Life has gotten in the way recently, but after listening to one of my favourite FIRE bloggers (Mad Fientist) podcasts and specifically his chat with Ramit Sethi, I decided to buy his book to delve more into it.
He was very good on the podcast, he came at it from an angle I’ve not seen before, ie. don’t just be frugal on everything, but spend on the things you love and be frugal everywhere else. Additionally, he raised very valid points about frugality breeding obsession in spreadsheets, forgetting to enjoy life and actually, depression.
It resonated with me as I feel I have become a bit like that since embarking on this mission and I do not want it to rule my life.
The book is largely aimed at 18-34’s in my view, and like all other books, teaching people to be mindful of spending, making sure you invest for the long term in passive, low fee index trackers, and in many ways its like any other book on the subject.
What differentiates him is his style of writing. I found it casual and engaging and so I would recommend this for your children, or anyone in that age bracket as I think it they may even finish it!
I liked his simple 60 Percent solution for looking at how you should try to apportion your income into each of the various pots (fixed costs/saving/investing/emergency), and used his calculations to figure out that my fixed costs are probably 10% more than they should be, and so its given me renewed vigour to cut down on the unnecessary. I also loved the idea that I can allow myself to spend, and he recommends 20-35% guilt-free spending money. He goes deeper into this in his Conscious Spending chapter which I found
I’ve been having 10% fun money for about 6 months, and beyond a decent build up of additional emergency funds, savings for the house renovation pot, and investments, I have literally spent nothing on myself. I thought this was a good thing, but I really do not allow anything fun for myself and I think this is having an effect on me as time goes on. Whilst I like that I’m not frittering money, don’t get me wrong, I have gone too far the other way. I have holes in the crotch of my jeans and I can’t bring myself to buy another pair as I don’t have enough disposable cash!
He expands on his book about FI and his mixed feelings on it, and that people are rushing to outdo each other in their Savings Rate, and forgetting to live. A poignant quote he picked up from a Reddit account was this “I look back at the last few years of my life and at my bank account and I would gladly give away a hefty chunk of it and work longer if it meant I could have experienced more of the world and found more passions I could have for the rest of my life, especially with someone I had loved so much. I built my savings, but I never built my life.”
Whoa. DEEEEEEEEP. But in all seriousness, likely true in a lot of people aiming for FIRE’s cases. This, again, resonated.
Lastly on the positives, one other action point I picked up on and used was around his organisation of automation in terms of where and when to apportion monthly income and into which accounts. I have always struggled with having joint accounts with my wife (who is not really into the whole thing) but actually he gave me some fresh ideas around how to ensure we are not overspending on the wrong things and how practical automation of money into different accounts can mitigate that. Also, crucially, trying to get your fixed bills changed so that they all arrive early in the month so you get them paid and know what you’re left with from the beginning of the month, is a great idea. I’ve been calling my various utility firms, etc to see if I can shift the direct debits to earlier in the month.
For the positives highlighted above, there is equally a lot of repetition from other books and I skipped a fair amount due to my knowledge on the subjects, but my main gripe is the title. Its not something I would read in public for one, but its a bit mis-leading, and I think, not doing him any favours. There is actually not much on investing strategy per se, and I also think his 11% (not incl. inflation) expectation on growth YoY is higher than other things I’ve read so I would be mindful of setting too high expectations with young people who don’t know any better.
He also is the king of self-promotion and the book is littered with soundbites from readers and how they’ve made amazing changes to their lives. That’s all very well, but every other page is a bit much and just feels like padding. Another obvious thing (but not his fault) is that its incredibly US centric and at times I switched off and skipped big chunks.
Saying that, if I was the target market (ie. me about 10 years ago), it would have been a strong 9/10.
If anyone wants to buy my copy, its in great condition as I read it in 2 days. Yours for $850k (coincidentally my FIRE number) 🙂