Track These 4 Numbers to Become a Millionaire
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- Опубликовано: 7 фев 2024
- What if I told you that you only need to track 4 numbers to live a Rich Life and exponentially grow your wealth, all while spending less than 1 hour PER MONTH on your finances. I'll show you how...
Download a copy of my Conscious Spending Template which has these 4 categories already included: iwt.com/csp-youtube
Ramit Sethi is the host of Netflix's "How To Get Rich" and New York Times bestselling author of "I Will Teach You To Be Rich"
Find Ramit on Instagram: / ramit
My rich life.. I just came back from my native country Peru.. gave gifts, dinners in expensive restaurants and stayed in beautiful hotels with my family over there 😊 where my dollar value is 3 times more! We tipped like in America 15-20%. and made the day to tons of people , over there , waiters don’t get tips , just the minimum. That’s my rich life after applying your advice for years 🙏🏻
Beautiful!
How do people these days have such a good memory that they remember their dream life.. the only thing I remember abt my dreams is that it was about humans
@@annanay007 they live it everyday, so not much to remember ;). Rich life, at least a far as I'm concerned, is a habit, not a goal.
Read your book at 60 years old. As a result got aggressive and am now investing and saving 50% of income automatically each month. Trying to create generational wealth. Thanks a million. I really don’t like eating rice and beans and beans and rice every day.
Inspired!! You got this friend 🫶🏻🤍
Frugality Freak, here. I needed to hear this message. My net worth is steadily growing and I'm still struggling to spend.
Me, too. This year I made a New Years resolution to spend more, but I still find myself looking at $20 purchases and thinking do I really need that?
But it is nice knowing that if I lost my job tomorrow, I could probably just retire and be fine.
@@stevenspencer306 That is a great resolution! I can relate to your thoughts regarding the purchases. I bought a $20+ item yesterday and was really thinking twice about it. A part of it was also that I am traveling and wanted to make sure that I had space for it in my suitcase.
That's good that you could potentially retire if you lost your job. Sounds like you are in a healthy place financially.
@@stevenspencer306 How's your New Year's resolution going?
I'm doing slightly better with spending but I still find myself second guessing spending. I often wonder if it is because I am not to the point of feeling comfortable enough to be comfortable retiring, I'm decades off from the time I may consider retiring, but financially I'd like to be further than what I am now and have it as an option even if I don't make that choice. But I wrestle with the question of, when that time does come, will I still feel this way about spending?
I literally just automated all of my bills and card payments (from advice I saw from you last video), I even created an excel spreadsheet to track my spending and debt payment progress, just bought your book I Will Teach You How To Be Rich, and I look forward to continuing to follow your guidance to freedom and my rich life. You are an amazing teacher. Thank you so much for making me realize how much power I can have on my money flow.
Sounds good! Can you please share which video you got the advice from. I am new here and that sounds great.
The automating bills and payments idea from him, but when I started listening to his book, I realized I was a little too obsessed with the spreadsheet. lol I am learning to have a more relaxed but alert approach to taking control of my finances. I watch many of his videos and started listening to the audio version of his book I Will Teach You To Be Rich. Awesome and practical advice. @@JohnHei-zx6rk
In all my years on this planet, I've never had my name used as a persona in an example before. Thank you Ramit, I feel seen.
This was brilliantly put together Ramit. I’ve been following your videos for months now and with professional help, I’m making outstanding progress with my money decisions.
As long as you diversify your portfolio, any single stock or investment that you own shouldn’t have too much of an impact on your overall return. If it does, diversifying might be the right choice for you, as one can also try out other commodities. I now have a balanced portfolio that is yielding me profit thanks to guidance from Jonas W. Herman.
I’ve come across tons of people talking about him all over RUclips. I’m new to all this. Is he taking new investors?
Hermanw jonas (a Gma!L
Is he taking commissions for his services? Yes, I’m I still making money in the process? Hell yes!
Scam!
Jonas’ analysis isn’t just about short-term gains; it’s a solid long-term strategy. I have had great relief working with him as my previous experiences with others were dreadful.
