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Book Summary – I Will Teach You to Be Rich (Ramit Sethi)

I Will Teach You to Be Rich - Book summary

Many young people are living from paycheck to paycheck, with no savings and no plans for their financial future. This book presents a 6-week program that’ll help you to start managing your money better and live a more fulfilling life. The insights are especially useful for young people in their 20s and 30s in America, but can be applied by anyone who wants to be financially well-off. In this free version of I Will Teach You to be Rich summary, we’ll briefly outline the key principles and 6 week program to help you regain control over your finances.

I Will Teach You to be Rich: An Overview

You don’t need to be a financial expert to become rich. The best financial management principles are actually very simple: sound budgeting, conscious spending, sensible banking, and buy-and-hold investment strategies.

In this summary, we’ll outline how you can use Ramit Sethi’s suggested steps to start taking control of your money in 6 weeks, redirect your money toward your financial goals and eventually achieve financial independence.

These steps are built on a few foundational concepts: If you keep your money in the bank, you’ll lose money due to inflation of about 2% per year. To get rich, start investing your money as early as possible. Don’t worry about making small mistakes initially–if you wait till you’re 100% sure to invest, you’ll end up doing nothing. Take small consistent steps and learn along the way.

Ready to learn to be rich?  Let’s go!

Gain Control of your Money in 6 Weeks

In I Will Teach You to be Rich, Ramit Sethi explains various concepts about money and finance, e.g. the role of credit, how banks really work, different types of bank and investment accounts, types of asset classes etc. If you’re unfamiliar with such terms, this book provides a useful overview. Sethi then moves on to outline practical steps (with illustrations) on how to set up your money so it can grow automatically to make you rich. Here’s a quick overview of the 6-week program.

I Will Teach You To Be Rich summary_Overview of the 6 week program

We’ll now zoom in on the 1st week in detail and outline the remainder. Do get a copy of our full 16-page summary for more details.


Use Credit Wisely

Debt or credit allows us to purchase high-value items that we can’t otherwise afford, e.g. a house, car, university education. Generally, debt is good if you use it for things that increase in value over the loan duration (e.g. a house).

However, it can have serious consequences if you develop the habit of spending more than you earn. When you don’t pay your monthly credit card payments in full, you incur high interests rates (ave 14% p.a.) with extra penalties for missing your payments.  If you spend $10,000 on a credit card purchase and only pay the minimum monthly balance, it’ll take you 13yrs to repay the amount. The interest alone is ≈ $4,000, since the debt rolls over each month and the interest builds up. You end up paying much more for your purchases. If the $4,000 had been invested at 8% returns, you’d have $27,000 after 13yrs.

Credit can be a useful resource if used wisely. If you use your credit cards responsibly and pay your bills in full every month, your cards can act like an interest-free loan, help you to track your spending, and even earn cash bonuses, air-miles and other perks.

Improve your Credit Rating

Your credit rating reflects your borrowing track record. It comprises (i) a credit record of your personal information and borrowing habits, and (ii) your credit score which shows how likely you are to repay your loan. The better your credit score, the less risky you are to lenders, and the easier and cheaper it is to get a loan. A good credit score can save you thousands of dollars over your lifetime.

Build a good credit track record by optimizing a few credit cards.

  • As a rule of thumb, use just 2-3 credit cards with the lowest fees and the best rewards. Choose a card with a low interests and suits your lifestyle, e.g. if you travel a lot, opt for a card which gives air miles.
  • Your credit utilization rate (CUR) is your current debt divided by how much you can borrow. The lower your CUR, the better. To improve your CUR, call your bank to increase your credit allowance or pay off your credit card debt.
  • Minimize your card-related charges. Call your bank to negotiate the fees, payback periods, interest rates and credit limits. It’s much easier to get concessions when you’ve been using the same card for several years.

Start repaying your debts to reduce your interest payments and improve your credit rating.

  • Work out how much debt you have, then develop a monthly plan to repay it. Deduct each month’s expenses from your income to calculate how much you can set aside. If you can’t even cover your minimum payments, you must earn more, spend less and negotiate for a lower minimum balance.
  • If you have >1 credit card, start by paying the minimum on every card. Then, pay as much as you can, either for the card with the highest interest or the lowest balance. Freeze all new spending on the cards, and aim to pay off 1 card at a time. Automate your monthly repayments so you won’t forget to pay them nor feel the loss psychologically.

Action Steps for Week 1

  • Get your credit report and credit score.
  • Research and manage your credit cards (aim for zero fees).
  • Develop a plan and up automatic payments to pay off existing debts.


Bank accounts are at the core of your personal finances. This section is about picking the best banks/accounts, minimizing bank fees and maximizing your bank interest.

