Stop being cheap and go buy something valuable today

103 Comments

Let’s start the week off right: with me getting really angry and threatening to throw heavy things at people.

Guys, I am so tired of hearing about young people sabotaging themselves by being cheap. Not frugal, cheap. (There’s a difference.) Let me tell you why using an example from the recent IWillTeachYouToBeRich chat I recently held.

During the chat, someone asked me what I was going to do with the site in the future, and I mentioned how I was interested in using different types of media like podcasts, videos, etc. There was a lot of enthusiasm: “Yeah, Ramit!” they said, “you should do it!”

Then I decided to test the lovey-dovey emotions that we were all feeling. See, I’ve been getting lots of requests to do a regular podcast, but it’s a lot of work to do a really good one. That’s why I’ve been playing with the idea of charging for them.

Oh, man. When I mentioned this in the chat room, people went apeshit. They were dead set against it, and I watched the mood go from Kumbaya-happiness to dark indignation. Curious, I thought. Actually, I thought it was completely stupid, and here’s why:

Before I went nuts, I asked people, why not charge? And the reasons I got back were so breathtakingly absurd that I actually stripped out people’s names.

person1: don’t charge though
person2: yeah, please don’t charge
person3: I have universtiy debts to pay for… =… O(
person4: It feels punitive
person5: your good karma will come back to you muliplied if you do not charge
person6: because people dont want to pay lol my guess is you will lose many readers if they have to pay
person7: No charge….comeon! you cant ask us to pay to learn saving :)
person8: one thing that would concern me if you charged is that the quality of material would need to match the fee
person9: i think you should charge. you weed out the ppl who aren’t willing to make basic investments in their investments
person10: dont charge
person11: frankly your latest work hasn’t been great ;(
person12: we cheap :P don’t charge. we hear to save money here XD
person13: suze orman does not charge for her show
person14: Dude, there are people who CAN’T pay. (Me, for example, here in Bangladesh, I don’t have a way to pay for stuff in the web.)
person15: you’ve been giving out quality information for free, i think i’ve gotten used to it…
person16: Charging is not a succesful business model for editorial content on the web, currently
person17: people dont know what the advice is worth before getting it but you have to pay first
person18: you will NOT attract new audience members by charging….existing ones, maybe
person19: Payment is a barrier between the reader and the important information; I would think you of all people would understand how dangerous it is to erect even minor barriers for people.

Seeing this really pissed me off. In fact, these reasons are so ridiculous that I almost took out a sledgehammer and smashed my monitor, Hollywood-style.

Listen, if I decide to charge for podcasts–which I haven’t decided yet–then you can decide if they’re valuable enough to pay for. But please don’t use dumb excuses like “How can you expect me to pay when I’m trying to save?” and “I’m used to free stuff.”

The truth is that most young people don’t understand the value of money. Ooh, yeah, I said it. We don’t differentiate between cost and value. We’ll happily spend money eating out, drinking, or going to movies, but when it comes to paying for content or other valuable items–things you consider an investment–we balk. We’ve gotten used to everything being free, and when things start costing money, the result is a panicked “no way!” reaction. How do I know? Because I’m a young guy, and a few years ago I was saying stupid stuff like the above quotes, too.

* * *

When I was younger, I tried to save money on everything, whether it was a Coke or a major purchase like an iPod. I understand being on that end of the gradient. Now that I’m earning money, though, I see the value in spending money on things beyond eating out. Person9′s comment spoke to me:

“person9: i think you should charge. you weed out the ppl who aren’t willing to make basic investments in their investments”

Frankly, if you’d told me to spend more money on certain things back then, I would have ignored you. But hopefully you’re smarter than my past self. Also, you might have read enough on this site to know that spending on the things you love is perfectly ok.

Ben Casnocha put it well when he wrote this:

“What are the best corners to cut? In the Google cafeteria, the food is awesome, and the chairs and tables are pieces of shit. That’s a great example of cutting the right corners.”

Right on. Today, I see young people sabotaging themselves all the time by being cheap about the wrong things. “I’m not going to buy that book! It costs $27.95!” they say, not realizing that the book could inspire them to do something that would make them $10,000. That’s a 357x return. Or, “I’m not going to spend $15.00 on the more expensive cellphone plan–that’s ridiculous!” No, what’s ridiculous is you then not monitoring your usage and ending up spending $58.00 in overage fees in one month.

“But Ramit,” you might say, hiding behind a wall because of the mallet I am holding on this angry Tuesday, “how do I know that $30 book will pay off? What if I don’t get anything from it?” Jesus Christ, you don’t know! That’s called taking a risk! Unfortunately, I see a lot of people nickel-and-diming the really important things that could pay off explosively.

Instead of being guided by the invisible hand of stupidity, take some conscious control of your spending. Are you just spending on eating out? When was the last time you spent money strategically to try to gain something useful? Yes, it’s actually good to spend money on things you value. Yes, it’s important to spend money on things that will benefit you financially, intellectually, whatever. Yes, I’m encouraging you to spend money on certain things! In fact, here are some of the subscriptions and things I’ve spent money on:

  • A subscription to Before & After Magazine, to improve my design skills
  • A subscription to the Rhapsody music service, because I like finding new music without having to wait
  • A Rowenta iron, because I love ironing

This point of this isn’t to brag about how much I spend on stuff. Heh, frankly, it’s not that much in the grand scheme. And it’s a little different than my posts on Irrational But Good Things To Buy and Cost vs. Value. The point is to differentiate between spending on fun, and spending on things you consider investments.

In the quotes from the chat above, one guy said something like, ‘How can I spend money on a podcast when you expect me to save?’ Let’s get real here: Assuming the podcast (or whatever) is worth paying for, then you need to think more about whether it’s an investment or a simple cost. Does it have the potential to make you happy? Beyond that, could it give you the potential to make more than the cost of the podcast? Is there a trial or a refund policy? Is there some magical way of of judging if you think the content will be good (like maybe 2 YEARS OF POSTS?!?)?

