Docs
Finance
Books
I will Teach You to Be Rich
A Rich Life

A Rich Life

Living a Rich Life happens outside the spreadsheet. After you have automated your money, now it just takes time, patience, and feeding the system.

The next layer of a Rich Life isn’t about recalculating your returns from compound interest. It’s about designing the lifestyle you want. And you should figure out what does being rich or rich life means to you.

Love and Money

After you know the basics of personal finance, it’s easy to live in the spreadsheet. What’s harder is knowing how to navigate money with the people around you: your friends, your parents, your partner.

Ignore the noise of money advice

Once you master personal finance basics, you’ll notice a lot of noise around money.

  • Noise from people around you

    • Family’s “hot stock tips.”
    • Friends mocking your approach or feeling insecure.
    • Others reacting oddly because your financial progress disrupts old patterns.

  • Noise from the internet

    • Advanced-sounding but often irrelevant tactics (tax-loss harvesting, crypto hype, etc.).

    • Overwhelming opinions that make you feel you’re not doing enough.

Don’t take negative comments personally; just smile and move on.

Ignore the noise. Remember: investing shouldn’t be dramatic or even fun—it should be methodical, calm, and as fun as watching grass grow.

  • Log in to your investment account no more than once a month—that’s it. If you’ve set up your asset allocation and are consistently funding it, stick to your guns.
  • There are no tricks or hacks to long-term personal finance. Live your Rich Life outside the spreadsheet doing things that matter, instead of “living in the spreadsheet”.

How to help parents who are in debt

This is one of the most difficult situations you may face in your financial life: r**

  • Parents rarely admit financial problems. They might drop little clues here and there, saying things like “Money is tight right now.”
  • Discussing money with them is hard but necessary!

Approach:

  • Start conversations gently

  • Focus on asking, listening, and assessing if they want help.

    Questions to ask

    • Where did they learn about money? What did their parents teach them?

    • If they could wave a magic wand and be in any financial situation, what would it be? (Let them dream here. If they say “win the lottery,” encourage them. What would that mean? What would they do? Then get more realistic: “Okay, let’s assume you can’t win the lottery. What would your ideal situation look like five years from now?” Most parents have pragmatic dreams.)

    • How much do they make per month? How much do they spend?

    • What percentage of their income are they saving? (Almost nobody knows this. Be reassuring, not judgmental.)

    • Do they pay fees for their bank accounts and credit cards?

    • What’s their average monthly credit card balance? Out of curiosity (use that phrase), why isn’t it zero? How could they get it there?

    • Do they have any investments? If so, how did they choose them?

    • Do they own a mutual fund or funds? How much are they paying in fees?

    • Are they maximizing their 401(k)s, at least contributing as much as their company matches?

    • What about other retirement vehicles, like a Roth IRA? Do they have one?

  • Respect their decision even if they don’t want help.

  • If they decide to receive your help

    • Take the 85 Percent Solution approach and figure out one or two major actions they could take to improve their financial situation.
    • Help them by breaking down overwhelming finance topics into small, manageable steps.

Should you tell your parents and friends how much money you have?

  • Sharing exact financial numbers with parents/friends may not be necessary, because parents usually care more about security, happiness, and family values than bank account balances.

  • You can communicate financial stability through:

    • Expressing gratitude for what they taught you.
    • Reassuring them you’re doing well.
    • Spending quality time with them.

  • Be aware: financial success can change relationships.

  • Ask yourself why you want to share numbers:

    • If it’s for reassurance, you can do it without figures.
    • If it’s for showing off, reconsider!!!

    Numbers without context can come off as arrogant rather than comforting.

Talking money with your significant other

  • Talking money with your partner becomes essential when the relationship gets serious (e.g., moving in, marriage, joint finances).

  • Goal: To agree that money is important to both of you and that you want to work together to help each other with finances

  • Attitude > tactics

    • Stay calm and nonjudmental

    • Ask open-ended questions.