Ramit I tell everybody to read your book, listening to your podcast, and watch your show. My sister recently visited and I was pushing your stuff heavy. Your methodologies are life changing and I can’t wait to see how much better my family will be down the line
Thank you!
Dear Ramit! I would like to add something important to your category „fixed costs“: Children! We have four children and I can tell you, they cost a lot between the ages 0 to 18. 😊 And a big compliment: your channel is so great and very inspiring! I love to watch!!!🎉
Op wouldn’t this be considered a variable expense?
Excellent point that Ramit missed! Children are super expensive and banks don’t ask about children when applying for a mortgage. I find that so strange.
How TF can you factor a fixed cost for Children. I mean whatever you are spending on your children would fit into the other categories
@@dec1slh some costs for kids (clothes, food, etc.) are indeed variable but for example school lunch, school fees, tuition and sports clubs are fixed costs that you can perfectly budget.
Can’t agree more, activities and classes cost more than $1000 a month for 2 kids
Close enough :)
Fixed 41.19% Investments 17.75% Savings 8.87% Guilt-free 31.94%
Kept my housing cost low. I'm living well beyond my means and status, people who works for me lives in a house that costs at least double of mine. Debt-free in over 3 years, no car repayments.
Now I'm trying my best to move some of the guilt-free spending in to Investments
you're doing great hell yea
Everyone read or listen to his book “ I will teach u to be rich “
Changed my life
It just came in the mail for me a couple days ago, already through chapter 1 :)
I will listen to your book this weekend in addition to many I have already!
Just to mention I have already listened/ read over 15 financial freedom books and many more hours of podcasts.
I can finally see everything in much better colors. Emergency Fund ticked. Pension saving automated (£250p/m). Investment automated (£100 per week or 20%). Credit card and bill payments are automated and paid in full and on time so no interest. Need to work on not looking at them every day. But will overcome that too soon. Lastly hope to learn how to spend on myself guilt-free, big ask just now but hey hope this will come too.
I LEARNED GREAT THINGS AND WISE THINGS FROM YOU! It's okay to spend money on important things in life. Life goes by in the a blink of an eye. I agree to enjoy our money responsibly.
I love this fresh perspective, Ramit! However I want to soft retire a decade (or more) before traditional retirement age so I think that skews a lot of these percentages. There's a direct correlation between the amount I save and the age at which i can soft retire. Therefore, I don't believe in oversaving. I live in my spreadsheet, save every penny, and geek out at watching my net worth grow, all the traits you poked fun at in this video. However, I absolutely love doing it this way. I still watch you videos and enjoy your alternative perspective on the matter. Thanks and keep it up, just wanted to share my perspective.
I picked up your book from my local library app to bide my time during a week long jury duty back in 2022. I read your book every year as a refresher. I watch your videos daily. I'm never bored and I'm forever fascinated.....numbers aaaaaand psychology?!?! 🤯❤👍🏼
dang this is really solid financial advice, thank you for sharing freely on RUclips Ramit
Our fixed cost is less than 10% of our take home. Drive a company car and live in a cash purchased house. Property tax and grocery are two biggest expenses.
okay mr money bags
is this where we're supposed to applaud you?
You get a cookie.
It’s amazing we are here to learn about how to be rich, and when someone does it, they are shamed by everyone else. Congrats to you! I hope to get where you are at.
@@coreypressler2714 did we watch the same video? Go back to @11:37
Ramit, I live in Argentina, a country with 25% inflation per month. Despite this, my mind has changed thanks to you and your couples coaching sessions, I wait for your videos with enthusiasm. Watching the sessions I've changed some beliefs and dynamics abt money. Now I am designing my rich life, I'm learning how to play big in this economic rollercoaster situation, the numbers are crazy but the mind is strong. I've made some investments, and encourage to start a project. Financial education and money psychology are the best! Thank you!
Che boludo!! 😂
I have never heard about your book but I'm very happy to have stumbled upon your channel. I am about to be free from paying the mortgage on my house in August and have started to research about how to grow the money that I will be freed up from.
