my readers.

As you can imagine, the worst companies don't like being named in a New York Times bestselling book. I discovered Bank of America hates me because one of my friends works in their corporate office. One day, she reached out to me and said, "Did you know you're on a Bank of America influencer list?" I was surprised. Me? Little old me?

Then she added: "It's a negative influencer list."

I have never been so proud.

Playing Offense: Use Credit to Accelerate Your Rich Life

People love to pick sexy investments and use fancy terms like "distressed securities" and "EBITDA" when they focus on getting rich. But they often ignore something that is so simple, so basic, that it just doesn't seem important: their credit. Ironically, credit is one of the most vital factors in getting rich, but because it's hard to wrap our minds around it, we often overlook it entirely. It's time to wake up and pay attention to it, because establishing good credit is the first step in building an infrastructure for getting rich. Think about it: Our largest purchases are almost always made on credit, and people with good credit save tens of thousands of dollars on these purchases. Credit has a far greater impact on your finances than saving a few dollars a day on a cup of coffee.

There are two main components to your credit (also known as your credit history): your credit report and your credit score. These boring terms can actually save you tens of thousands of dollars over your lifetime, so listen up. This is an example of a Big Win—worth paying attention to.

Your credit report gives potential lenders basic information about you, your accounts, and your payment history. It tracks all credit-related activities (e.g., credit cards and loans), although recent activities are given higher weight.

Your credit score (often called your FICO score because it was created by the Fair Isaac Corporation) is a single, easy-to-read number between 300 and 850 that represents your credit risk to lenders. It's like an SAT score for the credit industry (higher is better). The lenders take this number and, with a few other pieces of information, such as your salary and age, decide if they'll lend you money for credit like a credit card, mortgage, or car loan. They'll charge you more or less for the loan depending on your score, which signifies how risky you are.

It's ridiculously easy to check your credit score and credit report—and you should do it right now. Once a year, by law, you're allowed to obtain your credit report for free at annualcreditreport.com. It includes basic information about all your accounts and payment history.

Lots of people use Credit Karma (creditkarma.com) to get a free credit score, but I prefer the official credit score from MyFico (myfico.com), which is more accurate even though it has a small fee.

Why are your credit report and credit score important? Because a good credit score can save you hundreds of thousands of dollars in interest charges. How? Well, if you have good credit, it makes you less risky to lenders, meaning they can offer you a better interest rate on loans. Maybe you don't need a loan today, but in three or four years, you might need to start thinking about a car or a house. So please don't scoff at or dismiss what you just read. One of the key differences

Credit Score vs. Credit Report

What your credit score is based on:

What your credit report includes:

35% payment history

(How reliable you are. Late payments hurt you.)

  Basic identification information

30% amounts owed

(How much you owe and how much credit you have available, aka your credit utilization rate)

  A list of all your credit accounts

15% length of history

(How long you've had credit)

  Your credit history, or whom you've paid, how consistently, and any late payments

10% new credit

(Older accounts are better, because they show you're reliable.)

  Amount of loans

10% types of credit

(For example, credit cards, student loans. Varied is better.)

  Credit inquiries, or who else has requested your credit info (other lenders)

Get your credit score at myfico.com for a small fee.

  Get your free credit report once a year at annualcreditreport.com

between rich people and everyone else is that rich people plan before they need to plan.

If you doubt that a loan's interest rate really makes that much of a difference, check out the table on the next page. Look at the differences in what you'd pay for a 30-year mortgage based on your credit score.

As you can see, a high credit score can save you tens of thousands of dollars over your lifetime (or more if you live in a high-cost-of-living area). While other people spend many hours cutting coupons, agonizing over generic brands at the grocery store, or beating themselves up over a morning latte, they're failing to see the bigger picture. It's fine to keep a close eye on your expenses, but you should focus on spending time on the things that matter, the Big Wins. So let's dig into tactics for improving your credit, which is quantifiably worth much more than any advice about frugality.

How Credit Scores Affect What You Pay

On a $200,000 30-year mortgage, if your FICO score is . . .

. . . your APR* (interest rate) will be . . .

. . . with interest, you'll pay a total of . . .



















*APR calculated in August 2018.

My credit mistake was I opened my account too late, I very quickly started using my card to stay out of my bank overdraft, and it got out of hand. Then I forgot I had to make a payment and missed a payment. I wish I'd understood how a credit card would help my credit score a decade ago, because then I would've already made, learned from, and recovered from my daft mistakes with it.

