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We messed up. An apology from Ramit

Ramit Sethi

I want to apologize for yesterday’s email.

If you’re subscribed to I Will Teach You To Be Rich, you received this email yesterday.

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I see a lot of things wrong in that email.

  • “Guaranteed to beat.” (no, nothing is guaranteed in investing)
  • “People have always been stupid.” (why is this even here?)
  • “Made-up money that only exists on the internet” (all currency is made up…so what?)

Why did we send such an inflammatory email? One that doesn’t even represent what I really think about Bitcoin?

I want to explain how this happened, my actual views on Bitcoin, and finally what we’re doing about this.

First, my comments on yesterday’s email.

  1. It was unnecessarily dismissive of Bitcoin, which has had a major impact on money, technology, and culture in the last few years.
  2. It was over-sensationalistic and clickbait-y.
  3. It didn’t sound like us.
  4. It had nothing to do with the post it was linking to.
  5. It was not aligned with my view on Bitcoin.

In a world of hype, I believe in cutting the B.S. and being honest with you, and this email failed.

That No-B.S. view is why I don’t allow anyone with credit card debt to join our flagship courses, which costs us millions of dollars a year. One of our core values is “No B.S.” (it’s why that phrase is even on the cover of my NYT best-selling book). So when we’re guilty of it, we need to recognize it and apologize publicly. Yesterday’s email was B.S. We messed up. And we 100% deserve the heat from it.

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Plus the tons of responses on Twitter (you can see them using this search).

It’s no wonder that when we sent an email like yesterday’s, people were mad. I don’t blame them.

How this email went out

We have a team of dozens of people at IWT. While IWT started with just me writing, now we have teams of engineers, product developers, and writers. My goal is to share my views with our team, and together, we share them with the world. I do everything I can to empower my staff to create great material. We talk often about our company values, the ways we can push our students to think bigger, and the fun approaches we can use to help our readers live their Rich Lives.

In an effort to push the envelope, we got aggressive and got away from the things that made us who we are. We tried to take a hot topic (Bitcoin) to get you to click on a not-as-hot topic (lazy portfolios). There was no reason to do that. It didn’t add to anyone’s understanding of either topic. We should have led with quality and creativity and let the quality of the blog post stand on its own. We don’t need to resort to clickbait tricks.

Here’s a note from our Editor in Chief. But as CEO, it’s ultimately my responsibility.

Whenever a friend and I have a disagreement, we sit down and hash it out over some buffalo wings. So let’s clear the air. I’m going to share my thoughts on Bitcoin. You might agree or disagree, but you deserve to hear it straight.

A few starting points:

  • Money is a small, but important part of a Rich Life. I believe money is important, but there’s more to a Rich Life than a big bank account. I share this because money is important — but that’s not the sole thing that guides me, or our readers.
  • Investing is one of the most powerful ways to grow your assets. I’m no stranger to investing — I’ve invested millions of dollars, and I believe in investing your money and investing in your intellectual capital through books, training, conferences, and more.
  • Here’s where I invest my money. I invest primarily in passive investments — index funds — and I have a few individual stocks and angel investments. This is exactly what I recommend in my book on personal finance. I could make millions of dollars recommending terrible investments to my readers with fat commission fees…but I will never do that.

“Do you believe in Bitcoin technology?”

  • Yes, I believe in Bitcoin technology. We only have to look at the major impact Bitcoin has had to know that the technology is real. Beyond that, I don’t have a strong opinion on the tech. I have strong beliefs about Bitcoin as an investment — but as for the technology, I respect the technical innovations that are happening in fintech as a result of Bitcoin.
  • I’m critical of Bitcoin when viewed through the lens of asset allocation and personal finance. When I talk about Bitcoin, I’m not evaluating it as a technology. (See my above comment.) I’m critical of it when I see people investing all their money into Bitcoin.

“Do you believe Bitcoin is a good investment?”

  • Maybe. Undoubtedly, it’s beat all other asset classes in the last two years. However, I’m personally not investing in Bitcoin.

“So what is your problem with Bitcoin?”