      Sample questions
      • “I’ve been thinking about my personal finances a lot and I’d love to get on the same page with you. Can we talk about it?”
      • “How do you think about money? Like some people like to spend more on rent and other people like to save a certain percentage. I think I overspend on eating out. Speaking broadly, what are your general thoughts about money?” (Notice that I started off broad, then offered examples, then offered a confession about an area I’m not great in. Start by being vulnerable with your own finances.)
      • “If you could wave a magic wand, what would you be doing with your money? For me, I know I should be investing in my 401(k), but to tell you the truth, I haven’t filled out the paperwork yet.” (Another admission—only if true, of course.)
      • “How should we use our money together? Have you thought about whether you’d want to change anything?” (This is where you can discuss how you share expenses, if you’re saving toward joint goals, or what fun things you want to use your money for.)

The big meeting

This is the big day when you both lay bare all your finances and work through them together.

Preparation (4 - 5 hours)
  • A list of your accounts and the amount in each
  • A list of debts and what the interest rates are
  • Monthly expenses (see table for details on how to determine this)
  • Your total income
  • Any money that is owed to you
  • Your short-term and long-term financial goals

Meeting

1. Start by talking about goals (from a financial perspective)
  • What do you want?
  • What kind of lifestyle do you expect?
  • What about vacations in the next year?
  • Does either of you need to support your parents?
2. Review monthly spending
  • Keep an open mind. Show yours first.
3. Talk about your attitudes toward money
  • How do you treat money?
  • Do you spend more than you make? Why?
  • How did your parents talk about money? How did they manage it?

Objectives

  • To normalize talking about money
  • Build a “baseline” of money management, making sure you’re each saving and investing and paying off debt (if applicable).

Keep it upbeat:

  • Set a few savings goals (short- & long-term).
  • Use automatic transfers for progress.
  • Avoid overwhelming big purchases at this stage.
  • Shared goals strengthen commitment and teamwork.

When one person earns more than the other

How to handle money on a daily basis — especially if one of you has a higher income than the other.

  • Option 1: 50/50 split — simple but may burden the lower earner.
  • Option 2: Split proportionally based on income (fairer approach, e.g., Suze Orman’s method).
  • Other options:
    • Contribute proportionally to a joint household account.
    • Divide expenses by category (one pays rent, the other groceries, etc.).

Discuss it, come to an agreement that feels fair. Then check in every six to twelve months to make sure your agreement is still working for both of you.

What to do if your partner spends money irresponsibly

  • Directly criticizing a partner’s spending usually backfires - People absolutely hate to be judged for their spending,

  • Shift focus from the person to the plan:

    • Don’t argue about “too many shoes” → instead, agree on saving goals (e.g., vacation, car, holiday gifts).

  • Create a shared savings plan:

    • Calculate goals, agree on contribution amounts.
    • In future arguments, point to the plan, not the partner.

  • Be flexible:

    • You and your partner will almost certainly have different approaches to reaching your savings and investing goals
    • Different priorities are okay (e.g., one values organic food, the other travel).
    • As long as the shared goals are met, individual spending choices can vary.

Wedding

  • Cutting guest count doesn’t reduce costs as much as expected: 50% fewer guests = only ~25% lower costs.
  • Major savings come from fixed costs. -> Strategies:
    • Negotiate venue and catering.
    • Look for cheaper alternatives in fixed costs (e.g., photographer, invitations).

Should you sign a prenup?

  • Who needs a prenup?
    • Most people don’t (≈99%).
    • Useful if one partner has much more assets/debt, owns a business, or expects inheritance.
  • Purpose
    • Not about “planning divorce,” but about protecting premarital assets and debts.
    • Creates clarity and prevents future disputes.
  • Hard to find reliable prenup templates online—each is custom and tied to significant financial stakes.
  • Communication
    • Don’t let lawyers drive the process—partners must talk directly first.
    • Normalize money conversations early, so discussing prenups isn’t awkward.

Work and Money

Negotiating your salary at a new job is the fastest legal way to make money. Your starting salary is even more important than you think, because it sets the bar for future raises and, in all likelihood, your starting salary at future jobs.

