A big reason is that the number 6 isn't going as far as it used to, thanks to factors outside of an individual's control, such as inflation and rising interest rates. But there's something else going on, according to author Ramit Sethi. teach you how to get rich The star of the Netflix series How to Get Rich is well within our control. Our feelings about money are “not very correlated to our bank balances” because we're focused on the wrong things.
“That's counterintuitive to people. A lot of people think, 'If I had another $10,000 or if I ended up with $150,000 in my bank account, I'd feel good about money.' I believe in it,” says Sethi, who studied psychology at Stanford University. luck. “Wrong! You wouldn't do that.”
In fact, he says, many people often feel worse after reaching these arbitrary milestones because they're not happy with how their money is being spent. Rather than focusing on the numbers he's making, Sethi suggests actively working to improve his financial psychology. Ask yourself difficult questions. What do you actually want to spend your money on? Why? How can you be more intentional about how you spend your money?
He says it's shocking how many people have never thought about these questions. Instead, they often focus on checking boxes specified by those around them.
Sethi has worked in the personal finance field for over 10 years. In “How to Get Rich,” released on Netflix earlier this year, he helps people across the country learn about their finances and themselves to live their best, richest lives. For Sethi, a “rich life” is not necessarily a life that makes the most money or a life that is most luxurious. It's about prioritizing what's most important to each individual.
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Most personal finance advice in the U.S. is guilt-based and restrictive, Sethi said.it's all up to you shouldn't do. Call this the Starbucks Latte approach. You can save up for a down payment if you just make your own coffee at home, or even better, forgo small luxuries altogether. Sethi takes the opposite action, which he calls the money dial approach. I try to turn the dial way up on the things I like and turn it way down on the things I don't.
“Americans love to feel bad, to feel guilty, to feel anxious,” he says. “Money should be fun and we should have a healthy relationship with money.”
This requires a major shift in perspective from how we normally view finances. If you ask most people what their ideal rich life would look like, 90% would say, “I want to do what I want, when I want.'' But what does that actually look like? “When you ask them to explain it, they flinch,” he says. Or maybe someone wants to go on a trip, but doesn't necessarily need to take a private jet. They want to eat out more, but it doesn't have to be at expensive restaurants.
“We tend to minimize what we want,” Sethi says. “But I'm not asking you what you don't need. I'm asking you what you want. What do you like to spend your money on?”
One of Sethi's most controversial opinions is that buying a home is not right for everyone. Homeownership is not part of everyone's prosperous life. On the surface, this is an undeniably true statement. Owning a home helps many people build wealth, but for some it can also have a disastrous impact on their financial well-being.
But this dream is so ingrained in American culture that Sethi is often labeled a “secret landlord” (by those who remain renters) because he tells people to crunch the numbers before they buy. implying that they are making a profit). But this is just one of the ways he encourages people to be more thoughtful and intentional about what they want out of their lives. If you have a six-figure income but can barely pay your mortgage every month, you're certainly not happy.
“Americans are very good at making decisions that they think will make them happy but make them very unhappy,” he says. For example, moving to the suburbs “taking on untold amounts of debt in order to own a home.” “Did you know you don't have to do that? You can choose what your rich life looks like.”