  • Nothing, if you treat it as an investment in your portfolio. If anyone wants to invest 5% or 10% of their portfolio, great! In my personal finance book, I specifically encourage people to set their portfolios up, and if they want to invest a small percentage in fun investments, go for it.
  • But when people put all their money in one investment, that’s not investing — that’s speculation. 
  • The language around Bitcoin is filled with hype and handwavy arguments. As the price of Bitcoin gets higher and higher, the language used to talk about it becomes increasingly frantic and frenetic. The fundamentals of the investment (which nobody understands) become cloudier and focused purely on the price. If you look at Bitcoin investment communities, a huge percentage of the comments are simply people encouraging others to “HODL” (the community’s word for “HODLing” onto crypto for the long term) and get other people to buy more. There’s little recognition of how Bitcoin fits into an overall portfolio.
  • Your asset allocation matters more than any individual investment. This core investing concept is something I rarely see in the Bitcoin community, along with the core investing concept of risk. (Note: I’m using the term “risk” as the technical investment definition, not just “Can I withstand this going down 30% for a few days?”) Nobody needs to talk about asset allocation while the price of a single investment is skyrocketing…until it isn’t. I’ve had people call me “old man” and “Luddite” for not putting my entire portfolio into Bitcoin. That’s not sound portfolio strategy. There’s a reason why every sophisticated investor understands the power of diversification and asset allocation.

“But Bitcoin has beat everything else.”

  • True. But higher prices create lots of accidental geniuses. The higher the price goes, the more people think they’re geniuses. It’s easy to handwave against all arguments and simply say, “LOL! Look how much money I’ve made!” That sort of argument can seem like a mic drop. Until it stops working. When I’ve asked some Bitcoin investors how they think about their overall portfolio, diversification, asset allocation, a few have had good answers. Most have no answer at all. They simply say, “Dude, look how much money I’ve made.” Again, that’s not investing. That’s speculation. History has shown that long-term investing is more than picking one investment, no matter how high it goes.

“Are you just bitter that you missed out?”

  • No, I’m intentional about my investments. I’m not bitter that I “missed out” on Bitcoin as an investment (nor should you ever invest based on “missing out”). Again, if you’re investing 5-10% of your portfolio in speculative or fun investments, great.
  • I don’t mind if you disagree with me. I’ve taken heat for my views on real estate before. Same for my negotiation techniques. But millions of people read them, many used them, and we had vigorous debates. I don’t mind if you disagree with me, but we should have an honest discussion, not use cheap tricks and insults (like our above email). Investing is fun but it’s also serious, and it involves a lot of nuances. I want to have that kind of discussion with you.

So, to sum up:

  1. I’m sorry for yesterday’s email and I take responsibility for it. In 13 years, this is the second apology note I’ve written. That email didn’t reflect my views or our values as a company.
  2. We’re making internal changes to ensure that all of our material reflects our values. I know you have a lot of choices, and you read our material because you want to know surprising, counterintuitive, but data-backed methods to living a Rich Life. We’ve written about personal finance, business, psychology, careers, and more. And we’re going to keep at it.
  3. Thank you for trusting me and our team with your attention. We’ve got much more coming your way.

-Ramit

P.S. Now it’s time for me to stop talking and start listening. I’d love to hear from you. Do you agree? Disagree? I’m leaving comments open for the next week and I want to hear what you’d like to tell me about Bitcoin. What should I be paying attention to? How has Bitcoin changed the way you think about investing? Please let me know.

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12 Comments

 
  1. Abdo Riani

    Ramit,

    First off, if I ever mess anything up, I will be coming back to this post. No offense taken and I find your approach to addressing issues like this very well managed.

    As far as Bitcoin is concerned, I have nothing to add to your views. I see it more like a speculation but one that’s worth investing in no more than 10% of my portfolio. I find it extremely speculative even more than penny stocks. At least those stocks represent the performance of a company. I am not sure how to value Bitcoins if all it is that I can see is the number of transactions, participants and maybe its potential adoption by big companies like Amazon which signals some trust.

    In my opinion, at the end of the day, an investment in Bitcoin should be made and assumed to be lost. If it hits big, good for me and if it fails completely, that was a risk I was willing to take as long as it is not more than 10% of my portfolio.

    Abdo

  2. Tim Hegberg

    Ramit,

    I’m going to keep this short since I know you and your staff are busy. Disclaimer: I do have a small amount of money in cryptocurrencies (few hundred), but I earned it through mining and a bit of careful trading.