Negotiating your salary

  • The single best time to negotiate salary is when you’re starting a new job.
  • Negotiating is 90% about mindset and 10% about tactics.
    • Most people don’t believe they should negotiate. They’re afraid of being “rude” or of having the employer rescind their offer. That almost never happens.
    • If you negotiate, you explicitly communicate that you value yourself more highly than the average employee.

The basics of negotiating

Remember that nobody cares about you

When you’re negotiating, remember this: When it comes to you, your manager cares about two things—how you’re going to make him or her look better, and how you’re going to help the company do well.

Negotiating tactic:

  • Always frame your negotiation requests in a way that shows how the company will benefit.
    • Don’t focus on the amount you’ll cost the company. Instead, illustrate how much value you can provide the company.
    • Tie your work to the company’s strategic goals—and show the boss how you’ll make her look good.
    • Highlight the ways you’ll make your boss’s life easier by being the go-to person she can hand anything to.
    • Highlight the ways you’ll help your company hit its goals. Remind that your company will make much more off your work than they pay you
  • Use the key phrase: “Let’s find a fair number that works for both of us.”
Have another job offer—and use it.

When you have another job offer, your potential employers will have a newfound respect for your skills. People like others who are in demand.

Negotiating tactic:

  • Interview with multiple companies at once.
  • Be sure to let each company know when you get another job offer, but don’t reveal the amount of the exact offer
Come prepared
  • Don’t just pick a salary out of thin air!
  • Do research to get a median amount for the position (e.g., visit salary.com and pay scale.com)
  • Ask current or former employees for the real salary range.
  • Bring a plan of how you’ll hit your goals to the negotiating session.

Negotiating tactic:

  • Do the real work before the negotiation room
    • Research
    • Talk to contacts
    • Define your target, realistic, and minimum acceptable salary.
  • Don’t just ask for money. Literally bring a strategic plan of what you want to do in the position and present it to your hiring manager.
  • Negotiate based on value you’ll bring, not just salary.
Have a toolbox of negotiating tricks up your sleeve
  • Think about your strong points and figure out ways you might be able to bring them to the hiring manager’s attention.

Negotiating tactic:

Have a repertoire of your accomplishments and aptitudes at your fingertips that you can include in your responses to commonly asked questions. These should include the following:

  • Stories about successes you’ve had at previous jobs that illustrate your key strengths
  • Questions to ask the negotiator if the conversation gets off track
Negotiate for more than money

Don’t forget to discuss whether or not the company offers a bonus, stock options, flexible commuting, or further education. You can also negotiate vacation and even job title.

Negotiating tactic:

  • Your line is “Let’s talk about total comp,” which refers to your total compensation.
  • Use the levers strategically: give up something less important to gain more of what matters.
Be cooperative, not adversarial.
  • It’s not about you demanding more or them screwing you for less. Negotiation is about finding a cooperative solution to creating a fair package that will work for both of you.
  • You should be confident, not cocky, and eager to find a deal that benefits you both.

Negotiating tactic:

  • The phrase to use here is “We’re pretty close . . . Now let’s see how we can make this work.”
Smile

This is one of the most effective techniques in negotiation. It’s a disarming technique to break up the tension and demonstrates that you’re a real person.

Negotiating tactic:

  • Smile!
Practice negotiating with multiple friends

If you practice out loud, you’ll be amazed at how fast you improve.

Negotiating tactic:

  • Call over your toughest, most grizzled friend and have them grill you.
  • Don’t laugh during the role play—treat it like it’s a real negotiation.
  • Videotape it if possible.

If it sounds ridiculous, think about the benefits of not only the additional money, but the respect you’ll get from your boss for a polished, professional negotiation.

If it doesn’t work, save face.

If negotiation fails, save face—either walk away or accept a lower offer temporarily.

If you accept, secure a written agreement to renegotiate after a set period

Negotiating tactic:

Your line here is “I understand you can’t offer me what I’m looking for right now. But let’s assume I do an excellent job over the next six months. Assuming my performance is just extraordinary, I’d like to talk about renegotiating then. I think that’s fair, right?” (Get the hiring manager to agree.) “Great. Let’s put that in writing and we’ll be good to go.”

