3 Steps to a Rich Life & Wealth 💵

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Learn the 3 steps to a rich life from the principles of Ramit Sethi. His money philosophy: automate finances, earn more, and diversify investments. Build wealth and security for a rich life.

About Alex Nottingham

Alex Nottingham, JD, MBA, is an entrepreneur, speaker, and best-selling author. He hosts the Inspired Purpose podcast and has written the book Counter Attack with Brian Tracy, with another book, My Uncle The Magician, in the works. Alex is the visionary/CEO of All-Star Dental Academy and hosts the Dental All-Stars podcast, reaching over 100,000 people annually. He holds an MBA and law degree from Florida International University and is a former top Tony Robbins coach. Alex is certified in neuro-linguistic programming and practices various personal development disciplines. His goal is to help others achieve abundance and fulfillment. He resides in Florida with his wife, son, and two dogs.

Transcript – 3 Steps to a Rich Life

Let’s talk about how to be rich. I’m gonna base our discussion on the principles of Ramit Sethi. Ramit is a bestselling author and the founder of the blog “I Will Teach You to Be Rich.” He also has a Netflix show called “How to Get Rich.” More than a million people turn to him for financial advice each month, which is not surprising given his unique money philosophy.

According to Sethi, many financial experts encourage people to focus solely on being financially comfortable. However, his focus is different. He wants people to maximize their potential and aim to build a rich life. There are three foundational concepts that he covers.

The first concept is to automate your finances. Success does not depend on willpower, as restrictive budgets often fail to sustain long-term financial habits. Instead, Sethi suggests automating accounts such as savings and investments. He advises against investing in unfamiliar financial vehicles and warns about “too good to be true” endeavors. A safe way to invest is through low-fee options like Vanguard or Schwab funds, eliminating the need for expensive financial advisors. The goal should be to match the stock market’s average returns of 7 to 9%.

Sethi’s second principle is conscious spending. He advocates spending extravagantly on things that bring joy while cutting costs on less meaningful expenses. Prioritizing and optimizing spending based on personal preferences is crucial. Sethi emphasizes that others should not dictate how individuals should spend their money. Considering the limitations of both money and time, wise choices should be made to focus resources on activities that bring joy and eliminate those that drain finances and time.

The third principle is to maximize earning potential by focusing on one’s business. Sethi believes there is no theoretical limit to how much one can earn, but time is a limiting factor. He advises avoiding “PETA” investments, which refers to endeavors that cause pain or distractions. Examples include real estate and startups that require significant personal involvement and can divert attention from maximizing earning potential. Sethi suggests staying focused on areas of expertise and investing in business and marketing skills. Delegating tasks and replicating oneself can free up time for more productive pursuits.

To illustrate the importance of expertise, Sethi shares an example involving his father’s investment in a startup developing electric bikes. Despite the concept’s appeal, Sethi questions the decision, highlighting the lack of experience in the specific industry. His father ended up losing a significant amount of money. Similarly, Sethi mentions the complexities involved in real estate rentals, such as dealing with payments, taxes, insurance, and building codes. To stay focused on maximizing earnings, one should avoid distractions and stay within areas of expertise.

Lastly, being rich encompasses more than just financial wealth. Sethi encourages individuals to define richness in various dimensions such as health, relationships, time, energy, and happiness. By following the three principles of automating finances, engaging in conscious spending, and maximizing earning potential, individuals can achieve true richness in their lives.