This post isn’t just about my hypothetical podcasts, and it’s not about going to buy that iPod/coat/car you’ve really been wanting. It’s about not being cheap. It’s about using your money strategically by realizing what’s an investment and what’s not. So here’s what I want you to do. This week, go find something valuable you want to spend money on–and then go buy it. Yes, I’m telling you to go spend money on something you love and something that will benefit you in some way. Do me a favor and add a comment here telling us what you bought. Bonus points if you spend money on something that will turn your money into 10x what you spent (e.g., a good business book or buying lunch for your mentor to get his advice). Remember: You control your spending.


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103 Comments

 
  1. He huffed, and he puffed and he blew the house down. Just kidding Ramit. On the one hand I can see why this would upset you, but on the other hand, what did you expect?

    To be honest, your posts are in the top 99.9% of all blog posts on the web. The fact that I can get more out of one of your personal finance articles than an entire semester of personal finance at an Ivy League School should tell you something.

    But since you have yet to charge for content, or even have ads on your site (which personally I think you are crazy for) our perception is that you would always give us unlimited-Ramit-inspirations free of charge.

    It might be cool if you went at it like MarketingSherpa, where you release the podcast for a week to your newsletter list and then after that week people would have to pay. As a result, I think your newsletter list would grow a lot faster, of which you could supplement some income with a few text link ads in each newsletter.

    Or you could just charge, either way, you’ve got my attention.

  2. Ah, my friend, I have to say that my favorite part of this post was, “like maybe 2 YEARS OF POSTS?!” That was *golden*.

    I for one will support either decision you make (on charging), knowing full well that the effort you would put into making a podcast, if even close to the effort you put into this blog, will be WELL WORTH IT!

  3. Get your sledgehammer out, because I’m about to talk about charging.

    One effect I’ve noticed over time is this: desperate people will spend money on something, only to be disappointed that it won’t fix their problem quickly, and then they abandon it.

    Be careful that you very clearly explain that the podcasts don’t have all the answers, and that solid investments still take a long time to build.

    It’s not just financial desperation that can lead to this. Case in point, I once spent $40 (about 20% of my liquid assets at the time) on a new exercise outfit, thinking the cost would spur me into going to the gym again (kind of reverse-sunk-costs mentality). It didn’t work.

  4. Great Post! You’re dead on the money when it comes to not being cheap. Being cheap all the time will drain your life of things you love (other than all the nickels and dimes you’ve collected)

  5. Young people tends to ignore the value of advices because they have plenty of time to make mistakes and learn it the hard way.

    It takes time to become wise.

  6. True enough. That is what I think when I go buy books, as long as they give me one good idea they are worth the dollars I spent on them.

  7. Wow, looks like this really struck a chord with you. As well it should, this ‘all content should be free’ is stupid. People have many times commented on your own site about charging money for a product = evil (usually refering to Dave Ramsey – whose radio show is free online, BTW). Some of your readers somehow perceive you and your site as being more legitimate since you aren’t selling something. Thus, you now start talking about charging for some content and you’ve now joined the ‘evil ones’. What did they expect from someone who talks constantly about entrepreneurship?? Does your readership not think that you will ever have a book to sell? Or ebook? Or podcast? Or whathaveyou?

    Also – and I know I risk you filtering this comment out by saying this – I must say that it does not look like your “2006 Money Makeover” is working so well if your loyal following are not willing/able to shell out a few buck for a podcast. I mean, seriously – It’s not like you’re going to charge $50 per podcast…

  8. I’d prefer that your podcasts cost something. However, you need to understand that I now have higher expectations from your podcasts compared to your blog. I’d no longer be a user, but a real customer, and as a customer I have an expectation of value.

    As you say, you don’t want to produce something bad because podcasts can vary in quality. If I’m paying, I expect better quality both in recording and in content. If I put down a dollar or two for your first podcast, and I don’t get what I’m expecting than little is lost (who honestly can’t part with a dollar or two for one trial? Now we’re talking cheap). If I don’t like it or see the value, I stop. If I like it and see value, I continue.

    I don’t like this “phenomenon” of free everything. I WANT to pay because then I know you have an obligation to me for providing quality, and I know that you think what you’re offering has that value. It’s up to me to decide if that’s really true based on my values.

    Also, there is no risk of losing readers because you add podcasts, but require payment for those. If there is good quality posting, then people will read. If the podcasts are better (or more entertaining, more fun, more emotional, more real, more interactive, more convenient, etc. or any combination of those), than some percent of your readers will pay.

  9. First: I’d definitely pay for podcasts.

    Second: Along similar lines, here’s my purchases for the week (along with a bit of background).

    I’m turning 20 next month, in college, and engaged to my live-in fiance. We both came from less-than-ideal family backgrounds, so this allows us to support each other fairly well.

    I work full-time and spend about an hour a day stuck in the Orlando commute, so my first purchase is a short list of Audiobooks.

    I’ve ALWAYS been one of those teenaged “No way I’m paying for music downloads” sorts of people, so this represents a huge shift for me. But now, I’ll be able to put that hour to some better use, as opposed to the usual iPod playlists.

    …My second purchase this week was a brand new Vespa. Since my fiance only drives a mile or two to work every day, we can eliminate one car, four tanks of gas per month, repairs, and half of our insurance. With a 49cc engine, no special licensing/education is required, and it’s much more fun to ride.

    Keep up the great work, Ramit!

  10. Another excellent post!

    Your story just explains why some people never realize their dreams.

    It’s not by mistake that my favorite saying is: “Put your money where your mouth is!”. And it’s not about the money. It’s about people being very generous with other people’s money and resources, but very “frugal” with their own. About people being penny wise, and pound foolish. About using big words, but not translating them into facts.

    A person who is not willing to pay for a step forward is a foolish person. There are very few truly free things in this world. Even reading this post costs money, because it costs time.

    I am too poor to waste my life/time on (many of the) “free” things. Your blog being one of the exceptions. Be blessed!

  11. I personally can’t understand that you haven’t adsensed iwillteachyoutoberich.com yet :S … you must have your reasons!?