In our complete I Will Teach You to be Rich summary, we elaborate on (i) how to choose the right banks and accounts, (ii) why you should have a separate current vs savings account, and (iii) how to negotiate your bank fees and minimum limits.


The earlier you invest, the faster you can get rich.  This step is about setting up 2 types of retirement investment accounts—a 401(k) and a Roth IRA—so your money can start working for you 24×7.

[Note: these 2 accounts are unique to the USA. Readers outside of the US can consider similar retirement accounts or investment options in your own country].

In our complete 16-page summary, we elaborate on (i) the difference between the 401(k) and IRA Roth accounts, (ii) tips on how to optimize both accounts and (iii) steps for getting started and getting the rest overall investment returns.


Use a conscious spending plan to become aware of how you’re spending your money and consciously decide how you’ll allocate your monthly take-home pay. As a rule of thumb, set aside:

  • 50-65% for monthly fixed expenses (e.g. rent, utilities, car insurance, debt repayments).
  • 10% for long term investments (e.g. 401(k), Roth IRA and other investment accounts).
  • 5-10% as savings for short-term + long-term goals
  • 20-35% for guilt-free discretionary spending.

In our full I Will Teach You to be Rich summary, we share more details on (i) the difference between being frugal vs cheap, (ii) tips to effectively reduce spending, (iii) how to best implement your Conscious Spending Plan, and (iv) concurrently aim to increase your income.


Invest some time to set up your money flow to run on autopilot. This prevents procrastination and saves you time in the long run. You’ll just need 1-2 hours per month thereafter to review your bills and accounts.

You can get more details from our full book summary on how to connect your bank accounts and set up your money flow automatically.


Investment is not about picking “hot stocks” or trying to beat the market. The best investment strategies are actually very simple. Learn them and set aside an afternoon to set up your investments. The earlier you start investing, the better. Do get our full version of I Will Teach You to be Rich summary for a breakdown of the following:

  • Why you shouldn’t pay for financial expertise;
  • What are the different asset classes (e.g. stocks, bonds, cash, index funds, mutual funds, lifecycle funds) and what you should invest in;
  • What’s automatic investing and why you should consider index and lifecycle funds over mutual funds); and
  • What are the key decisions you must make and how you can easily set up your investments within a day (without paying thousands to “experts”);

Beyond the 6 Weeks: Maintain your Investments

If you follow the 6-week program above by Ramit Sethi, you’d have done 85% of the work. Thereafter, you’ll just have to maintain your investment.  This includes:

  • Re-balancing your funds every 12-18 months if you chose to go with index funds (more details explained in our complete summary).
  • Gradually reaching the target percentages in your Conscious Spending Plan and building your investment portfolio. Within the first 6 weeks, you can set things up but you’ll still need time to achieve your financial goals.

Having a rich life goes beyond acquiring money, though money can give us the freedom to do what we love and give back to others. By having a conscious spending plan and a system to save and invest automatically, you can spend on things that matter and still achieve your goals.

Getting the Most from I Will Teach You to be Rich

In this article, we’ve briefly outlined some of the key insights and strategies you can use to achieve desired change. For more examples, details, and actionable tips to apply these strategies, do get our complete book summary bundle which includes an infographic, 16-page text summary, and a 26-minute audio summary.I Will Teach You to Be Rich summary - book summary bundle

This is a light and humorous book with many illustrations, calculations, recommended resources and detailed steps/tips to guide you through the 6 weeks’ action plan and beyond. Ramit Sethi also offers various negotiation tips (with banks, prospective employers etc.) and addresses frequently asked questions/concerns about money management and investments. You can purchase the book here for the full details, or get more details and resources at

Want more insights on money management and investments?  Do also check out: The Total Money Makeover  and Unshakeable.

About the Author of I Will Teach You to be Rich

I Will Teach You to Be Rich is written by Ramit Sethi–n American blogger, author, finance advisor and entrepreneur. He graduated from Stanford University with a Bachelor of Arts (Information & Society) in Science, Technology & Society with a minor in Psychology. He later received a Master of Arts in Sociology (Social Psychology and Interpersonal Processes), also from Stanford.

I Will Teach You to be Rich Quotes

“Investment isn’t about being sexy—it’s about making money.”

“The single most important factor to getting rich is getting started, not being the smartest person in the room.”

“If you invest in yourself, the potential return is limitless.”

“Frugality, quite simply, is about choosing the things you love enough to spend extravagantly on—and then cutting costs mercilessly on the things you don’t love.”

“Getting a raise is not about you. It’s about you demonstrating your value to your employer.”

“A rich life is about more than money. It starts by managing your own. And it continues by helping others become rich.”

“Getting rich isn’t about one silver bullet or secret strategy. It happens through regular, boring, disciplined action.”

Click here to download the I Will Teach You To Be Rich summary & infographic

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