Don’ts in a negotiation

Don't tell them your current salary.
  • Never reveal your current salary—companies use it to anchor their offer slightly above your existing pay.
  • If asked, respond: “I’m sure we can find a number that’s fair for both of us.”
  • If pressed, push back: “I’m not comfortable revealing my salary, so let’s move on. What else can I answer for you?” (Typically first-line recruiters will ask for these. If they won’t budge, ask to speak to the hiring manager.)
Don't make the first offer.
That’s their job. If they ask you to suggest a number, smile and say, “Now come on, that’s your job. What’s a fair number that we can both work from?”
If you've got another offer from a company that's generaly regarded to be mediocre, don't reveal the company's name.

  • When asked for the name, just say something general but true

  • If you say the name of the mediocre company, the negotiator is going to know that he’s got you. He will

    • Undermine that company’s reputation (often with valid points).
    • Shift focus away from salary negotiation to “why their company is better.”

    That will weaken your leverage in the negotiation.

Don't ask 'yes' or 'no' questions.
Instead of “You offered me fifty thousand dollars. Can you do fifty-five thousand?” say, “Fifty thousand dollars is a great number to work from. We’re in the same ballpark, but how can we get to fifty- five thousand?”
Never lie.

You should always be truthful in negotiations.

  • Don’t say you have another offer when you don’t.
  • Don’t inflate your current salary.
  • Don’t promise things you can’t deliver.

How to Save Thousands on Big-ticket Items

Big-ticket items like car and house, however, are where people most commonly make mistakes. They don’t comparison shop, they overpay because a salesperson cons them into spending too much, and worst of all, they then think they got a good deal.

Buying a car

From a financial perspective, the most important factor is how long you keep the car before you sell it.

  • You could get the best deal in the world, but if you sell the car after four years, you’ve lost money. 🤑
  • Instead, understand how much you can afford, pick a reliable car, maintain it well, and drive it for as long as humanly possible.

Steps

1. Budgeting
  • Ask yourself how buying a car fits into your spending and saving priorities
  • Look at your Conscious Spending Plan and decide what you’re willing to allocate toward your car each month
  • Knowing that there will be other expenses (insurance, gas, maintenance, etc.) involved in the total expense of having a car, you want to decide how much you want to spend on the car itself.
    • Example: With a $500/month total budget → only $200–250 can go to the car payment → you can afford about a $12,000 car over 5 years.
2. Pick a car
  • Pick a good car - you’re not just buying the car for today— you’re buying it for the next ten-plus years.
  • Any car you evaluate must fit within your budget. This will eliminate most cars automatically. Do not even look at cars you can’t afford.
  • The car must be a good car
    • Reliability: Avoid breakdowns; worth paying extra.
    • A car you love: Since you’ll drive it for years, make sure you enjoy it.
    • Resale value
    • Insurance costs: Small monthly differences add up over time.
    • Fuel efficiency: Critical for frequent drivers; affects long-term costs.
    • Down payment: Lower for used cars; $0 down on new cars means higher interest.
    • Interest rate: Depends on your credit; shop around and beware of dealership tricks.