    I enjoy online content the same way other people enjoy the TV… just getting the credit card up and waiting for the podcast to download would be too much trouble for me to bother.

  12. Ultimately it comes down to *why* you want to leave a podcast on your website.

    If you feel it is valuable content for your readers then you will do it. If it costs you more money than the value you get from providing the podcast you will have 2 choices to make.

    Either you charge money to recover your costs (and possibly make a profit) or you won’t. You won’t add them to your site because the value to *you* does not outweigh the cost. It doesn’t matter what your readers think.

    Sometimes how a person defies the percieved “value” is what makes the difference in the end.

    If your readers are not willing to pay to subsidize the podcasts… then these podcasts do not offer enough value to them. Anything a person values is something they will pay for – sometimes despite the cost.

    Is your advice worth paying for?

  13. I would like to start off by saying great post. Next up is a question, have people forgotten about their local libraries? I am in my late 30s but a lot of your readers are young, possibly still in college or grad school. There should be a library in walking/biking distance. To stick with your blog’s subject matter, there are so many books on investing and personal finance it would be impossible to purchase them all. When I come across a book that I think might help or be of interest to me, I check my local library (online, no less). If they do not have the book, I check other area libraries and request it be sent to my local one (again, on-line). If the book was useful, I may purchase it for reference later on. I realize that not all of your readers are in the U.S., but for those that are the public library is a great commodity.

  14. I agree with #9- MyNameIsMatt. If you start charging for podcasts you are going to have to crank up the value. I wouldn’t pay for the content in this blog produced in a different medium.

  15. Fantastic post.

    I am a firm believer in ‘you get what you pay for’ and feel that you buy cheap, in the long you have cost yourself more money, then if you had simply bought quality to begin with. It may not always apply, but… It often does.

    As for paying for podcasts, I’d pay, depending on price point and quality.

    Lastly, being the huge music fan (and musician) I am, I intend on picking a new CD to listen to, enjoy, and learn from. Add to that purchase a new book (I have been eyeing a couple on teaching your children about investing). Niether will necessarily turn my $30 into $300 directly, but the former has the potential to save me money while the latter the potential increase savigns growth for my children over the next umpteen years.

  16. If you were to charge for podcasts, I for one, would not purchase them. Also, I do not identify with the above persons in your chat, which is why I am posting, and why I hope this comment is helpful to you.

    Me? I don’t listen to podcasts, there are alternatives that are worth more time to me. Books, newspapers and other blogs come to mind. True, this blog is one of a kind, but there are other blogs that are more interesting and worth my time to read much of the time.

    Reading your blog at this point has marginal additive to me–a lot of what you say I already do, and some of the others things you speak of I do not identify with. (Specific examples? I filled out your survey, so check out the responses on that).

    You will lose marginal users such as me in a transition to a pay-for-podcast–yes, I will still read your blog through an RSS reader, alongside 10 other blogs, as I do now. However, if it means less content, I will of course, frequent your site less as well. But perhaps you want to attract the audience that is not me. That’s completely understandable.

    As to the rest of your post…d ifferent people have different views on things, and I for one, will not go and buy something valuable today. Yes, I could think of things to buy, but there are others things I have in mind that are worth more of my time today–one thing is writing this post. Not all valuable things cost money.

    Don’t worry, I spend money on things I enjoy–just not today.

  17. debt-free said, “I must say that it does not look like your “2006 Money Makeover” is working so well if your loyal following are not willing/able to shell out a few buck for a podcast.”

    I am debt free and enjoy Ramit’s good advice. Despite that, I still would not pay for a podcast, because I’m not that interested. Unless it was very cheap and I felt that it was worth it.

    Dave Ramsey and Ramit give out mostly the same advice, so I don’t know why there is some tension between the two’s fans. The main difference I see is that Dave recommends NEVER using a credit card for any reason, which is something I disagree with but can understand his view. Both ways work well if the person themselves are motivated and consistent.

  18. I wouldn’t pay for podcasts because:
    a) I don’t listen to podcasts.
    b) charging sets up a barrier between the random-surfer and your content.

    I would imagine that most people on your site “randomly surfed” here from some other site, liked the content, and put the RSS feed into their reader.

    If I randomly surfed here, and had to pay for content… I would have clicked the “back” button without a second thought. Not because I hate dishing out cash, but because I have to create an account, give you my credit card info, hope my card is charged appropriately, yadda, yadda.

    At least for me, the psychological barrier is greater than the monetary barrier.

  19. David Allen’s Getting Things Done and Suze Orman’s 9 Steps to Financial Freedom. ~2 weeks ago.

    I was reluctant to spend the $20 (for both) after a summer of overspending. Best $20 ever spent.

  20. Maybe we don’t see your podcasts as valuable! You’ve been posting GREAT information for free for two years. You have made the standards of expectation high. People will be expecting way more if you charge for podcasts and that’s what I mean by saying, “Maybe people don’t equate your podcasts as being valuable, above the regular posts.” Just because poeple say that they will not be buying your podcasts or future posts does not mean they do not spend money on valuable things. Your humor and emotionally expressive posts are an essential part of what makes this blog great but this post shows a very ugly side of you. I suppose the best thing is the dialogue created, another great part of your site.

  21. Money recently well spent? Well, I havn’t quite spent it…but it’s about to be a computer cabinet I designed. My first job left me with enough money to pay rent, eat, and save a wee itty bit.

    Then I got a new job with better pay and continued to live as though I was at the first job. Back in March I filled my free time by starting an online magazine for swing dancers and realized quickly that piles of paper all over the living room floor were not going to cut it.

    So I sat down, checked out other computer cabinets and wrote down all the features I would use and need.

    I’m moving to a cheaper neighborhood that is just as far from work and as nice as where I currently live. The cabinet builder has my design and is ready to go so that I have one less thing to lug up/down the stairs at moving time. $700 to make my life and time more organized is fine by me.

    As for paying for a podcast…I wasn’t in the chat, but I’m assuming the details were to vague for anyone to really be able to complain. I bet we can saftely assuming the full details weren’t being discussed to say if the content/length of show/etc. would actually be worth paying for and what that would actually cost.