I love how animated you get about this topic 😂😂😂😂
Thank you for all your rich information! On the course to retiring early and the Guilt Free Spending part was my favorite! 💪
Great video, well explained, thank you. Big fan!
Recently got your book completely eye opening. Now teaching my teens principles from your book 💕
Thank you for what you are doing Ramit! The way you show that not buying a house and how to look at personal finance has improved my aspect about money. Everyone wants to make more money but not many people (myself included) knows how much is enough and what is the purpose of saving and earning more?
Now I start to break down my number each month and slowly apply your method, it will take time for me to absorb all of your knowledge but I will be patient.
Also, I just finished you Netflix series, they are awesome and very knowledgeable.
Thanks for helping make finances simple. Great video! Also your video editor has done a great job 🙂👌
Great video, doing financial counseling I see the exact same thing you do, when it comes to housing expense alone people are running about 35-40% of their income just in the cost of rent. Currently one-bedroom apartments go for about $1400 and two bedrooms about $1800 which based on wages falls in line with that percentage. When I add in the car payment/insurance/repairs we are at or above the 50-60% that does not even get into the grocery expense!
Brilliant content/videos. I learn something new each time. Thank you for sharing your expertise!
This video was awesome thank you I will follow your tips
Love you tips, always so helpful!
Your book is still on my shelve. I am making a goal to read it this month.
#4 was a huge challenge for me, but your thoughtful videos are helping me n many others🙏🏿😊🙏🏿😊
Love this video…thank you 🙏🏽
Thank you. Your tips made me see money in different lenses. Spend & enjoy what you like while minimizing unwanted things.
Man!!!! loved your points...
Excellent Video.. Forced me to ask myself some serious questions 🤔
Ramit, reading your book & currently on chapter 4 - I’ve set up my budgeting strategy with relevant pots + about to open a vanguard managed ISA stocks & shares where they manage it for me & I don’t have to worry about anything other than the money that I put in (I thought this was only a USA thing, I feel so stupid 😂). I have 0 debt other than my student loan & I already feel like I’m in power over my money even though I have yet to finish your book in full. I bought it for 99p on my Kindle - probably will give me the best ROI ever! Thanks for the incredible content 👍👍
Be aware that Vanguard charges 0.30% of assets under management per year on their British customers.
@@excitedaboutlearning1639Thanks man, I saw they mentioned that! I think it totals to 0.60% to handle everything -> honestly more than fine with that, as I then won’t have to worry about anything other than putting the money in!
@@NM-hq1iothat's WAY TOO MUCH. Doesn't sound like much but it really is. Never, ever pay a percentage of your A.U.M. There's just gotta be a better way to let your dollars grow where you're just charged a small fee. In fact, Ramit has mentioned never letting a financial planner/advisor charge a percent of Assets Under Management because it robs you of insane amounts of money.
Avoid managed and just buy vanguards global all cap index - I'm up 25% with it atm.
I love that he teaches guilt free money for people to enjoy their lives. Love a rich life today and enjoy your money. Too many in PF hammer in a scarcity mindset. I like this. Keep it up, Ramit!
I think it depends. If you're like the average American and have already overspent, and now you're in tons of debt - on vehicles, on credit cards, on student loans - then until you catch back up, get out of non-mortgage debt, fill up that emergency fund, contribute to your 401(k), you should really cut those financial losses and stick to the basics for the most part. Maybe 5-10% at most on the guilt-free spending. I wouldn't say zero because I don't think it's sustainable and can lead to an overcorrection where you splurge like crazy on all the wants you've been depriving yourself of. But it definitely doesn't make sense for everybody in every situation to budget such a huge amount of money to fun.
@@isaiahayers1550 5-10% is too low. The point is balance. For people who need to get out of debt go to Dave Ramsey. If they want build wealth when they get out of debt, find mentors and learn how to invest including Ramit. I didn’t do any of what Ramit says and became a millionaire by paying off debt, setting up all bills on autopay, setting index fund investing on autopay and buying real estate. I enjoyed the rest and used technology to manage my money. To be fair I also have a high earning w-2. I am not a bean counter and I appreciate that he speaks to my crowd. We can be responsible and enjoy our money. I don’t work this hard to only enjoy 10%. Personal finance is personal and everyone has to do what’s best for them. Cheers.