Dos and Don’ts for buying a car

  • ✅ Do
    • Calculate Total Cost of Ownership (TCO): Factor in not only car price and loan interest but also maintenance, fuel, insurance, and resale value to avoid financial surprises.
    • Buy for long-term use (10+ years): Prioritize durability and value over looks
  • ❌ Don’t
    • Leasing
      • Leasing nearly always benefits the dealer, not you.
      • The two exceptions are people who want the newest car and are willing to pay a lot for it, and the occasional business owner who leases a car for tax benefits.
      • Instead, you should buy a car and hold it for the long term.
    • Sell your car in fewer than 7 years
      • The real savings come once you’ve paid off your car loan and driven it for as long as possible.
      • It’s much cheaper to maintain your car well and drive it into the ground.
    • Assume you have to buy a used car
      • Run the numbers. Over the long term, a new car may end up saving you money if you pick the right new car, pay the right price, and drive it for a long time.
    • Stretch your budget for a car
      • Set a realistic budget for your car and don’t go over it. Be honest with yourself.
3. Negotiate
  • Negotiate mercilessly with dealers
    • If you’re not a hardball negotiator, take someone with you who is.
  • Timing matters: Best deals come at year-end when dealers are desperate to hit quotas.
  • Use information services (e.g., Fighting Chance) to arm yourself before you negotiate.
  • Create competition (“bidding war”) among dealers to get the lowest price for yourself.
  • Save time: Handle most negotiations remotely, only visit the winning dealer to finalize.
4. Maintain your car
  • Think long term: Take your car’s maintenance as seriously as your retirement savings: As soon as you buy your car, enter the major maintenance checkpoints into your calendar so you remember them.
  • Plan ahead: Log major service milestones based on manufacturer guidance and mileage.
  • Routine basics: Regular oil changes, tire pressure checks, and keeping the car clean.
  • Keep records: Maintain a service log with receipts and notes for higher resale value.

Buying a house

Buying a house is the most complicated and significant purchase you’ll make, so it pays to understand everything about it beforehand. And you should understand that houses are primarily for living in, not for making huge cash gains.

Who should buy a house?

  • Affordability first: Ensure you can pay at least 20% down and cover all monthly costs (mortgage, insurance, taxes, maintenance).
    • Bottom line: If you don’t have enough money to make a down payment and cover your total monthly costs, you need to set up a savings goal and defer buying until you’ve proven that you can hit your goal consistently, month after month.
  • Consider total costs: Homeownership costs are 40-50% higher than rent once taxes, insurance, and repairs are included.
  • Buy within budget: Start with a “starter house” rather than your dream house; trade-offs are necessary.
  • Plan for long-term: Stay at least 10 years to offset high transaction and moving costs.

Buying a house changes your lifestyle forever.

  • No matter what, you have to make your monthly payment every month—or you’ll lose your house and watch your credit tank. -> This affects the kinds of jobs you can take and your level of risk tolerance.
  • It means you’ll need to save for a six-month emergency plan in case you lose your job and can’t pay your mortgage.

The truth: Real estate is a POOR investment for most individual investors

  • Real estate is a purchase first—a very expensive one—and an investment second.
  • If you’re thinking of your primary residence as an investment, real estate provides mediocre returns at best.
    • High risk and poor diversification: Concentrating wealth in one property is risky
    • Hidden costs reduce gains: Taxes, maintenance, interest, and opportunity cost matter! (We fool ourselves into thinking we’re making money when we’re simply not. 🤪) Over time, long-term stock market investments beat real estate returns.

Practical advice:

  • Treat buying a house as a purchase, not an investment;
  • Do homework, negotiate,
  • Hold long-term, and
  • Know your alternatives: e.g., consider renting as a viable alternative

Buying vs. renting

  • First, get rid of the idea that renters are “throwing away money” because they’re not building equity.
  • Buying has hidden costs beyond the sticker price.
  • Homeownership costs include mortgage interest, taxes, maintenance, renovations, and transaction fees, while renting frees up cash that can be invested for potentially higher returns.
  • Best choice depends on individual situation: city, income, long-term plans

Becoming a homeowner: Tips for buying your new house

  • No “secrets” to buying a house, but many underestimate true costs

  • Stick to tried-and-true rules: 20% down payment + 30-year fixed mortgage, total monthly payment ≤ 30% of gross income

    • If you can’t do that, wait until you’ve saved more.
    • It’s okay to stretch a little, but don’t stretch beyond what you can actually pay. If you make a poor financial decision up front, you’ll end up struggling—and it can compound and become a bigger problem throughout the life of your loan.

  • Good decisions give control over expenses and free up money for investments, vacations, and lifestyle choices

Things you’ll need to do to make a sound decision.

