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1-Page Summary of I Will Teach You To Be Rich
Overview
I Will Teach You to Be Rich is a book that teaches people how to become rich. It provides helpful and sensible advice for millennials who want to get out of debt, build their credit, and grow their net worth over the course of one’s lifetime with no quick fixes or special tricks.
I Will Teach You to Be Rich is a six-week plan for long-term, personal finance strategies that focus on building wealth over the course of decades. The book urges its adherents to forego small changes like nixing the daily Starbucks latte in favor of bigger goals they can achieve over time.
In the first six weeks, people should focus on their credit score. They should also choose a bank with high interest rates and begin to invest in it. In the next four weeks, they can start automating their accounts by transferring money from checking into savings every month. After that, they can decide how much of that money to invest and which funds to buy (mutual funds are risky but have higher returns than index funds). Lifecycle funds make investing easy because they gradually shift toward safer investments as you get closer to retirement age.
This book will help you understand how to protect and grow your money. You can do this by following the simple steps in it.
Key Takeaways
It’s not hard to be rich. All you have to do is set up your credit cards, improve your credit history, open the right bank accounts and invest in them for higher interest. Then you’ll know where you want to put all of your money so that it can grow faster than normal savings accounts.
Automate your finances so that you invest consistently without having to think about it. Avoid mutual funds and use index funds or lifecycle funds instead. Don’t try to make major changes overnight.
Key Takeaway 1: Anyone can be rich.
By Analysis
Being rich isn’t just about having a lot of money. It’s about being able to do what you want in life without worrying too much about the cost. Rich people can afford nice houses, cars and vacations, but they don’t have to worry as much as poor people because they make more money than those who are less fortunate.
If you really want to be rich, your best bet is to start early. There will always be fluctuations in the market, but over time, it has trended upward. The people who have the most opportunities are those that start early and stay with passive investments. Unfortunately, millennials are least likely to invest their money because only 26 percent of them do so according to a recent study.
Many young people fail to invest because they are afraid that the market will crash again, but most of them don’t need an expert. They simply overcomplicate investing and miss out on good opportunities. It is possible for amateurs to beat the market without paying anyone a fee; it’s all about having a simple plan.
Key Takeaway 2: Set up your credit cards and improve your credit history.
Having a good credit score is important for saving money on big purchases. Your credit report and your credit score are both part of your credit history, which lenders use to determine whether you’re a safe investment. You can improve this by paying your bills on time using a card that helps build up the amount of available credit you have. The best way to do this is to automate it so that you never pay late and don’t add more debt with those cards. Always keep the same card for years in order to build up high limits without adding more debt as well.
Credit cards can be a great tool for growing credit, but they’re also very dangerous. In 2015, the average American household had $15k in debt from credit cards—a number that rises every year. Nationwide, that’s $733 billion of debt. What’s more, it doesn’t include mortgages or student loans or car loans—the total is another $115k and $12 trillion nationwide.