    5min of being told not to buy lattes — wouldn’t pay. 30min of how to choose negotiate a lower rate on a credit card — sure I’d pay a few dollars (it’s not that much different than 99cents for a song….)

  22. These comments are some of the best in recent memory. I’m seriously blown away that so many of you would be willing to pay for podcasts–assuming they’re excellent, which of course I’d try to make them–and I appreciate the other perspectives, too.

    But just a quick note that this post isn’t really about podcasts. It’s about spending money strategically on things that matter–and about differentiating between regular spending and investing. Podcasts were just the example that made me shake my fist in anger.

    I don’t know if I’ll do podcasts. If I do, I don’t know if I’ll charge. But you can be sure that this isn’t going to become some podcast site. I love writing, and you can expect to read much, much more from me.

  23. Paying for podcasts is fine by me, if anything I feel they will be MORE valuable than the free info. We often apply a value to items based on what we pay. For example if someone gives me a blank sheet of paper, it will most likely get tossed in a bin or something (0 cost = 0 value). If I have to pay 25p for a piece of paper I’ll make damn sure I get the best use I can out of it (much better value).

    Asides from that, I am flat broke (hugely in debt actualy) but I bought a website last week because I beleive it will make me more than I paid for it. I beleive buying assets is a good thing, no matter what.

    Keep up the great work.

    Matt

  24. I bought a new monitor to plug my notebook into. It felt great, no more excruciating neck pain.

    Considering I work on a computer all day I’d be stupid not to have.

    Hooray for me.

  25. Do you have an American drawl? If not, I’d pay. Otherwise I’ll just settle for reading.

  26. Of course you should spend your time and money giving away something valuable for free. Jeez, people are crazy.

  27. The interent is bursting with high-quality investment advice (and some low-quality). I don’t pay for any of it. You bet I understand the value of money… if so much good stuff is free, why part with cash? This whole person9 notion of “investing for your investments” is plausable, but do you really understand the enormous value of existing free services? Your focus on your reader opinions is misplaced. Examine the market you want to enter. I see your web site as a hobby in which you’re the #1 student. Fine. And I’m sure you’ll get some buyers. But the whole thing sorta makes me smirk.

  28. Don’t like podcasts.

    I speedread so I can whip through written posts quickly.
    Podcasts, can’t do that, can I?
    (or Ramit starts to sound like Minnie Mouse on speed).

    Plus hard to multitask while watching a podcast. Usually I read posts, listen to my business shows and flip between tasks.

    So I definitely wouldn’t pay to watch a podcast.

  29. I bought a new bicycle the other day. A combination of just wanting to own a road bike, and a rational desire of wanting to ride to work instead of drive. Even bought it used, getting a nicer bike for way less.

    I am excited.

  30. I actually just spent about $450 dollars on a 21″ widescreen monitor two days ago. I had been puting off buying a new monitor for weeks. I kept going through the pros and cons of one that expensive versus others that are one, two, or maybe even three hundred dollars cheaper. Finally, I just took a deep breath and hit the “buy” button on the site. I’m still wondering whether I will regret spending that money (I’m on a student budget, but I’ve been saving money specifically for a monitor; I’m borrowing one right now from my girlfriend). Interestingly enough, I saw yesterday of Lifehacker that a bigger monitor is “The Best Computer Upgrade Ever” (http://www.slate.com/id/2149179/). Now today, I see Ramit telling me that I should buy something expensive if it is worth it. Well, I’m a comuter science major and I do quite a bit in graphic design, so I’ll definitely get at least $450 dollars worth from it in its lifespan. Who knows what I’ll use it for once I get out of college?

  31. Great blog post!

    This just reassured me that my subscriptions to the La Times, Business week, and Forbes is not in vain.

  32. So i had signed up for fool.com. I’m thinking “i can be a great fool, and learn how to properly make money!!!”. SO, i read and participate and start learning. Then *BAM* the simple “put a nickel in the bank every day and it will grow” info was still available, but if you want to read this article on how to hedge this weeks stock, ya gotta pay!! And pay again, oh and can we interest you in these books we recommend at 20% savings, we won’t tell you if they will help or not, but check them out. Oh, and want to post messages about finances and stock?? start ponying up the dough.

    I guess bottom line, i don’t mind paying for information or a service, but there has to be a forest through the tree’s feeling, not a got em hooked now i up the anti to see how much i can bleed from them.

  33. Forget podcasts. I want to see video of your talks with Intel, college students, etc. I think that’d be neat.

    As for spending for value, a Value Line Investment Survey subscription is around $600 a year. Seems expensive, but the information you get from that thing can help you make a lot of money.

    “I don’t know any other system that’s as good.” – Warren Buffett

    So for $600, you get information that Warren Buffett holds in high regard. Worth it?

    As for buying something, I’m going to pick up a Palm T/X to help me stay organized as my role at my firm changes as I progess. I’ve got more and more going on and less supervision, so my old organization methods aren’t cutting it (pad and paper and memory worked fine for college and the first year of work). Also, reviewing documents and emails for the 45 minutes I’m on the bus some days will be invaluable to freeing up time for other stuff.

  34. I used to react similarly to those people that were angry about you charging money. I’m still only 20 but I’ve realized that paying for someone for quality content – or anything else – is only fair.

    I used to scoff at the idea of paying for music, but in the past 2 years I’ve bought nearly every song on my playlists from iTunes. It only seems fair that artists, record companies, any everyone else that has a hand in producing the music I like get paid for their work.

    It only seems fair that you would charge people for listening to quality content. The people who see the value of your website will surely pay you.

  35. I might pay for a podcast, although a free trial episode might be nice (maybe an intro to what the paid episodes would cover, gives me a chance to see if the topics appeal and the sound quality is ok).

    I would definitely pay for sections or all of the seminars you give – I live in Australia, so going in person isn’t possible for me. Online pod/vidcast would be a great alternative imho.