Check your credit score.
  • The higher your score, the better the interest rate on your mortgage will be. Good credit translates into not only a lower total cost, but lower monthly payments.
  • If your credit score is low, it might be a better decision to delay buying until you can improve your score.
Save as much money as possible for a down payment.
  • Traditionally, you have to put 20 percent down.
  • If you can’t save enough to put 20 percent down, you’ll have to get something called Private Mortgage Insurance (PMI), which serves as insurance against your defaulting on your monthly payments.
    • PMI typically costs between 0.5 percent to 1 percent of the mortgage, plus an annual charge.
    • The more you put down, the less PMI you’ll have to pay.
  • If you haven’t been able to save at least 10 percent to put down, stop thinking about buying a house.
Calculate the total amount of buying a new house.

  • Because the numbers are so big when purchasing a house, even small surprises will end up costing you a ton of money.

    • The closing costs —including all administrative fees and expenses—are usually between 2 and 5 percent of the house price.

  • Ideally the total price shouldn’t be much more than three times your gross annual income. (It’s okay to stretch here a little if you don’t have any debt.)

  • Don’t forget to factor in insurance, taxes, maintenance, and renovations.

Get the most conservative, boring loan possible.
  • Choose a 30-year fixed-rate mortgage: safe, predictable, and flexible.
  • You can take the full thirty years to repay it or pay extra toward your loan and pay it off faster if you want. But you probably shouldn’t.
    • Consumer Reports study: investing beat prepayment 100% of the time over 20 years.
Don’t forget to check for perks.
  • The government wants to make it easy for first-time home buyers to purchase a house. Many state and local governments offer benefits for first-time home buyers.
  • Don’t forget to check with any associations you belong to - you may get access to special lower mortgage rates.
Use online services to comparison shop.

  • Do research online, e.g.:

    • Use Zillow, Redfin, Trulia to research homes
    • Compare home insurance via Insure.com

  • Don’t forget to call your auto insurance company and ask them for a discounted rate if you give them your homeowner’s insurance business.

Myths about owning a home

Prices in real estate always go up” (or “the value of a house doubles every ten years”).
Not true. Net house prices haven’t increased when you factor in inflation, taxes, and other homeowner fees. They appear to be higher because the sticker price is higher, but you have to dig beneath the surface.
You can use leverage to increase your money.
Homeowners will often point to leverage as the key benefit of real estate. In other words, you can put $20,000 down for a $100,000 house, and if the house climbs to $120,000, you’ve effectively doubled your money. Unfortunately, leverage can also work against you if the price goes down. If your house declines by 10 percent, you don’t just lose 10 percent of your equity—it’s more like 20 percent once you factor in the 6 percent Realtor’s fees, the closing costs, new furniture, and other expenses.
I can deduct my mortgage interest from my taxes and save a bunch of money.
Be very careful here. Tax savings are great, but people forget that they’re saving money they ordinarily would never have spent. That’s because the amount you pay out owning a house is much higher than you would for any rental when you include maintenance, renovations, and higher insurance costs, to name a few. Furthermore, 2018 laws reduced the benefit of these tax deductions.

How to tackle future large purchases?

Acknowledge that you’re probably not being realistic about how much things will cost—then force yourself to be.

  • Having a head-in-the-sand approach is the worst thing you can do.
  • Bite the bullet, sit down, and make a realistic plan for how much your big purchases will cost you in the next ten years.

Set up an automatic savings plan.

  • Automatic savings plan is easier than budgeting.
  • Save automatically → build funds for big life events → avoid financial stress later.

You can’t have the best of everything, so use the P word.

  • Priorities matter: You can’t have the best of everything. -> Trade-offs are necessary
  • Write costs down: Helps you see trade-offs clearly and stay on budget.
  • Without planning, people ignore trade-offs → risk massive debt.

Giving Back: Elevating Your Goals Beyond the Day to Day

  • Move beyond day-to-day money issues: Automate finances to manage spending and saving without stress.
  • Set higher-level goals: Use money to pursue passions and long-term dreams, not just pay bills.
  • Give back to community: You don’t need to be rich to give back.
    • Volunteering or small donations make an impact
    • Time can be more valuable than money