I Will Teach You To Be Rich featured in US News & World Report online

13 Comments

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I’m featured in US News & World Report’s Alpha Consumer blog today. (New US News readers, please click here for an easy-to-use introduction to this blog.) Kimberly Palmer, a US News reporter, asked me these questions (and a few more):

  • “There are so many books out there on young people and money…what’s different about your advice?”
  • “What kind of stories do you hear from your readers who are frustrated with their financial experiences?”
  • “Name three things young people can do to improve their financial situation.”

In my responses, I discuss why personal-finance advice is usually boring, give some quick tips for getting started, and threaten to commit suicide if I read another column about not spending money on lattes.

Click to see my answers.

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13 Comments

 
  1. Whoa – you had me gasping by the first paragraph when you said that “half of recent college grads have failed to pay some of their debt.” Where did you get that number? (Yay for Stanford-trained dweebery…citations, please :)).

  2. In the article you sum up the whole issue with the personal finance world in 7 words:

    “There aren’t any secrets to personal finance”

    Saving and investing is not rocket science. Good article and congratulations on being profiled.

    The Dividend Guy

  3. Good advice on the first one of the three things. I see people spending so much time researching stocks to death, as if that would make any difference (if not, ask 90% of the mutual fund managers)… The law of diminishing returns certainly applies to the time spent researching stocks. It’s better to start early with an index fund and use the extra time to build wealth, pursue entrepreneurial projects, etc.

    Good luck with the book!

    Mario.

  4. ok….I gotta get something off of my chest. First of all, what you have been writing about here makes total sense. I have been following this blog off and on for about 8 months now…..
    But also, to be fair, nothing you say is particularly innovative or beyond common sense. All of this info can be easily had by anyone with the slightest ability with Google. I look at this site, the company you started, and all of the information therein, and I see another person who is very likely wildly successful. Yet the catch for me is that there is no innovative product here….this is all marketing of the same old stuff, nothing more and nothing less. I don’t mean to be critical, but as someone just slightly older than you — who reached adolescence in the pre-internet era (i.e. the 80′s), and then who worked in software for a pump and dump internet company in the late 90′s early 2000′s (H5 Technologies in San Francisco) — I do feel that I’ve been witness to a radical change. As it appears to me, it has become alarmingly possible to earn some measure of fame by repackaging a simple product on the web. Again, I’m not attacking you, but rather a certain web culture that has spawned as much true “value” as it has empty, recycled “value.”

  5. Congratulations! You deserve it!

  6. Akhil:

    For many many people, almost every self-help blog or book is “obvious.” For example, Steve Pavlina makes $1K/day off his blog and almost every post is something me and my friends already know. It doesn’t mean his blog is just marketing of old information. The fact that it is popular shows that some people are benefiting (or just like to read) his posts. This also applies to ZenHabits and all the rest.

    This is the Internet. The reason you can make a successful business just selling software that defrags your PC or changes your IE’s homepage back to the original is because of the VERY wide audience. Think of any regular store you walk into. They’ll have products that are worthless or counterproductive, and you would say “god, people buy this shit?” Maybe one person buys it a month.. but on the Internet, you can appeal to all of these people that are willing to buy it. 99% of people will view your site and ignore it, but that 1% or less can make you successful.

    It ain’t rocket science. It’s marketing — targeting a specific audience is what markets have always aimed to do. The Internet just makes this VERY easy and fast, and gives you the power to appeal to a target audience in the entire world, rather than just a specific county.

    In a few years, big corporations will control most of the large Internet sites and getting your rank up on Google will be damn near impossible. If you want to rant about something, it should be.. why don’t people take advantage of this before it’s too late? I’m young, but I’m sure this same thing happened when magazines started publishing ads and when TVs came out.