  36. I don’t listen to pods either, probably because I don’t even know what one is. Like radio, but on my pc? If I had to download it then I wouldn’t be willing to pay – too slow on my connection. I bet you didn’t expect this response to your question about paying! ;)

    The rest of your article was good – relavant to me anyway. Old as I am, I’m still learning how to spend wisely but not cheaply. Thanks.

    Maybe after I research what the heck a podcast is then I’ll earn your bonus points by investing in one.

  37. I took a day off work at my hourly job, my primary revenue source, to have lunch with a commodities trader I recently met. Total cost = $55 bill + ~$100 of foregone income. Absolutely worth it – I’ve made a friend that has real world experience in something that I am interested in, but lack real world experience in.

  38. I won’t be purchasing anything valuable this week, because two weeks ago I purchased a used truck. Without purchasing a vehicle, I wouldn’t be able to get to and from work or to go out and enjoy myself. Using this truck to get to work, and go out and have fun, I will make up the cost of the vehicle in a little over a year.

  39. Purchased the book:

    “The ultimate no holds barred, kick butt, take no prisoners, guide to productivity & sanity” by Dan Kennedy.

    Investment: $10.67 (and I bought it new…in an airport!)

    I spend a lot of time analyzing goals and thinking of ways to increase my productivity and effectiveness in life. Turns out, so does this guy, and he’s been doing it for longer than I’ve been alive – so needless to say, a lot of principles I am slowly starting to uncover on my own are explained in much greater detail and their value is much more clearly delineated. It would have taken me at least another ten years to: 1. be able to explain these principles and the ways in which they can be applied to my life and 2. be convinced of how important they are, how closely they are tied to one’s success – however they choose to define it.

    Thanks for the education, Ramit. It affects people’s lives (in the form of ACTIONS, not just great discussions). Keep it up.

  40. Fresh out of college and employed for six months at my current job, I bought a car. A brand new shiny Scion xB, the cute ugly pug dog of modern vehicles.

    I could have bought a used car, but I previously *had* a used car. I didn’t want another one. I needed a small, affordable, no-frills car with more modern safety features, good mileage, high build quality, and enough space to actually move junk around (being young, I figured I’d be moving a lot, and surprise, I move a lot!)

    I could have bought a 95 Civic or something for 2,000 dollars, but I bought a new car for about $16,000. I don’t regret a single thing – I’ve already had my butt saved by the electronic save-your-butt features (ever had someone pull out in front of you and hit the brakes on an expressway at 75mph in the rain?), I’ve moved my partner’s entire life 800 miles, and I get twice the gas mileage of my old car.

  41. I bought a macbook, blackberry, and a Lemond Racing bike.

    Yea!!! Thanks giving me the kick in the butt to spend my $$$

  42. Ramit,
    Go for it – this is a very cool site and I for one would really like to listen to podcasts of your ideas and thoughts on my iPod when commuting or chilling. Make the price 99c or something and it’s a done deal.

  43. Bree, yeah I do (see my post about ironing). I know, I’m a weirdo.

  44. Suze Orzman may not charge for her show, but she certainly charges for her books.

    On the other hand, some (like me) check her books out of the library rather than buying them for them.

    Anyway, I assume you’ll keep this blog as you expand into podcasts – maybe you could throw a “tease” about each podcast into your posts here, so people could evaluate whether they’d want to buy the podcast (and also, as a way to advertise the podcasts).

    I like the 99 cents idea.

  45. Do you pay for bandwidth? I bet you’ll make much more by cleaning up your site than you would charging for podcasts. Loading the entire website has to cost you plenty for each visit—please, archive your posts already.

  46. great rant. part of the reason i read your site and no other ones remotely connected to money is because you have this honest, human voice–not formal & pc like the stuff that puts me to sleep. thanks for writing…

    i “invest” money in books, all the time. it opens up worlds to me that changes who i am. it’s a good return.

  47. Ramit,

    What is the prove that you are financial savvy? Are your investments getting a 8 to 10% annual return?
    How do we judge you apart from your blogging?

  48. Ramit, I agree with what you are saying completely. I have always believed that if the *value* or something is great enough, I will have no qualms paying for it. That said, I really appreciate the work that you do and find your posts extremely helpful, but I predict that I will *never* pay you for a podcast. Why? Because there are myriad other bloggers giving similarly excellent advice either in blog or podcast form away *for free*. I think the problem that you will find is that your market (the personal finance blogosphere) is already saturated.

    Now, if all the other sources of personal finance advice suddenly dry up or take a turn for the worse, leaving you one of the sole sources of quality information, *then* I would consider paying for a podcast. Alternately, if you were to offer some other incentive to get me to join, beyond merely excellent advice, I would consider paying. You are the entrepreneur, so I’ll leave that part up to you ;)

  49. How can someone even compare Ramit with Suze Orman! (sorry Ramit, but you know what I mean)

    If someone wants to charge, they need to build up credibility first. Were you ever vice president of a financial firm? Stock Broker, Actuarist? Anything?

  50. “Loading the entire website has to cost you plenty for each visit—please, archive your posts already.”

    I doubt it. Bandwidth is cheap, and text barely uses any of it.

  51. i buy plenty of books on amazon thanks to recommendations by you and others who i have respect for.

  52. LoL charging ppl for podcasts, stop trying to grab money man, we all know your a greedy man, im not gonna pay for somthing that can be found free anywhere else, u might not be cheap but you are a greedy asshole. LOL

  53. I invested 24$ in a B&A account for 32 pdf because i’m a designer and it will help me in finding some ideas for my clients.

  54. I’ve only visited this site once or twice, but I have to say this post is pretty funny. Your rant: “I can’t beleive people don’t want to pay for content on the internets! Here I am trying to charge for content, but no one wants to pay for it!!! Stop being cheap and give me your money!! ”

    Where have you been? Charging for web-based content doesn’t work. It never has. People realized this 10 years ago. Sure, you can monetize page views and clickthroughs, but subscription-type models have never worked.

    The first time I visited this site, I thought it looked like a reasonably smart persons take on personal finance. I’ve changed my mind.