Brilliant. Just bought the audiobook :-)
That's a great video and thank you for taking about the people who are 48 and over cos not many people in RUclips do
Hey...Ramit you really changed my perspective on money and life... Thanx for all your insights and wisdom... I have my own business and it's been tough the past few years but you gave me new hope.... Just wanted to know I'm from South Africa and I want to invest in the S&P 500 how do I proceed because Vanguard won't let me join since I'm not an Amercan citizen... I really want to invest in the more stable markets and I don't trust these sneaky brokers and companies... they're not here to help me just in it for themselves please advise... Thanx again for all that you do for so many people
Awesome! I love it. Thank you.
Watching your show on Netflix and now following you on social. Best part I like about your method is the Guilt Free Spending!! About time we hear about actually enjoying your life too!!
Thanks Ramit! Very good video. I will try to save more instead of investing it all. It is indeed a good feeling to be able to spend some money on things you like also. Life is very short, we all have to enjoy it now we can. ❤
“YOU FRUGALITY FREAKS” 🤣🤣🤣🤣 I nearly choked on my lunch 🤣🤣🤣
Great videos Ramit! i found your videos on accident a month ago. I cant stop watching your videos. i need your help!
Thank u for your video ❤ do you have an recommendation how to save money for traveling? I need to travel twice a year!? 🙏🏼
Best video yet! To me you have been the most impactful voice in the personal finance community, the money psychology aspect is so crucial. Have read the book but am loving the video content.
Thank you for watching and for the kind words
whispers "I CAN DO THIS. I DON'T NEED TO BE A PSYCHO!" 😅
😂😂😂
Loved this
The only financial advisor that shows you how to enjoy life today AND tomorrow, thank you Ramit you’re the best
🙌
I pay all my important things and then whatever is left i say is my play money. I've been able to make huge progress on my student loans and will be done with them by the end of the year while still having money to do fun things and shop
Ramit is one of the best personal finance coaches.
Interesting point about housing costs as a percentage of your income. I'm France 90% of landlords will not rent to you of rent is more than 30% of your income, and it is illegal for banks (with some small exceptions) to give you a mortgage where your monthly payments are more than 30% of your income.
Pause at 5:45 to see Ramit wrestling with an invisible sock puppet 😂. Great vid. Just what we need
Good advice on how to budget
Thank you
Awesome. Thanks
Love it! Simple yet very very true! 😊
Thanks
you got to love his videos
You're a gem.
started investing at 42 ive got 4 indexs now amd put at the least 740 a month between them not equally though but ive got my own system i was literally inly saving my moneys in a credit union only 🤓
"Frugality Freaks" made me chuckle 😂
@ramitsethi Personally i consider takeout & restaurants part of my guilt free spending. And my percentage goals are ways off, but they are always evolving (for the better, as i reduce fixed numbers). My current concern is how to not let the saved cash get eaten' up by inflation. Right now, at this moment i have CD's at various banks in ladder format, i know it's not enough to fight inflation but saved cash will never beat inflation, and the 5%+ rate gravy train will end eventually. What are your thoughts on taking any money above 6 month emergency fund and putting into safe bonds (good rating, well established companies). I figure by spreading them out over several companies and sectors it would be a relative save way to fight inflation eating away too much of the savings.
13:27 the first time I heard spending as a muscle was from dave ramsey, it made sense to me. The way you describe the details of spending and living that rich life are better understood and applicable than Dave’s method even though it clicked for me a few years ago.
I am just learning about this. I don't personally have this problem, but, after watching a ton of retirement videos, I was so sad to see all these retirees in the comments saying they don't know how to spend their money or even meet their required minimum distribution 🤯 all that saving and they never live their rich life, not even in retirement 😢
Masterclass!