—JC, 29

Building Credit with Credit Cards

Credit comes in many forms (car loans, mortgages, and so on), but we're going to start with credit cards because almost all of us have one, and most important, they're the fastest and most concrete way to optimize your credit. Most people are making at least one or two major mistakes with their credit cards. The good news is that it's incredibly easy to fix this by learning a little bit about how credit cards work.

Guess How Much an iPhone Costs If You Finance It with a Credit Card?

One of the biggest problems with credit cards is the hidden cost of using them. It may be incredibly convenient to swipe your card at every retailer, but if you don't pay your bill every month, you'll end up owing way more than you realize.

Let's say you buy this . . .

Paying minimum payments, it will take this long to pay it off . . .

You'll pay this much in interest

$1,000 iPhone

9 years, 2 months


$1,500 computer

13 years, 3 months


$10,000 furniture

32 years, 2 months


Assumes 14% APR and 2% minimum payment

If you paid only the minimum monthly balance on your $10,000 purchase, it would take you more than 32 years and cost you more than $13,000 in interest alone, more than the purchase price itself. Remember, this doesn't even factor in your "opportunity cost": Instead of paying off a $10,000 sofa for over 30 years, if you'd invested the same amount and earned 8 percent, it would've turned into about $27,000! Try calculating how much your own purchases really cost at bankrate.com/brm/calc/minpayment.asp.

Getting a New Card

How do you choose the right credit card? I have a few simple rules that I use when choosing my own cards:

 Don't accept credit card offers that come in the mail or from retail stores like Gap or Nordstrom.

 Squeeze every reward you can out of your credit cards.

 Pick a good one, then move on with your life.

Now here's how to do it.

Get rewarded for your spending. There are different levels of rewards cards. Some are very basic, while others offer hundreds of dollars in annual benefits—or even thousands, depending on how much you spend.

First, decide what you want to get rewarded with—cash back or travel. I recommend cash back because it's straightforward, there are excellent cash back cards, and it's simpler than travel rewards, which require more sophistication to truly maximize. (For more on maximizing travel rewards, look up forums on "credit card churning.")

Once you decide on the primary reward you want, use a site like bankrate.com to sort through your options.

Most of the best rewards cards have fees. Are they worth it? You should run the numbers to decide, which takes less than 5 minutes. Here's a quick rule of thumb: If you spend thousands per month on your credit card, the rewards are usually worth it. But if you spend more modestly or you're not sure whether you want to pay a fee, spend a few minutes doing a quick analysis by searching for "credit card rewards calculator." Plug in your numbers and you'll quickly see which rewards cards are worth it for you.

Bottom line: It's almost always worth getting a rewards card. Be sure to do your homework and pick one where you value the rewards.

Don't sign up for retail store credit cards. These cards might as well have "You Screwed Yourself" written on them in thirty-six-point type. I can't count how many times I've been in line and seen someone buying $40 of socks or a cheap T-shirt or two. I just wait for the conversation I know is about to happen. "Would you like to open a credit card?" the salesperson asks, praying he meets his commission goal for the month. "You'll save ten percent."

Yup! There it is! Between clenched teeth, it's me muttering, "Shut your mouth, Ramit. Don't say anything. They don't want your unsolicit—"

Person at the register: "Hmm . . . sure, I'll open that card. Why not? It couldn't hurt."

Two points for our friend who decided to open a retail credit card:

1. As a general rule, whenever you say, "It couldn't hurt," IT VERY MUCH COULD HURT. Every single time I've said that in my life, I've proceeded to make a huge mistake.

2. This person just opened one of the most predatory cards out there to save $4. Jesus. You might as well reach into a dirty gutter to find a few pennies. That would be cheaper than the financial beating you're going to eventually take.

Get some standards, people. You wouldn't marry the first person who touched your elbow. Why would you sign up for a retail store card that has high fees, near-extortionate interest rates, and terrible rewards?


  • “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, GetRichSlowly.org


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

On Sale
May 14, 2019
Page Count
352 pages


Ramit Sethi

About the Author

Ramit Sethi writes about money, business, and psychology for a million readers each month at iwillteachyoutoberich.com. 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.

Workman Publishing is a New York-based publisher of award-winning nonfiction for adults and children.

Learn more about this author