  55. I bought Anne Lamott’s “Bird by Bird,” a book about writing, for about $14. Normally, I’d shun paying that much for something frivolous, but my college professors used to quote this book in class, and writing is the only thing that has ever really made me happy. Even reading the first chapter made me feel inspired for the first time in a long while, which was worth the price of admission even though the payoff might not be monetary.

  56. Can anyone point me in the direction of a book with good advice for getting started with investing in Canada?

    There’s plenty of advice here that’s pertinent for everyone, but certain specifics have been detained at the border for further questioning.

  57. Why even discuss the matter? Put the podcasts up for .99 and let people download them if they want.

    I’ve downloaded and listened to many podcasts via my iPod connected to my car stereo; some of them 2 or 3 times. They’re perfect material for your daily commute.

    Think about iTunes. People went from stealing music on p2p sites to paying .99 per song. Some of us are willing to pay.

  58. Zooey: Because the point of this site isn’t just to make me money. It’s to discuss how to think about money and entrepreneurship. I’d rather have us all learning along the way (myself included).

    That’s why I discuss it.

  59. Indeed.

    I am going to SF to get my favorite store which I haven’t visited since last year. I will purchase an awesome blazer. It will be excellent. I will be extremely content.

  60. im guessing people dont think your podcast’s value is worth the cost.

  61. hey people. the post is not just about podcasts. try reading it again and maybe thinking about it for a minute. maybe you will understand. if you still don’t then i feel very very sorry for you

  62. I was going to say I wouldn’t pay for podcasts because I don’t listen to podcasts. For one, I like reading more than listening, because I can’t do anything else when I listen anyway (takes too much attention from any other task).

    However, I have at least 1 hr total of commute every day to school and I always wish I could get schoolwork done then, or at least something productive. I have a crappy radio transmitter for my mp3 player that doesn’t work in the congested LA radio spectrum ($30 sunk cost) so I’d have to get another adapter. This time a low-tech tape adapter (like $10).

    So maybe I would pay for podcasts if they proved valuable, even though I’ve never listened to podcasts at all…

  63. I baught some art supplies $50. I painted some paintings and sold them at Boston’s open studios. I made $850. I wish I had done this before.

  64. $25-30 on “Meet and Grow Rich” – I’m starting up a mastermind group. Wish me luck!

  65. blah blah blah blah It made me so angry that I wanted to kill a baby blah blah blah blah

    If the podcast is along the lines of the above I won’t buy it

  66. I wouldn’t pay to listen to your podcast b/c I haven’t read anything I don’t already know on your site. Granted, I like your site, but you haven’t said anything that hasn’t already been said.

  67. If you charge for your podcasts, you may find a lot of people buy the first one, just to see what your voice sounds like (Apu?), but they probably won’t be listening to your compelling content, because frankly, you don’t post much that can’t be found elsewhere. Live below your means, buy index funds, seek long-term gains, etc., is common knowledge for anyone halfway financially literate, and if you expect to sell successful content, you’ll need to step out of the box. And geez, stop complaining! Sounding like a bitter coot is no way to endear yourself to an audience.

    If you want, give podcasts a whirl. After all, what could it hurt? I won’t buy them, because I hate podcasts. I’d suggest you create one free one so people can get an idea of what they’re paying for before you start charging.

    I put $500 into my Roth IRA (equities index) this week, which left me too poor to actually buy the personal finance book I was reading at Borders.

  68. Information should be free. You don’t charge because you’re a moral person and you want to help other people with finances rather than profiteering off of selling information to clueless idiots.

  69. Listen, I was just pointing out that pay-for-play has yet to work for editorial content on the internet YET. I mean, if you said, “How would you guys feel if I put coffee in a recycled paper cup with a quote around it, added some syrup, and charged $7?” or “What if I sold a brief snippet of a song that you could only play on your cell phone for three times what it would cost to buy the whole song on iTunes?” I’d be there to steer you in the right direction, too.

  70. I subscribe to Money and Entrepreneurship magazine. I invest to improve myself. I would not hesitate to do the same if you podcast. I trust you can deliver something innovative and useful.

  71. I am really suprised by your arrogant rant. I invest money, I spend on books for learning more and I do read a lot. I dont think your podcasts (based on your blog which tells me what do you know) is really worth any money. I thought you were smart not anymore.

  72. Surprised the concept of donations hasn’t come up in this context. I have given money to podcasts I enjoy, somewhere between $20 and $50 one-time deals. I don’t know if charging per podcast or per month or whatever would be very workable. Suddenly downloading an entry becomes an investment decision, and I don’t like making lots of decisions. Put the content up free, and pester people to donate if they like it, I have a feeling this model works.

  73. your shared knowledge or rather story is actually good and motivating,but kindly could you specify or rasther give examples of the kind dof business that one can do.thanks in advance

  74. I actually bought wireless broadband the other day because working on websites on dialup is very hard to get myself motivated. We will see if this paid off.

  75. I think you had a great post. But, I feel it could have been without the vulgar language. Especially when you used God’s name in vain. Please be careful when you do this. I say this mostly for your own sake.

    Now, about the rest of what you said. I agree with you it is silly the way americans can be with their money. Yes we can be CHEAP! Most of this is due to the way children are raised. Parents need to realize that we are raising the future generation and we need to start caring about how are children view their finances. I have taught both of my children the correct way to spend money. But I could have been more careful with my own spending habits and what I would say around them. Such as “Wow, I don’t need that warranty it cost to much!” When I spoke things like this it opened the door for them to be skeptical about wise purchases.

    Thank you for sharing! I will be thinking about what you have said and apply what I can to my life. If you need to charge for your service to cover your cost then by all means, CHARGE!

  76. I’ve been on this website a grand total of less than one hour (I just found it; never saw it before this morning) and it has already added value to me and I expect that it will continue to add much more value.

    Podcasts are a (nontrivial) project and have cost to produce. Charging for them seems reasonable and in this case it’s well worth at least a modest price.

