The Ultimate Guide to Making Money

20 questions that your financially unprepared friends are afraid of

38 Comments

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Note: In many cultures, you would be considered a huge jackass for asking these questions out loud.

 

Head in sand

1. How much money do you spend each month?
2. Where does it go?
3. Where do you want it to go?
4. Are you rich?
5. What does rich mean to you?
6. Hey, how’d you pay for that iPhone?
7. How much do you automatically save each month?
8. Why’d you pull your money out of the stock market?
9. You’re always thinking about cutting down on spending. Ever thought about earning more money?
10. OMFG, are you REALLY planning to buy a house for the tax deduction?
11. If your employer has a 401(k) match, do you max it out?
12. Then pay off debt, invest in your Roth IRA, and — if you still have money left over — max out your 401(k)?
13. Once your money is in those different accounts, have you invested it according to some simple rules of asset allocation?
14. In the next ten years, you’ll have to pay for a wedding, new car, have kids, take vacations, etc. How much are you saving each month for those things? (In last week’s Scrooge Strategy tip, I showed how to do this tactically, along with a pre-built spreadsheet.)
15. 6 months ago, if I had told you the stock market would be on sale for 50% off, would you have invested more, less, or pulled all your money out?
16. You’re always complaining about money, but have you read even one book on personal finance?
17. When was the last time you said “no” when someone asked you to do something that involved spending money?
18. How do your friends handle their money, and how do you think it affects you?
19. What’s the one thing you could do today to start getting rich?
20. Why haven’t you already done it?

[Update]: Download a PDF version of these questions for easier sharing.

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38 Comments

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  1. Simple, people follow the herd and do the same. They don’t question just do it. They buy shit they can;t afford, shit they don’t need and shit others told them to buy.

    And when you confront them and come up with a stupid way to justify it and then they complain they lost their job and will lose their car and house.

    Yet they make no effort to learn finance.

  2. Why does Jackass and Honesty go hand in hand? It’s a shame. Real shame.

    -Nate

  3. #16 rings real true to me. Do people even know that these books are out there and can actually help them out? Probably not.

  4. People are lazy and expect others to solve their problems.

  5. My personal fav is; you could afford that vacation too, have you ever considered saving up slowly? I hate it when people complaing about others going on vacation. It’s simple don’t go out every weekend and after a few weekends you will save enough money to go down south.

  6. I don’t know if it’s peer pressure or what it is that prevents people from saving and being smart with their money or what it is.

    The barriers thing rings true for me, I confess. Once upon a time I worked in the silver business. Back when the commodity prices tanked last summer I could’ve bought silver under $10. Kitco today says about $13. Granted after refinery fees and all that junk my $1000 investment would’ve only made $150-$200 at the most and that’s being generous really but it’s still more return than it made in the bank, even my high interest savings.

  7. That is so true, i mean they go out and buy crap they don’t really need, when in reality they could have used the money for their vacation.
    Absolutely no commitment and focus

  8. Is the book going to have new and exciting information about personal finance – or will it be the same info as on this site and many other personal finance sites? Will it be much different from the Automatic Millionaire or Rich Dad Poor Dad?

    • Hey Mike, the vast majority of the book is new stuff that I’ve never written on this site — highly tactical steps that you can take to optimize your credit cards, bank accounts, investments, and automate your money. And yes, it will be much different than “Rich Dad Poor Dad,” because it will actually give you something actionable to do!

  9. Is the book going to be suitable for those of us outside America?

    Also don’t you just hate those sales incentives where they don’t tell you what you are going to get, 99% of the time I’m sure they do that just because they know the incentive is worthless!

    • The book stands on its own and doesn’t need any “sales incentives,” but I’m doing extra stuff because I want to. It’s a US-focused book, but lots of the principles apply to anyone. I’ll announce more about what I’m doing soon!

  10. My ultimate spending pet peeve (that I hear from others) is that he or she “deserves” new shoes or a vacation or whatever. You don’t deserve anything material that you don’t have the cash for!!!

  11. A site like Buxfer is really useful. Attach some kind of gadgetry to saving money and people will be more willing. Otherwise it is much too boring to deal with, and usually spending money is fun (except when it’s not).

  12. Mint is also a good site. Personally I find the constant news about “recession” & “unemployment” leaves me with recession-itus anway…

  13. [...] highly recommend opening up his article and placing it besides this (especially since I took a few liberties on my analogies and some are a [...]

  14. These questions aren’t easy for any of us to answer, but they are necessary to consider.

    The bummer is that most people will wait until our economy is in it’s current condition before taking the time to answer these questions.

  15. Hi Ramit, great post as always. I must say though that these are tough questions that absolutely must be asked out loud and are in my friendship circle. We, as a group, share tips/anxieties and overall philosophies on maximizing this one part of life that supports so many others.

    My only comment on this post and others, especially in the comments, is how waspish people get around financial issues. Yes, I know that people are silly, immature, care-free when they should be careful and overall not with it when it comes to finding the right sources for help and for prevention. And yet, waspishness doesn’t attract people to better spending, to better habits. Truth does. The only reason I really comment about this is because it has been so clearly demonstrated that other people’s better habits contributes to a better woven social net for all of us. Just let’s not stress ourselves out over complaints about others. Let’s learn from them.

    As always, thanks again to Ramit for such insight.