I’m an over saver. I don’t go to enough concerts or vacations. And I’m missing out, I want to enjoy life, save and invest. This is why this year I got serious about learning finances.
Hah--felt called out by the last portion. Previous job had my finances in a spot to do ~20% savings, occasionally 30%+ light spending months. Got a new job with 85% raise, but was like "no lifestyle creep" and have sat on a 50%-65% savings rate for nearly 2 years now. Realized at some point along the way and created a separate savings account to earmark money set aside to spend on literally anything even if I don't have much to spend it on today as a frugal person who is satisfied with what I have. It's helped, but not fully; good to have that separate pool of money that says "under no circumstances should this be put into something for long term savings."
You are freaking awesome!
For me, it still helps to know what prices groceries are. Groceries have inflated in price of nearly 25% since the start of the pandemic. This coudl be $1,000 to $2,000 more per year.
Wonderful insights and vision. People tend to follow the income inflation trap (adding more costs to their household when they start to earn more). This will not help to become financially free.
I have a question what about the one we have debt car, or house how do we invest first to pay off all the debt???
I'm proud of you... didn't mention credit cards.... no wait!! YOU HAVE TO MENTION CREDIT CARDS!!!
DONT put money into savings or guilt free spending if you have credit card debt... That 20% debt is a killer of dreams!!
Your explanation of the extra 15% for “fixed costs” is the very definition of “variable expenses.”
Ramit, what is the denominator? Is it pay before any taxes, ss, Medicare, health insurance, 403b etc. or after all that is deducted (which is close to 40% less)?
Really like the video
Great video
I love this video ❤
Thank you for the video!! Here are some other thoughts you might like:
My personal philosophy has 20 beliefs I strive to live by:
1. “Love is the only rational act.” -Stephen Levine
2. We are all teachers, we are all students. We grow and evolve together.
3. Nothing about me, without me.
4. “Make Life Beautiful” from the song Beautiful by Storm Large
5. "Work is love made visible." -The Prophet by Khalil Gibran
6. I can like you, even though I am not like you. We are equals even though we are not alike. -inspired by the book A Wrinkle In Time.
7. The Universe provides.
8. Pain is (often) ignorance leaving the body. -paraphrased from the Tsunami Rangers
9. As you are art, so am I.
10. “Joy is the gift of love, grief is the cost of love, anger protects your love.” -Valarie Kaur
11. “That which is moral is that which feels good, (during and) after.”
12. If you don't heal from those who hurt you, you will bleed on those who didn't cut you.
13. "You can ask for anything in the world that you want, as long as you are willing to accept no for an answer." -Steve the Hippie
14. “Sit with reason, move with passion.” -paraphrasing Kahlil Gibran from The Prophet
15. “Those who have a 'why' to live, can bear with almost any 'how'.” -Viktor Frankl,
16. It doesn't have to be fun, to be fun. -from an unknown rock climber
17. We live in a world where anything is possible.
18. There is pretty much just one question in life to answer, and that is, how do you want to spend your time? -my step father Paul
19. The best way to predict the future, is to create it. -Peter Drucker
20. If you want something you've never had, you gotta do some thing you've never done. -Carlos Anderson, the Minister, from Hope Church
After watching this video I started to question myself about over-saving/over-investing. I started saving/investing in my thirties, and because of not starting earlier I believe that I have to compensate for all the time lost while feeling fearful that everything I do for now on won't be enough to guarantee my retirement. How can I deal with this feeling of uncertainty and fear that no matter what I do it's not enough?
Childcare is the thing that blew up our fixed costs up. While we knew kids would increase our fixed costs and planned accordingly, it is still surprising *how much* it really costs. Our monthly daycare invoice is twice our mortgage, homeowners insurance and taxes included!
Side note, love your book. I read it 5+ years ago and it really changed the way my husband and I manage and think about money. We suggest it to everyone!
When is it okay to substitute ur fixed costs with your investment income ?
5:47 WWE Ramit 😎🔥💪🏽
Good video. I think Fixed costs should be more like 40-50 percent but I too am conservative with money. Leaves more for investing, saving and the fun stuff.
