Ramit Sethi: The New Rules About Money & Wealth and What You Don’t Know About Achieving Financial Freedom – The James Altucher Show (Part I)

Check out The James Altucher Show Podcast Page

Key Takeaways

  • Stop worrying about the $3 questions (like whether or not you buy a latter)
    • Instead – focus more on the $30,000 questions
    • If you get the $30,000 questions right, you can buy all the lattes you want
  • Run the numbers before you decide to buy a house, it’s not always the best investment
  • The easiest way to change a behavior is by taking discipline out of the equation and automating it
  • Successful people frequently use the words “always” and “never” (i.e. “never” eating dessert or “always” saving 20-30% of your income)
  • Instead of being DERISIVE be CURIOUS
    • Think: “Why would this person buy a business class ticket? Maybe there’s a good reason behind it? He/She must know something I don’t and I want to understand why.”
  • Spend extravagantly on the things you love, but cut costs mercilessly on the things you don’t


Buy as Many Lattes as You Want (worry about $30,000 questions, not $3 questions)

  • The media says – “Save money. Stop buying lattes.”
    • “This is a perfect example of the a simple lie and misconception that’s spread when it comes to money” – Others include:
      • “Buying a house is the best investment” (it’s not… most of the time)
  • Instead – “Buy as many lattes as you want”
    • Spending $3/day doesn’t add up to all that much
    • Rather than worrying about whether or not you should be spending money on coffee, focus on the big wins (like getting a great job and negotiating your salary)
      • In a sense, whether or not you should buy lattes is a $3 question, think bigger! – focus on the $30,000 questions!
  • What are the $30,000 questions?
    • Who you marry and your relationship with money between the two of you
    • Your job and salary
    • Buying a house vs. an apartment
    • Whether or not you save for retirement
  • “Most people would be better off if they stopped thinking about $3 questions altogether. Spend much more time on the big ticket items.”
    • By the time you go to buy a house, for example, you should know essentially everything there is to know about the process
    • “If you get the $30,000 questions right… and there’s only 5 or 10 of them in life… you can buy all the lattes you want for the rest of your life”

Buying a House vs. Renting

  • “All the incentives in America are designed to get you, the average person, to spend money on a house”
    • The NAR (National Association of Realtors) loves to lie
    • The government likes to tell people buying a house (compared to renting) “adds to a stable community”
    • We have all these home improvement stores
    • And then we have the $15 trillion mortgage industry
    • “The American dream includes 2.5 kids and a HUGE purchase. Where did that come from??”
    • We’re SO OFTEN told – “You’re throwing away money on rent, buy a house for the equity”
  • Ramit’s advice:
    • Actually run the numbers 
    • Actively seek out the downsides of buying a house – there are many things you’re likely not considering

The Similarities Between Food and Money

  • Ex. – We don’t count our calories, we don’t count our spending
  • Ramit talks more about this in his book, but was advised not to do so (but he refunded)
    • Why? – Food and losing weight/dieting has become so controversial (>75% of Americans are overweight!)
  • In terms of losing weight, the arguments have gone from:
    • “Losing weight is hard” —>
    • “Losing weight is impossible —>
    • “I can’t lose weight due to genetics” —>
    • “It’s bad and unhealthy to lose weight”
  • In summary:
    • “We can control out money, we can control the way we look and feel… there are very similar principles involved with each”
  • At the end of the day, you can really only understand what you measure
    • That’s the only way you know whether to accelerate what’s working/decelerate what’s not working

Discipline and the Future Self

  • Our future selves are perfectly disciplined, work out consistently, and save all our money
    • But in reality – humans love comfort, watching Netflix, and putting things off until the next day
      • Inherently, we’re all lazy – the easiest way to change a behavior is by taking discipline out of the equation and automating it 
  • Examples: 
    • Never go to a bar if you want to cut alcohol
    • Get rid of all the unhealthy snacks in your house if you’re trying to lose weight
    • If you’re having trouble making it to the gym, put a kettlebell in your garage
  • Successful people frequently use the words “always” and “never”
    • “Never” eating dessert
    • “Always” saving 20-30% of your income

Ramit’s Rules

  • Fly business class if the flight is > 4 hours
  • Never question spending money on books or online education
  • Check out Ramit’s 10 Money Rules

On Banks

  • Stop using Bank of America
    • “Grow up and get a better bank. They’re going to screw you whether it’s today or tomorrow.”
  • Same with Wells Fargo – “They’re also terrible”

Know This

  • “Most people are generally the same. People love to believe they’re unique and different.”
  • “People think they’re a lot more advanced than they really are”
  • Many people think their excuses are unique 
    • Many times “I don’t have time” and “I can’t afford it” are true, but often they’re just stories we tell ourselves

Know Your Money Lens

  • On eating out:
    • Some people believe the point of eating out is to get full
    • Others value a lavish dining experience
    • Others want novelty
  • There are different lenses to view the world of travel through:
    • Most view travel through a frugality money lens and therefore travel cheaply
    • Others value comfort/convenience and will happily spend on business class

The D to C Principle

  • “My first mistake in my early 20s was being judgmental about how other people spent their money”
    • “Instead being disparaging about people sitting at the front of the plane, I should have gotten curious”
  • This spawned into the D to C principle
    • Instead of being DERISIVE be CURIOUS
      • Think: “Why would this person buy a business class ticket? Maybe there’s a good reason behind it? He/She must know something I don’t and I want to understand why.”

The Money Dial

  • Your money dial is the thing you LOVE spending money on
    • So go all out, spend money in this area but save HARD elsewhere
      • Spend extravagantly on the things you love, but cut back mercilessly on the things you don’t
  • For James:
    • He’s spent tons of money in the past on apartments aimed at shortening his commute to work
    • “I hate travel so much, I will spend just about any amount necessary to make it as easy as possible”
      • He’ll actually fly private if he’s taking his whole family with him
  • Ramit’s money dial – convenience
    • As an example – being able to take a taxi rather than the subway when it’s hot out
  • Other common money dials – fitness classes, organic food, dinner parties
  • A fun question to think about – “What if I could triple the amount of money I spend on my money dial?”

Additional Notes

  • Start an email list ASAP
    • ~8 years back, Ramit advised James to do the same
      • Around 2015, James started to monetize his list 
      • Now – he’s making serious $$
  • Stop looking for the advanced supplements
    • Get the basics of health rights first
  • Check out Kevin O’Leary’s book on  money and relationships – Cold Hard Truth on Family, Kids and Money
    • Ramit says he’s a member of the “don’t buy lattes” crowd
  • James has found that eating out, rather than grocery shopping/cooking food, makes it much easier for him to lose weight
    • How? – Always eating out prevents him from buying processed carbs/sugars at the store
  • Everyone has a different idea of a rich life
    • Some people would love to drop everything and ride an RV around the country
    • Others want to retire in Mexico and spend lavishly
    • But here’s the thing – “Most people have never thought more than 2 minute about their rich life”
  • “I’d rather be dead than go to Coachella now”
  • Ramit says of the people who are in debt that email him, 95% don’t actually know their total debt amount
    • Further – 99.9% don’t know their debt payoff date
    • Don’t be one of these people – know the total amount you’re in debt and have a plan to pay it off by a certain date
James Altucher Show : , , , , ,
Notes By MMiller

More Notes on these topics

Top Insights and Tactics From

31 Best Podcasts of All Time

FREE when you join over 35,000 subscribers to the
Podcast Notes newsletter

No Thanks