“I did all the right things… and look how it turned out”

Imagine someone who “did all the right things” their whole life. But as they enter their 40s and 50s, they look around and wonder: “Is that all there is?”

Ramit Sethi

Imagine someone who “did all the right things” their whole life.


  • Studied hard and went to a good school
  • Got a good job
  • Met a nice girl/guy and got married
  • Had 2 kids and bought a house
  • Saved some money as they grew older

Now, truthfully, for a lot of people, this works out pretty well. It’s not a bad life.

But for some, as they enter their 40s and 50s, they look around and wonder: “Is that all there is?”

Or worse, “I did all the right things…and THIS is what I got?”

We all know someone like this. They followed the rules…but find themselves in their 50s or 60s wondering what happened.

‘Wasn’t it supposed to get easier?’

‘Why didn’t someone tell me what I was supposed to do with my money?’

‘How am I supposed to get a job when companies are sending our jobs abroad?’

Most of these people took a traditional path: They “cut back” and saved on things like lattes and ordering appetizers when they ate out. That’s what they were told to do!

Yet when they’re older…and wondering why they’re still running on the hamster wheel, do you think these people look at their financial situations in their 50s…and wonder if they took the right approach?


After decades of saving, scrimping, and pinching on t-shirts and dish soap, do they ever stop to say, “Hey…maybe frugality wasn’t the right approach. Was there something I missed?”

Of course not. Because for most of us, the frugality approach is all we know.

Instead, as we get older, we blame the government…taxes…the media…the politicians….and anyone else we can think of. And the truth is, we’re partially right! Most of the “experts” talk about saving on worthless things (like lattes) and they ignore the Big Wins in life — like negotiating your salary, finding a dream job, investing early, and earning more. Why?

Because they don’t know how.

But there’s one group we never blame: ourselves.

It would simply be too hard to acknowledge that we’ve been wrong for 40 YEARS. That all the scrimping and pinching and saving…all the cutting back on $5 here and $10 there really didn’t make that much of a difference. That perhaps real estate isn’t the best investment. That maybe, just maybe, we should have tried to negotiate our salaries.

The invisible scripts are so deep, it’s impossible for people to realize they’ve chosen incorrectly.

For example, every one of us knows someone who bought a house because it was “the best investment you can make.” But when they tried to sell it, they realized they couldn’t sell it for as much as they thought. Do these people suddenly re-evaluate their decision to buy a house? Do they systematically study asset allocation and return rates and risk and realize, “Hey, wait a minute…real estate isn’t all it’s been cracked up to be!”

No. They blame the market…politicians…and anyone else they can grasp at.

This is why I have friends who bought MULTIPLE houses, got into hundreds of thousands of dollars of debt, had to discharge the houses…and STILL want to buy more! Their rationale: “Yeah…we just bought at the wrong time.”

When beliefs are that deep-seated — like the American Dream of buying a house with a white picket fence — it’s extraordinarily difficult to change them.

Here’s an example. In this stunning article, the New York Times reveals that real estate is not the perfect investment many Americans believe it is. But they quote a retired man who simply does not understand this — the “American Dream” is such an invisible script that even hard math — the math that he actually lost hundreds of thousands of dollars over his lifetime by investing in real estate instead of the market — won’t change his mind.

“Harlan Larson…views the four-bedroom home he bought for $32,500 in 1965 – or about $200,000 in today’s dollars – as a money tree. He and his wife recently listed it for $413,000. That would translate into an annual return of 1.2 percent, taking into account inflation and the cost of two new decks and an extra room.

They plan to move to Texas after it has sold. “I wish I’d bought more real estate,” Mr. Larson said.”

The cognitive dissonance of the lifetime of our decisions is so great that we find it easier to point the blame at other people — anyone! And that’s exactly what we do.

  • WE SAY: “I can’t believe these crooked politicians…all they do is scheme on how to raise my taxes and take my hard-earned money!”
  • WE DON’T SAY: “Maybe I should have learned how to invest my money in my 20s.”
  • WE SAY: “Unbelievable. What am I supposed to do? I can’t sell this house in this market.”
  • WE DON’T SAY: “Maybe I should have read one good book about real estate before I made the biggest purchase of my life.”
  • WE SAY: “These corporations are evil. They just try to make more money by finding cheaper workers.”
  • WE DON’T SAY: “Maybe I should have learned how to make myself the best candidate by cultivating mentors, becoming very good at my job, and building a network of supporters.”

After all, it’s easier to focus our inchoate anger on external factors than to look back at ourselves — especially a lifetime of doing what we were supposed to do.