I don't know anyone who has disposable income (category 4) any more because of hyperinflation of fixed costs
"...Their spending skills have atrophied..." 😢 I believe I'm there. I cannot spend without guilt, and when I spend I overspend.
I dont penny pinch, but I dont spend much. Im an over saver because I'd save to pay cash on everything except my mortgage. My guilt free is 15% giving/charity and 10% on myself. I find charity very fulfilling, and it aligns with my purpose. I'd rather give than take or treat myself (Im wired that way). Be blessed to bless others.
I believe this is for single young person. If the person has family, you need to account for
health insurance deductible, kids education, kids college fund, and life insurance if the breadwinner has young family. So 50% fixed cost is not enough in any geographic area unless the person makes high 6 figure or more income.
Ramit often talks with families with children on his Tuesday morning podcasts. It may mean a smaller house and a pre-owned sedan instead of an SUV or a truck. It does kids no harm to share bedrooms. I shared a room with my two sisters and we turned out fine. It may mean changing your phone plan and limiting your family's data consumption. And yes, it may mean that one spouse has to take on a side hustle or second job or work overtime.
Dear ramit could you explain more on investment
One thing you didn't mention for fixed cost is the cost of insurance which is a big one!!!!!!!!
Where do l buy the book?
I have to pay my health insurance myself and pay for day care. These two positions are 1000 Euro per month. Housing is less than that. I live in Germany and have private health insurance and two kids.
Ramit, your videos are getting better and better. But you never mentioned about how to 'protect our wealth' via getting the right types of medical & life insurance. A video on it soon, perhaps? - subscriber from Malaysia
HI Ramit, Ive listened to your book now (twice!) on audible and watched your netflix show. One question I have, in your example in the book and this video about savvy sally and you talk about compounding. does the compounding affect change if its over multiple accounts or does it all need to be in a single account. Example I have multiple pensions which my previous employers have all done a match on. However these are all in separate accounts. Is the outcome after say 10 years the same if they are in separate accounts or is my return less (assuming they are all identical in terms of investment pans etc)? basically should I look to combine them for a higher return or doesnt it matter
If it’s split into four accounts all with the same return rate or one account, mathematically the growth is the same. The thing you should worry about is what the return rate is for those different accounts, and in particular what fees they have.
If you have 100k in one account making 8% interest, that will end up being the same as having that same amount split in multiple accounts at the same interest rate. So to answer your question, no. It does not matter how many accounts you have your money in as long as the total balance and interest remain the same.
The return will be the same regardless of what accounts it’s in (assuming they’re invested in the same things). You’re still gaining interest on every dollar in there, even if it’s not combined into the same place :)
@@mguti090 thank you for the information
@@cubingkid thanks for the information
Thanks for this Ramit! Question, is the 10% investment & savings per person or as a household? E.g.: if we would split 10% of the household income for IRA & 401 in reality my wife & I would get each 5% to split (2.5% IRA 2.5% 401k)
most of the EU countries has a jobless insurance cover for min 6-9 months aprox 65% of the tax salary and health insurance cover. why I am saying it because I would like to know your opinion about 3-6 months emergency money bucket as you mentioned.
Dear Ramit is it possible to explain to people how important a 529 plan is? I believe if many people know about this they don’t have to rely on student loans all the time. What do you think?
Children Ramit! And in Africa, education is not free! Schooling 4 kids is expensive! And it's a fixed cost. 😅
but thanku for the formula 🙏
This formula is more for the people in the US.
Schooling, housing, transportation, medical, alles expensive in SA! It's because unfortunately the standard of public services is, well when there is service 😢
Would you agree there are periods of time where it makes sense to deviate from this general rule? E.g saving for a down-payment/move, debt repayment
Yes
If I maxed out my 401K and that leads to lower take home pay, should I be worry if my fix expense account 70% of my take home pay?
What about tithing? Is that fixed income? And what if my retirement contributions come out of my gross pay, not take home? How do I calculate that? Love your advice and just realized I might need to ease up on the savings. I am at 19%