9 Money Rules by Ramit Sethi to Help You Get Rich

Ramit Sethi is one of the most successful, and well-known personal finance experts on the planet.

With his book, I Will Teach You to Be Rich, and his Netflix show, How to Get Rich, he has helped millions of people just like you build generational wealth and achieve financial freedom.

His success and impact on others speaks for itself, so with that being said, here are Ramit Sethi's 9 rules of money, that you need to follow for financial success.

Build An Emergency Fund

22 million jobs were lost during the COVID-19 pandemic in 2020. Careers ended in the blink of an eye, and many people found themselves unprepared for such an event.

While grim, this serves as a valuable lesson: when times are good, work hard and fast to put away 1 year's worth of expenses in case of a sudden loss of income.

This one rule alone will alleviate much of the worry you feel when thinking about money.

If this seems extreme to you, you can adjust it. But regardless, make sure you're saving at least something to go towards your future.

The more the better, in all honesty.

Save 10% and Invest 20% of Your Annual Income

When you're beginning to save, your emergency fund is the place to start, as mentioned in rule 1.

Once that's built up, you can move on to a high yield savings account.

For Sethi, this is a personal commitment to his future. He suggests you have a portion of every paycheck automatically directed to this account, just like any other expense.

Not ready to invest that amount of money? That's okay. Maybe your money rule can be to invest 5% and save 10% of gross annual income, or invest nothing at all right now.

The general rule of thumb though, is to get into a habit of putting money towards your future. That’s what you must take away from this.

Pay Cash for Large Expenses

In other words, ditch the plastic to build good financial health.

It's important to not to carry large amounts of debt, especially where interest builds up. Maybe people fall into the credit card trap thinking they can just pay it off later, but then something comes up which stops them…

• A trip to the emergency room.

• A burst pipe.

• A broken down car.

…and that plan goes out the window.

One of Sethi’s keys to saving money, is spending what you have, only when you have it.

Use rules 1 & 2 to become your own mini bank, if or when you need it.

Never Question Spending Money on Things You Enjoy

Sethi loves reading books, and he’s always anxious to learn something new. Ramit's book buying rule, which allows him to buy any book he finds interesting, allows him to do just that.

You might have something that’s so important to you, that you aren't depriving yourself of something you love.

Financial self improvement can often involve sacrifice, but it’s important to enjoy yourself, and reward any sensible habits you’ve developed with spending generously on what you love.

Perhaps choose a few things that make you happy, and then form your rule around those.

Love gardening? Painting? Video games? It’s tailor made to you.

There are certain things that shouldn’t be sacrificed, if they make you happy.

Buy The Best and Keep Things For as Long as Possible

Sometimes, buying cheap ends up being expensive, and spending more for quality saves money in the end.

For example, Sethi enjoys buying high-end electronics because they last longer; clothes because they don't tear or rip as easily; and cameras for their reliability.

Some of these items can even be passed on to younger generations. This might not be a bad rule to adopt as your own.

Going cheap doesn't always pay off in the long term. Remember that, the next time you try cutting some corners.

No Limit on Spending on Health or Education

Health and education truly are rewards that keep on giving, and ultimately, the best return on an investment you'll ever get is an investment into yourself.

If you invest in an online course that helps you learn a new skill, you now have a new skill you can use to monetise, and provide value to others.

Those few extra sessions with your trainer at the gym will make you feel good about yourself, energising you, motivating you, and perhaps even inspiring you to think more creatively on a project or with a particular client.

The no limit part of this rule might scare you, so perhaps a cap of $100 per month on fitness classes, and $1,000 a year on education.

You can decide the numbers. It’s your money, so it’s your choice.

Earn Enough to Work Only With People You Like

I refuse to wake up in the morning, not looking forward to my day and future interactions.

For me, kindness, respect, and trust, are of the utmost importance when it comes to people I hire and work with.

If you find yourself miserable because you dread going to work each day, because your boss is unkind, you might implement a rule like this.

If you feel stuck, use your income to build a safety net so you can quit and try something new.

See rules 1 & 2 if you can’t act on this right away.

Prioritise Time Outside The Spreadsheet

Money rules are more than just figuring out how to put money in the bank.

They’re also about creating the life you want to live. That’s why I write about the importance of money.

Your money rules should want to ensure just that, once everything is running smoothly.

According to your plan, you're prioritising family, loved ones, and your health, not the number in your investment account. Don’t forget what really matters in all this.

Marry the Right Person

Whether you like to believe it or not, money is a big part of a relationship. People have grown up on different money values, and can see things very differently.

To avoid any conflict down the road, Sethi made a commitment to be in alignment with his wife's own money rules.

Have you noticed that the 9 rules are more about saying yes, than saying no? It's not about depriving yourself of little luxuries.

Your money rules are just as much about investing in yourself, especially when that investment can help you make even more money.

There are no limits on earning potential.

However, there is a limit on how much you can cut.

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