  77. I imagine it would be difficult to get new people to give up some dimes to listen to a guy informing them how to save dimes. Don’t get me wrong, your slap me in the face obvious advice that people need to hear regularly otherwise they go out and ruin their financial status for a totally raging weekend in vegas, ive done this, is very necessary. Only problem is that i would never trust a financial “guru” if he introduced himself with “give me 3.95″. I took your advice and pay zero attention to catchy “buy this stock before it’s too late” magazine adds. Wouldn’t you think that people purchasing your podcast before knowing what you offer would be just as stupid. I would probably purchase your podcast understanding that if you charged 99 cents that it would be appoximately $17.27 in 30 years with 10% interest compounded yearly. To me it is worth $17.27 to be reminded to be smart with my finances.

  78. Thanks for the wonderful blog, which I’ve learned so much from!

    I think the point of your post is great. But I think the in-chat anger directed so ferociously your way stems not from stupidity about the distinction between good money spending vs. bad money spending practices but rather a feeling that you’re violating the wonderful “free-ness” of so many online materials.

    I think, in other words, that it’s an online culture thing.

    Where does this culture come from? Habit, I think. Free New York Times (wonderful). Free software (amazing). And… free podcasts. I was just reading about an online dating service that is free. Ends up, the guy who put together the site makes about 10 million a year on ads. The site is lousy, but people use it because it’s… free. (I read about this for free on the NYT the other day.)

    I listen to A LOT of podcasts (none of which require payment). In particular, I listen to one series of language-learning podcasts where there’s a short ad at the end of the “show.” The guy who puts the podcasts together says, “And now a word from our sponsor, who has made this program possible.” Yicky, I know. But I’m oddly not offended at one little bit by this kind of thing (as long as the ad is tastefully short). I even listen to the ad, because I have such a fond feeling for the sponsor after getting this great free program.

    Somehow, it’s fine that so many of us are bombarded by ads online and not so fine if we have to pay for content.

    I would encourage you to use ads. You make money to offset your time and costs AND you don’t upset that deep inner part that so many of us have that balks at paying for certain genres of online content.

    Whatever you decide, good luck!

  79. Ramit, you should charge, of course.

    I like your posts, and have been a regular reader just recently after I found you while stumbling.

    I enjoy reading your posts and readers’ comments too.
    I like to say I am frugal on certain things,
    and absolutely not frugal on certain others.

    Now you asked about some of the big purchases. Yes, after thinking A LOT, I decided to buy a pricey language learning s/w. I have been wanting to learn
    French since high school, but did not have a chance to, with college, marriage, kids, job, you name it. And now, 18 years later, I finally think I have the time and money to pursue it. I researched my area for French teachers, checked out French lesson podcasts, did a bunch of calculations – whether having a teacher is worth it – it would definitely be more expensive than the self paced s/w, not to mention the flexibility of doing it in my own living room when I want to! So finally, I bought it 2 months ago, and I am having fun with it!

    Now, how much money will I be able to make out of it? Practically nothing, most likely. But the joy I get from learning something new, and the excitement from the challenge is, priceless. Not to mention the new friends I might make some day, all the new topics in my daily conversations..

    Yes, I am all for paying for something you think adds value to your life.

  80. I have been needing to work out lately (too much web browsing!) and this post has prompted me to go out and purchase the Playstation game “Dance Dance Revolution” that I have had my eye on the past couple of months (since of course I’ve been trying to save!) Going to the gym has bored me lately (like the past 2 years), and so I decided that the risk of spending $40 on the game + mat was worth finding out if I could Dance my way into shape as opposed to spending $32/month on a gym membership, which I could quite possibly end up wasting. (And btw, please no advice about how I can go outside and work out for free — winter is quickly approaching and I live in a place where that possibility is not exactly enticing.)

    Thanks for the motivation, and great post!

  81. Podcasts can be a bore. Reminds me of a lecture in college. I’d prefer more of a discussion. I haven’t been able to listen to more than 5 minutes of any podcast. Video podcasts, even if it’s just a person talking can seem more lively.

    But, saying “hey for 5 bucks I can show you how to make your $100 into $1,000 – click here and read this web page…” turns on the red flag scam alert.

    Good luck with whatever you choose.

  82. charge. reason: two words. Rush Limbaugh

  83. When it comes to charging for PodCasts, or really any other web-based content/delivery the decision to do so is EXCLUSIVELY the decision of the provider.

    Value vs. Cost. Not ours, yours.
    Content is not free to make (costing time if nothing else). Can you use it as a loss-leader to get people to look at other things? sure. Does it work well? In my experience: rarely.

    Should you charge? If you are prepared to enter the Value vs Cost argument with your consumers, go for it. If you are confident of your product quality (my entirely irrelevant opinion is that you have excellent material, which I personally would be comfortable paying for to some degree) than it is entirely moral that you draw profit from it.

    I’m hardly an Intellectual Property advocate, I think ideas should be free (as in unrestricted, not free as in beer) to those who need them. But as long as your advice and ideas are available to your target audience (which I would like to think of as financially challenged, rather than cheap and lazy) then it seems to be a solid idea. You’re certainly the best qualified to determine the monetary value of your product.

  84. Very new to the site, haven’t had a chance to read a lot of info. looks good. Comments on you charging for the pod cast is interesting. I buy factual/informational books to read in order to be better educated. I was asked how much I spent on a book one time and the person said “I can’i believe you spent that on a book!” I politely explained that I didn’t buy a book I bought the information a man had spent his life researching. Some people just don’t get it.

  85. David, that’s a great way to look at spending money for value. I love that.

  86. Am I only the one who finds it rather humorous that on the one hand the argument is being made that people should pay for content, yet on the other hand the author rails against the Motley Fool for asking people to pay for their newsletters?

  87. I’ve deep in debt and though I think twice before buying anything, I almost never think twice about ordering books.

    I recently bought a few hundred dollars worth of glassware and lab equipment for my chemistry hobby. It won’t earn me any money (insert joke about meth labs here), at least not in the short term, but buying equipment is something I’ve literally been putting off for years. “I’ll reward myself after I pay off my debt,” I always thought. That never happened, and I’ve been miserable for years.

    All work and no play is counter productive.