  16. For those who talked about Rich Dad Poor Dad, its a great “inspiration” book to start changing some of the negative surface thoughts people have about money. I agree it doesn’t really tell you specific actions of what to do about anything.

    I think of it like a “gateway drug” to other more serious financial books!

    Questions 15 to 20 are going to be fun to answer!

  17. I would love to use these questions in a facebook viral quiz!

  18. [...] 20 questions that your financially unprepared friends are afraid of | I Will Teach You To Be Rich. [...]

  19. [...] 20 Questions that Financially Unprepared People Fear If you read these questions and ever get a queasy feeling, it’s time to make a change. (@ i will teach you to be rich) [...]

  20. [...] preguntas a las que tus amigos financieramente no preparados le tienen miedo” (link, acá). Me gustó mucho porque creo que realmente te ayuda a pensar en lo mucho (o poco) que te importa [...]

  21. dammit, i paid for my iphone with a big huge bonus job i had- my old phone was breaking, i’m an apple geek, computer geek, gadget geek and a hipster freelancer in nyc who needs to travel all over manhattan, gets lost easily and needs to read emails on the go. $600 for a phone that keeps me informed, awake in the mornings, fed with stock prices, not lost, that gives me the number of that yummy thai place down the road, and then if god forbid i have to leave the city it plots out my route for me without ever having to come near a computer & printer. if i get lost in a questionable neighborhood in brooklyn on my bike, i can punch a couple buttons and it tells me where i am and which turn i missed. it calculates tips for me, helps me manage my budget on the go without excel spreadsheets, and as of last week is a teeny tiny sketch/paint book (i’m also a professional illustrator with a hatred of moleskins). To me, the 600 was worth it (plus then i got that crazy apple refund and got a freebie keyboard)- so I would appreciate a little respect for Mr. iphone!!

    • I have no problem with your entire comment…but WTF would you need to get stock prices for? If I ever meet someone who checks stock prices on their phone, I’m going to politely point at something behind them to distract them, then RIP THE PHONE OUT OF THEIR HANDS AND TRY MIGHTILY TO DELETE THE STOCK APPLICATION FROM THEIR PHONE. NOBODY NEEDS CONSTANT STOCK QUOTES!!!!! AAAAAAARGGGGH

  22. i like being able to check these things on a little tiny device without booting up my computer and the internet and google finance and excel and all that stuff- it’s just easier to have little applications on little devices. i only check that stuff online when I’m doing big money days, but it’s fun to flip to stocks occasionally and see how i’m doing. it’s like a tamagotchi, except it’s your money instead of a little monster.

  23. The best way to get rich is to tell other people how to get rich. Write a book, blog or whatever.

  24. [...] 20 questions that your financially unprepared friends are afraid of – I Will Teach You To Be Rich, Feb. 8, 2009 [...]

  25. [...] 20 questions that your financially unprepared friends are afraid of (I Will Make You Rich) – You’ve got to have a plan… [...]

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  27. # 15 is interesting. If I really believed that you could see into the future that accurately I would have done all three of your suggestions, but in sequence. First–sell (and wait), Second–invest less (and wait), Third–invest more now and in the future (and wait). The waiting is the tricky part since we all want instant gratification.

  28. Wealth / Money Expert for Teens – sharing the ‘best of the web’ this week…

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  29. Does a 403(b) work the same as a 401(k)? And is this a dumb question or should I just read the 75pg booklet I received from ING/my company in the mail?
    I work in the non-profit sector and I feel like my finances reflect this…

  30. Excellent set of questions, Ramit. Exactly the level of excellence we’ve come to expect from you.

  31. Great points. Funny that we talk about our sex lives with even casual friends but would rather die than discuss the status of our 401(k)s with our bffs.

  32. Nice post.

    @ Malia –
    FiLife, the personal finance site in partnership with the Wall Street Journal, provides a handy guide to 401ks here (the WSJ also posted it on their websites.)http://www.filife.com/guides/what-is-a-401k

    And you can ask questions about 4013bs here: http://www.filife.com/topics/401k/discussions

  33. Your friends and others have a right to be afraid of answering or asking these fincinal questions. Anyone who asked me these questions would get a very quick “None of your business”

    If I thought they were curious and not rude, I might not be so harsh and say: “I don’t answer that question.

    THe fact I am in show business means I have a lot of very rude people asking me about my money.

    You see, by talking about your money or answering those questions, you’re putting you’re business out in the street. And people will kill you for a dime. And if you’re stupid and got a big mouth, don’t go crying if something like that does happen. Yes, your friend might not say anything, but if you start talking about money like that, people ears perk up and do you really want to take the chance the wrong set of ears might be listening. If you need to talk aabout money question like that you need to see a fincinal advisor. They at least understand why it should be confident.

    In my case, I am a musician and I work the clubs and the streets. Anybody who asks me money questions like that is no longer a friend. In fact I see that people testing me. If I potilely answer their noisy question about my money, they don’t see it as as politeness but a sign of weakness. Since I work the club and streets, I see many illegal things like drug dealing and prostitution. If I had made it a habit of asking my friend these money questions, even if I was concerned, word would soon be out I’m too noisy for my own good.

    Now I doubt your reader deal with the low-lifes I see but for the life of me I can see no good reason whether the streets or the mansions you should ask or be ask these question by anybody

  34. [...] « 20 questions that your financially unprepared friends are afraid of [...]