    I have to admit, you and your staff have got balls for sending that apology. As someone who’s f*cked up for clients before, I completely understand how devastating it is to not deliver on their expectations. I applaud you and your staff for putting this out and I’d just like to say that you haven’t lost me as a customer. I love your book, I wish I had the money on hand to take your classes (I’m saving, you’ll see me eventually) and the articles you and your staff put out are pretty good.

    Brief unsolicited advice: I’m honestly pretty skeptical about the value of cryptocurrencies and I refuse to put any of my own hard earned dollars into something that may or may not be worth shit in a few years. That said, I see the potential of the technology and I’d rather have the chance of getting a few dollars out of it than nothing. Maybe I end up with nothing in cryptocurrencies, but at least I have the rest of my portfolio. When it comes to crypto currencies, my strategy is this: Max out my 401k, max out my IRA, let my computer earn a few cents when I’m not using it, see where that ends up in value in a few years, invest whatever I earn back into my portfolio when I hit a few hundred. Simple equation, mostly inspired by information I learned from you.

    Anyways, thanks for all the hard work you and your staff put into this sh*t. Keep up the fight against BS. There’s far too much in the world.

  3. Harshdeep Mehta

    I believe, it's too early to predict Bitcoin as an Investment. Those who have capacity to take risk should try it, for others plain vanilla Index funds are best.

  4. pillow-cases

    I have confidence in, it's too early to predict Bitcoin as an Speculation. Those who have capacity to take risk have a duty to try it, for others plain interesting Index funds are preeminent.

  5. Tim

    I read your book and I basically mimic everything you've said. I also read Unshakable by Toby Robbins and your two books basically shaped my investing portfolio.

    I feel good that I was doing it right (at least in your view) the whole time. I have like 2k invested in bitcoin and I've obviously made a return on it, but some of my employees come in and check it first thing in the morning and I always tell them to be interested in other stuff.

    I'm a huge fan of BitCoin. I think it will level out the economy and make us less dependent on the Federal Reserve, but that's really as far as I go with it.

    Andreas Antonopolis did a few really good podcasts on Joe Rogan Experience which completely made me a fan of digital currency and the potential it has on life and society. You may enjoy it.

  6. DividendFamilyGuy

    I am still unsure of Bitcoin. It is Fiat but more cannot be "printed". I suppose instead of printing more another cryptocurrency will just come into existence. In the end I may use it if I can buy anything in the world with with it which it currently cannot (meaning I can walk down my street and use it for a cup of joe or groceries, etc.)

  7. Carrie

    I'm really impressed by your apology. One of the things I like most about you (other than the excellence of your content) is that you give it straight. No B.S., like you say. You caught yourself in some B.S., said "Nope," told us all about it and apologized. Case study in how to do things right. Thank you.

  8. Jae

    Great post and way to be open and honest when mistakes are made. Lots of people could learn a lot from this post instead of passing the blame along. I actually didn't read that email but this one caught my eye and it makes me trust and respect you and IWT even more. Thanks for writing it and being such a great role model in the business world.

  9. David

    This is definitely the most tactful and best way you possibly could have handled this. Way to take responsibility and be open about your views on bitcoin and the blockchain. In a world where EA is taking away refund buttons just to piss off it's users, as I'm sure you've seen on Reddit, this type of genuine and personal note is wildly appreciated.

    Keep up the good work. No BS.

  10. Omar

    I really don't understand everyone's confusion around bitcoin yet they continue to use green paper with numbers on it in every day transactions.

    A lot of people I talk to in commonplaces just keep saying "Bitcoin, I don't get it." Yet no one takes the time to educate themselves on the topic and what bitcoin and the blockchain really is.

    While they choose to remain ignorant, I'll continue cashing in on this asset and technology.

  11. David

    I will remember this email/post because it teaches 3 lessons in living richly:

    1. Ethics to live a richer moral life.
    2. Awareness of get-rich-quick propaganda.
    3. How to mitigate speculative risk.

    An act of generosity from a company that already adds so much free value.

    Thank you.

  12. JH

    You say you take responsibility, but you also make sure to point out that you didn't write it and it was the fault of some faceless editorial team. If you're going to take responsibility, just say it was your fault and leave the "inside baseball" out of it. Leaders in politics and business are always quick to blame some "group" in the organization and it just diminishes the apology.

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