  88. I was directed to this post from the last e-mail newsletter which promised that it would explain to me why I should spent almost thirty dollars on a book. I would have expected some attempt to justify why buying books is better than borrowing them from the library (and then potentially buying the one or two that may be useful as long term references). What about libraries, Ramit?

  89. Libraries are great. I love them for books — but this post isn’t just about books.

  90. Libraries have more than just books! I use my local library to check out DVDs and CDs, too. Not to mention, the access to databases, ebooks and language learning software. I’ve saved tons of money not having to pay rental fees (I’ve never returned a library item late). Plus, my house isn’t cluttered with a bunch of stuff.

    I realize you say this post isn’t just about books. But you are using books as an example for stimulating the economy. Not everyone agrees with your advice there. Some people would rather save their money and only buy absolute necessities. I don’t understand why our culture is so obsessed with buying and having stuff. Do you really need a book after you’ve read it? It seems like you can always just go to the library to reference it. Google books has a lot of books online already, too, if you need to reference it online.

  91. Why would someone waste money by not using resources they’ve already paid for and go out and buy them again? (Your tax dollars paid for every book in your local library.) Oh wait. I see. If you use library books, somebody doesn’t get his kickback from Amazon. Never mind.

  92. Yes, I really care about the $0.42 I’d make off you buying a book. Or, maybe it’s a matter of you actually getting the book vs. saying you’re going to go to the library “some day.” Get a life please.

  93. I’ll usually browse through the bookstore at my local library. I have picked up some of Suze Orman’s hardcover books for $0.50, I also love Kiplinger, Money Magainze, etc. which I can pick up at the same bookstore for $0.10. If I do need to buy a book I always check online at Amazon.com because they have great deals on used books. Just food for thought!

  94. Im new to the site, but have found everything I’ve read so far very useful. First off, I should say that I could definitely understand if you decided to charge for this valuable advice. However, im actually somewhat surprised at your apparent anger to most peoples responses (maybe you’ve changed your opinion in the two years since you wrote the post). Why would you expect anyone to encourage you to start charging them for something they are currently getting for free? its just not in their interests — just like its generally not in your interest to give away something for free (I assume you get some value from running this blog, e.g., money, professional development/connections, fame, etc..).
    That said, I certainly do agree with your main point: people should consider the value of what they spend their money on (sub-point: information is valuable so don’t whine if you have to pay for it).

    Anyways, keep up the great work, and I hope you don’t start charging (but I’d probably pay..).

  95. I just found this blog of yours today, and as a random 19 year old janitor/artist, I’m going to tell you I’m impressed.

    Long term, LONG TERM. This I tell myself over and over. It’s difficult being so young, working as a janitor making $8.57 an hour, and trying to achieve your “dreams”. But I have to tell myself that it’s possible so long as I’m not a dumbshit. Boy would that piss me off, if I was a dumbshit.

    I connect very strongly with your message of spending for value. My parents wouldn’t buy me video games very often at the age of 12, they would say “You don’t need it.” But managing to get my hands on pokemon, paying $30.00 that I otherwise didn’t “need” to spend – got me thousands of hours of gametime. And also caused me to meet my fiance online. Getting me addicted to online activies, causing me to get a $1,500 computer for my artwork and online activities. Which caused me, five years later, to find that same girl again – get engaged to her at the age of 18 after seeing her ONCE in person – paying for the ring (and plane tickets) with artwork I made off that computer, travel hundreds of miles across the country to live with her and get full time jobs for us both, giving us more money than we’ve ever had before. Even though it’s shit money, it’s still a hell of a lot more than $1,530 that I spent on pokemon and a computer.

    And you know what, I’m spending another $2,000 on a new computer this coming March. And you can sure as hell bet it’ll pay for itself and a whole lot of other things in no time at all.

  96. Ramit, If you smash a monitor Hollywood style I would buy your podcast! All jokes aside there’s nothing wrong with charging for something you put time and hard work into. It is true that information on this site is available in other places but what makes one stop here to read? It obviously goes deeper than just the information that’s provided here. Maybe it’s his sense of humor. Maybe it’s the ability for him to relate to many of the readers. Maybe it’s the IWTYTBR community. The truth is Ramit wouldn’t ask you to buy something that he didn’t think was valuable and I’m sure he wouldn’t expect you to buy it if you didn’t consider it valuable. If you’re confused just ask yourself why you became a reader here in the first place?

  97. Great post. A lot of people seriously don’t understand how to balance out value and cost. Either they get something really cheap and an utter piece of garbage, or they splurge and get the name brand shiny new thing.

    * My 1Ghz 12″ Powerbook that I bought in 2004 and am still using it today as my home computer. I got it at an “educational discount”, which is just about as good of a discount you can get on an Apple computer. It was definitely not a “great” deal compared to some laptop deals that were very popular (it was a $1600 vs. $900 comparison) with all the discounts, but my friends who got laptops from the deal have seen more problems in the first year of ownership than I’ve had with my Powerbook for its entire life. (I’m not comparing Macs with PCs, just the prices of two laptops I could’ve gone with.)

    * A name brand running jacket from a factory outlet: a birthday present from my parents when I was in middle school. I still have it till this day and it’s in great condition. (Wore it almost every day in college, too…)

    * Shoes, shoes, shoes. I’ve found, even when I was a kid, that shoes from Payless wore out a lot faster than some particular name brand shoes.

  98. Ramit,

    If you provide quality, useful regular content, like weekly or bi-weekly I would consider paying for you podcast.

  99. I recently sold my iMac for $1500 and bought a $500 mac mini for those needs. Combined with my MacBook – my needs were mostly being met.

    In the last week work and class has been getting intense – the 2gb of ram in the MacBook wasn’t cutting it. Ordered 4gb of ram last night for $60 vs apple store – $150. Paid off waiting til I needed it – but was appropriate to spend when I did to match the 4gb I had in the iMac.

  100. This week I signed up for grad school! I am very excited. Hopefully, I will make it all the way through and become a CPA. :)

    By the way, I have a big nerdy crush on your blog.

    Rachel