  7. Aara,
    I take your point — and I think I was making exactly the same point in my post. But where you celebrate this marketing opportunity, and the choice it give people, I see it as just more dross in the public sphere. Don’t get me wrong, I see clearly the ways the internet democratizes processes such that anyone with an idea can advertise/market what they have to sell. But this democratization has its cost in that success is measured not in terms of any originality or value of the product as such, but in the effective marketing of the product as being valuable and unique (when it is not).
    Of course no product is intrinsically valuable — we assign exchange values to them. My observation is that the internet seems (in certain cases) to have killed off the natural selection of the market such that absolutely anyone can sell anything, regardless of how useful/useless/original/unoriginal that product really is.
    Taking the example of the current site, it’s laudable that the author has seemingly done well with it. Again, I’m not criticizing him as much as I’m pointing out the fact that marketing fluff can get you far.
    At 35, I’m older than most people here, but not old enough (thank goodness) to have been conscious of the changes that occurred with the introduction of magazines and television. Nevertheless, I’m not sure that your analogy holds. Also, I think that the big corporations already control the large internet sites….and if you have the cash and a bit of knowledge, I don’t think it will be harder to up your Google ranking 5 years from now — you’ll just have to go about it differently than you might today.

  8. Akhil:

    The Internet (and particularly blogs) has turned information into a commodity. Virtually anything you write can be found somewhere else with one click of your mouse.

    While there is ample supply of information, there is a very short supply of attention, and only those who are able to capture that attention will be successful. In this day and age you don’t capture attention with advertising (or what you may call marketing fluff). You do it by engaging your audience in a two way conversation. Let’s review a few things Ramit has done right:

    a) He’s spent almost three years working his butt off for free to build this blog, writing compelling posts, and engaging in a lively conversation with his readers (not advertising, not marketing speak, but genuine conversation). He’s followed one of the most important marketing principles: give first, get later.

    b) While the concepts are not original, Ramit writes about them from a different angle: “how does PF relate to young people”. This is his niche, and he has more credibility there than others because he belongs to the generation of people he’s trying to reach. If you’re a college student , who would you rather follow: a 45 year old financial planner with Fidelity or Schwab, or a 25 year old entrepreneur who lives what he preaches?

    c) These days content is not as important as how it is packaged.
    To make his points Ramit uses examples that are entertaining and that resonate with his target audience. He has a unique sense of humor and writing style (his own voice). It’s how he “packages” content that makes his content engaging.

    This is the same strategy that Seth Godin employed to become wildly famous. What did he talk about in Purple Cow? Differentiation… You may say: for God’s sake! people have been talking about positioning and unique selling propositions since the 40′s, how can Seth sell so many books today just basically repeating this old concept?

    But then you notice that Seth gave away his first book before he became famous (give now, get later), built and nurtured his fan base through his blog, has a unique voice and sense of humor, etc. If I need to learn about marketing I rather read one of Seth’s books than a boring marketing textbook that esencially talks about the same things.

    Some people get marketing, some don’t. And I think Ramit gets it.

  9. Your US News article has been added to the Yahoo! Finance homepage as the first part of a 3 part series on 20-something finances! You’ll surely have a jump in clicks tomorrow… :-)

  10. Sethi complains of personal finance books that “most of them repeat the same old–and unhelpful–story. “, and further states “that personal finance has been taught by old white men for old white men for way too long.” Then he proceeds to provide us with the brand new, groundbreaking, earth-shattering, game-changing advice of:
    1) start early
    2) invest in an index fund
    3) budget wisely
    4) buy and hold
    Sethi is the one making money by repackaging the same old (good) advice one more time.

  11. Tom, I agree. When someone says that there are no secrets to personal finance, that is a repeat of the same old story taught by old white men. it’s how you package, market, etc. the message. there is nothing different between strategic purchasing and not buying another latte, it’s the same thing. there is nothing special about gen x, y, z: they still don’t want to hear what the old folks say, just like younger generations before them. everyone, especially the gen x, y, and z’ers think they are so much different and so much misunderstood when in fact this is nothing different. Bottom line, stop spending crap on money that you don’t have and start saving. Don’t know how people can write a book which essentially says this.

  12. It’s refreshing to hear such clear and possible answers. I just came from the US News link and read your answers word per word. The statistics you gave in question number one shocked me. I didn’t realize how “split” ( for lack of a better term at the moment) the financial situation of gen Y is. On one hand, you receive lower income (compared to the past generation) and on the other, you have the choice of luxuries that didn’t exist before. If this is the case now, what do you think is in store for the future?

  13. I think Akhil may be “too old” to benefit from this blog – I definitely am at 51 in terms of the information offered, but I’m learning a lot about my children’s generation.