Now, it’s important to note that a lot of this anger is RIGHT ON. Corporations and the  government HAVE treated us poorly and taken advantage of us. See, while I wish everyone would read 20 self-development books every year, set up automated systems, and crush their careers, that’s unrealistic. I do hold us partially responsible — for example, if we read even one good book on money, we’d likely have hundreds of thousands of dollars more and control over our lives — but that’s not practical for 300 million people.

But I’m not writing for 300 million people. I’m writing for you.

And that’s why I write this site. Because while others are complaining about the economy, the fiscal cliff, taxes, and corporate and immigration policy, we know that we should focus on what we can control.

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  1. Ryan

    It’s definitely easier to blame others than to take responsibility ourselves! Also, I find that the older the person is, the more stubborn they become in their beliefs. People only change when they want to change. Luckily Ramit, you’ve built a tribe of people who really care and want to make in change in their lives, whether though negotiation, travel, or automation!

  2. Naomi

    In regards to real estate not being a good investment – does the 1.2% ROI take into account the money for 47 years of rent that Harlan saved by owning his own house?

    • Jeremy Freeloev


      To answer your question about the effect of considering the saved rent… some reasonable assumptions (including the fact that the house was probably paid for over time with a mortgage) and quick napkin math leads me to estimate the return would be somewhere in the 5-6% range after accounting for inflation. To compare, the S&P 500 returned just over 6% during that time period.

  3. Gabe

    What’s wrong with the scenario listed (work, marriage, kids, house, retirement savings, surviving into a reasonably comfortable first-world retirement)? Why can’t people be content with that, which is far, *far* more than most of the 7 billion people on this planet can look. Is it greed, jealousy or a sense of self-entitlement that drives the constant need for more? Hard work does not guarantee wealth, the world is neither nice nor fair, and at least most of the people voicing disatisfaction are not wondering if they will die of malnutrition or disease before the new year.

    I fully agree that the people who complain should first seek to hold themselves accountable, people should *always* be accountable for their actions. A complete overhaul of corporate and government policy and mentality would be nice – people don’t have to be equal, but the bottom tier should not be getting such a rough deal as they currently are.

    I say this as someone who has just paid a deposit on their first apartment; the skills I bring to my workplace seem to be appreciated and people keep giving me bonuses/raises that I don’t ask for. I know earn as much as the average household income in my country and meanwhile kids are going to school hungry because they can’t afford breakfast.

    Also, people with materialistic urges need to feed them by playing MMORPGs rather than amassing vast fortunes.

    • Aims

      – Why are you equating a desire for more money as a sign of “greed, jealousy or sense of self-entitlement”? Don’t generalize, it depends entirely on the context.

      – and why are you asking people to play MMORPGs? They are the biggest waste of money and time. Been there. Glad, I kicked the habit.

  4. Stephen

    Ramit, the biggest thing I love about you and your site is that you are brutally honest. It is so refreshing to read posts like this and have you tell the truth. I’m sick of all the others and their it’s not your fault crap. JD over on GRS said it best, Nobody cares more about your money than you do.

  5. John Bardos - JetSetCitizen

    I’ve never felt at home in my home country of Canada because it seems that everyone has such strong consumer focused values that I don’t resonate with.

    I don’t want to work for 40 years in a career I hate. I don’t want a 3000 square foot house so far from the city center that I never go. I don’t want two SUVs and a vacation home. I don’t want to watch four hours of TV every night and make that the topic of discussion for the week.

    I think most people are afraid to want bigger things in life because that means they will be responsible for their own success or failure.

  6. Susan

    Some of us old geezers read Ramit’s book, follow his blog, and read his newsletters to learn new things. We even pass his info on to the younger people in our lives who seem too busy to read things themselves. Give us a break, though, because we couldn’t have automated our systems in our 20s. The PC hadn’t been invented yet!

    • Pat

      Here, here Susan! Not all people over 40 are set in their ways just like not all young adults are irresponsible. Be careful what you believe.

  7. Franklyn

    Wonderful start to my morning, I always learn something new from your e-mails. Saving up for your dream job course in a sub savings account.

  8. peachfront

    People in their 50s and 60s now did not voluntarily pursue frugality unless they were “dirty hippies,” rainbow people,” or some other despised group. Frugality was not a popular concept until the 1990s and someone coming of age in that era is not 50 today. The 50 and 60somethings who did what they were told spent money and they spent it lavishly if they wanted to fit in. Guys in their 50s and 60s are not having a midlife crisis because they did (or didn’t) buy a house. It’s about sex. Nobody of my generation cut back on lattes. Lattes didn’t exist. We bought boats and purple gambling chips.

