Ramit Sethi teaches viewers the importance of maxing out their investments, funneling money into the areas they care most about (perhaps convenience, travel, luxury shopping, or—yes—new cars), and bloodlessly cutting their spending on any areas they don’t care about, all in service of building their own “rich life.”
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TechTranscript
00:00 I don't want to age you, but you became a self-made millionaire at a relatively early age,
00:05 and your path to where you are now is quite fascinating, certainly unique.
00:09 Walk us through that trajectory. How did you make that first million dollars?
00:13 It's funny you mention making a million dollars, because that's not even one of the most pivotal moments for me.
00:26 I never woke up and said, "I want to have a million dollars."
00:30 My parents immigrated here from India. They taught me a lot about family, about money, mostly about education and working hard.
00:37 After I graduated, where I studied human psychology and human behavior,
00:42 I was working on a tech company, and on the side I was writing about money.
00:48 And it became very interesting. Started a blog, that started to take off.
00:52 Wrote a book after many years of the blog and testing things, and eventually started a business around this,
01:00 where I help people live a rich life. And if we fast forward, here I am today.
01:04 When you were in college, how much were you investing?
01:06 A lot. I was investing since I was 14. So, 14, my dad helped me open up a custodial Roth IRA.
01:12 I thought investing meant picking stocks, so I picked three stocks.
01:17 One, JDSU was a telecom company, now bankrupt. Excite@Home, search engine, now bankrupt.
01:24 And a little company called Amazon.com. I still have that stock, it's done really well.
01:29 Let me please be clear about this lesson. The lesson is not, "Oh, just pick the next Amazon."
01:34 I got lucky, and now my portfolio consists almost exclusively of broad-based index funds.
01:40 And the return on investment?
01:42 Really good.
01:43 Okay.
01:43 But that's pure luck. Please, I'm not Mr. Amazon.
01:46 With an exception rather than the rule.
01:48 Yes. And please do not take the lesson away that everybody should invest in the next Amazon,
01:52 because I just got lucky.