  9. Chris


    I like that your brought up Culture Codes as I thought it was a worthy read. Do you have an culture code words for the work you do? Say a culture code for ‘finances’ or ’20-something’? I can’t remember if the author did one for money. Any others you could think of? I think it would be interesting to see what you would come up with. As always, thanks for all the free information!

  10. Kyle Collins

    Best Book(s) on Real Estate?

  11. Keyboard_Navigator

    Very interesting read Ramit and you made some wonderful points.

    Also, I always thought that the so-called “American Dream” was some overrated crap anyways.

    Government influenced corporations PR folks of the fifties and sixties dished that crap out like Mcdonald’s dishes out obesity in poor areas.

  12. Clayton

    I don’t think frugality is the problem, I think the American lifestyle dream is the problem. Sure, saving $3 per day on a latte might not matter that much, but not buying a $40,000 car will. Frugality is only a (cognitive dissonance) problem if you try to spend less while still buying into our cultural need to have a lot of useless crap. Spending less can give you just as many options as earning more.

    • James

      Except there’s no limit on how much you can earn. There IS a limit on how much you can cut. Eventually you’d be denying yourself food and water. Small material purchases within your income limits that make you happy day-to-day. I agree with your point that if you can’t afford a $40K car, you shouldn’t buy it, but wanting to own that car isn’t a bad thing in itself and there’s nothing wrong with increasing your income to afford that purchase if that’s what you want.

  13. Susan

    I’m glad you mentioned immigrants in the invisible script. I get tired of hearing about illegal immigrants stealing jobs. Which ones?? And how are they stealing your computer software job from you?

    While I’m sure there are highly qualified immigrants with professional jobs, there are many more immigrants working hard labor jobs on farms and in factories that no one I know would want. Even if unemployed.

  14. Humphrey

    Thanks a lot. This is a wake up call for us to take responsibility of our financial destiny. I agree that just reading a good book teaching how to invest or get a better job will have a huge positive impact in our life than trying to save few bucks.

  15. Gordon

    I think I’ll be content if I make it to 50 at this rate. Stress = cortizol = death. Not a winning combo. Add kids into the mix? Lets not go there quite yet.

  16. Lakhvir

    Only saving is not the right option because by saving you can’t have enough money when you retire. Although you lived a life in frugality you can’t spend an happy life when you retire.

    The best way is to invest proper money wisely and spend the rest of life with less stress

  17. durendal

    I like this article. I agree to most.
    One aspect of frugality I would update is the early saving. A $3 fancy coffee is worth way more in our early 20’s than when we are full grown-ups.
    The younger generations need to understand that in order to save early, they need to make sacrifices. A $3 coffee is an easy sacrifice to make when we are young.
    $3 X 20 days = $60/month X 12= $720 invested @18 years of age at a 10% dividend return. See what happens when they reach 40 years…
    We could say, where can we find a good return nowadays…
    This is something else I liked in the article: we need to learn to work for ourselves financially.
    We need to do our regular homework and research in our financial present and future.
    This is surely an aspect that has not been stressed enough throughout the past centuries…

  18. Tushar @ Everything Finance

    It’s very difficult to own up to things for ourselves. Instead we push it off onto others, or circumstances that we claim have nothing to do with us. I think seeing real estate as only an investment is dangerous. While it certainly was a good investment in the past, you never know what will happen in the future.

  19. Ann Söderblom

    How about these life/finance rules?

    – Build your own business vs. working for someone else
    – Love to learn and implement learnings immediately
    – Keep costs low, don’t buy luxury stuff
    – Invest continously in your business, knowledge, commodities such as gold, paper assets and property (Thanks R. Kiyosaki)
    – Meet the love of your life, marry him/her and get some kids and a dog :o)
    – Work to create a “job” you love so much you never want to retire
    – Live each day as a “mini life” with hard work, fun, sports, family, friends, contribution and so on…


  20. Dave

    I disagree with your look at frugality. As much as you say that cutting out on the little things like lattes doesn’t matter, cutting back $5 a day compounded over 40 years is close to $200K. That isn’t an insignificant amount of money. Although I do agree with you as far as maximizing income, if you don’t have the personal finance foundation for saving, no amount of money you make will keep you out of bankruptcy. Ask MC Hammer.

  21. @michaelhwan

    We follow these invisible scripts because that’s how most of us were taught early on by parents, siblings, peers, and mass media. Learn and dare to ask “Am I doing this for me or is this expected of me by society?”