Latest news with #RamitSethi
Yahoo
16 hours ago
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Ramit Sethi: Reach These 9 Major Money Milestones Before 40
As you go through different decades in life, your money goals and priorities will likely change. For example, you might spend your 20s figuring out how to manage student loans and budget your limited income, while you might focus more on saving and paying down debt in your 30s. Read Next: Learn More: According to money expert Ramit Sethi, you should reach some key milestones by age 40 that will make a big difference in your financial security and wealth. In a recent YouTube video, he discussed nine goals that won't require obsessing over every purchase or giving up what you love. Also see two reasons saving less is the secret to building wealth, according to Ramit Sethi. 'If you're carrying debt above 6% interest, you are burning cash every single day,' Sethi said. Federal Reserve data showed that credit cards (21.37%), personal loans (11.66%) and auto loans (8.04%) had average interest rates above that threshold in February 2025, the most recent data available. Besides the money lost to interest, your monthly payments steal from your investment opportunities. Sethi recommended looking at your debts and interest rates and creating an aggressive debt payoff plan. Pick the debt avalanche plan to save the most on high-interest debt or the debt snowball plan to wipe out the smallest debts first. Check Out: Whether you unexpectedly lose your job or face an expense that blows your budget, an emergency fund will cover you and help you prevent needing to take out debt. Sethi suggested saving six month's to one year's worth of your main expenses, offering more security and flexibility than the usual savings guideline of three to six month's worth. Lowering expenses and finding extra income opportunities will help you build up your reserves faster. Sethi said you should invest consistently by age 40 to get rich and recommended an automated and 'boring' approach. He recommended investing 10% or more of your income, maxing out tax-advantaged retirement accounts like your 401(k) and Roth IRA, and using automatic transfers. He also encouraged annual contribution increases of 1% to accelerate building wealth. Sethi discussed how it's more common to get wealthy by investing what you earn at a job than to win the lottery or a big settlement. So boosting your skills, value and earnings potential is smart. Besides making yourself more valuable at your current job, you can consider new career options that pay more and seem fulfilling or interesting. Sethi suggested interviewing five experienced professionals to learn about their career paths and see what might appeal to you. According to Sethi, you must determine how much money you aim to have and the reason. Maybe you want to become a millionaire to enjoy an early retirement, live a certain lifestyle or give freely to others. 'This is important to know what your rich life is because if you don't know what that money is for, then you are simply wasting your life chasing a number,' Sethi said. Combining finances with your partner is a suggestion that many other financial experts, including Rachel Cruze, also support. Otherwise, you risk getting into more arguments and potentially making financial decisions that one of you won't agree with. Sethi advised a joint approach where you keep each other current on everything from your income and expenses to investments and debts. He encouraged talking about money together monthly, tracking important numbers in an app or spreadsheet, and monitoring progress toward money goals. Plus, you want to avoid leaving money decisions to one person. 'This one is underrated, and honestly, it's one of the most powerful moves you can make towards building your rich life,' Sethi said. Making this list involves thinking about what you don't care about so you can direct your money to the right things. Sethi recommended listing three things that are a 'no' and three things that you want to buy without regret. Moving forward, focus on reducing expenses that are related to your list of 'no' items. You can update your list as your preferences evolve. While Equifax recommended having just two or three credit cards, some people have many cards they might use to gain different perks or earn targeted rewards. Sethi explained that this complexity makes everything harder to track, and some of your cards may have predatory interest rates. He suggested sticking to one or two cards that offer good rewards, canceling bad cards and watching your interest rates, which become less important when you're not carrying a balance. Besides simplifying your finances, this move could help you avoid running up as much debt. 'The goal is not to create a plan that's in concrete, locked in forever,' Sethi said. 'It's to create a direction, something to aim towards and to update it as you grow.' While you might have a certain financial vision when you're younger, you should reconsider it as you grow older. Sethi recommended an annual review where you think about what you want now, what you no longer care about and what lies next in your plans. More From GOBankingRates These Cars May Seem Expensive, but They Rarely Need Repairs This article originally appeared on Ramit Sethi: Reach These 9 Major Money Milestones Before 40
Yahoo
21 hours ago
- Business
- Yahoo
Ramit Sethi Tells Parents What They Should Never Say To Their Kids About Money: 'Your Kids Will Absorb It'
Children mirror their parents. The way parents act and speak will influence what their children become, and this truth branches out into all areas of your children's lives. With that in mind, financial guru Ramit Sethi revealed what parents should have said to their kids about money. Making this mistake can cause your children to endure financial hardships and have a more difficult time growing their careers. "Your kids will absorb it," Sethi said. Sethi shares what you shouldn't do and offers some suggestions of what you can do to make your kids confident with their finances. Don't Miss: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — Peter Thiel turned $1,700 into $5 billion—now accredited investors are eyeing this software company with similar breakout potential. Learn how you can Sethi says that you should never use this phrase in front of your children. Saying it once is bad enough, but if you repeat it, your child may develop negative thoughts about money. For instance, your child may view money as a scarce resource and feel like it's difficult to get ahead in their career. If your child has a successful career, they may avoid spending money in general, even when spending it would be a good thing. Children will look at your actions and words as guidance, whether it's for the best or for the worst. Make sure you are very careful about how you speak about money and working hard to achieve goals. Trending: Maximize saving for your retirement and cut down on taxes: . One of the concerns Sethi brings up is that kids who hear that their parents can't afford anything may be reluctant to spend money, even when they have more than enough. While saving money is a good habit, Sethi is against having millions of dollars in the bank and never tapping into it. He believes that people should aim to live rich lifestyles. That doesn't mean you go out and buy luxury cars and designer bags that you can't afford. It simply means being smart with your money but giving yourself some flexibility to make discretionary purchases that make you happy. For instance, he's against impulsive spending and buying things that don't make you happy. However, if you have wanted to go to Hawaii for more than a decade, he's the type of financial guru who would encourage you to make that trip once you have saved enough money. He's an advocate for frugal spending, which means being tight with how you spend money but being flexible with spending money on things and experiences that meaningfully boost your long-term happiness. However, he's against being cheap, which is the equivalent of a millionaire fasting for the sole purpose of reducing their grocery that your kids will absorb what you say gives you a great advantage. While some families talk about the things they can't afford, you can flip the script. Instead of saying that you can't afford something, you can teach your children valuable lessons about prioritizing how they spend money and building toward long-term financial goals. Serving as this type of mentor for your child can help them become more successful than you when they get older. You can encourage them to build good financial habits and explain what you are doing to move closer to your long-term goals. It's okay to talk about money with your children. Doing so can help them in the long run. However, parents talk with their children about money whether they know it or not. Your child will notice things like what quality of life you accept, how you feel about asking for a raise or leaving your current job for a better opportunity, and if you invest money. Being more intentional about how your children think about money can inspire you to work toward long-term goals, boost your income with side hustles, and attain a higher standard of living. Read Next: Image: Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article Ramit Sethi Tells Parents What They Should Never Say To Their Kids About Money: 'Your Kids Will Absorb It' originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved.
Yahoo
3 days ago
- Business
- Yahoo
Ramit Sethi Debunks 3 Salary Myths Holding You Back From Building Wealth
Ramit Sethi, the best-selling author of 'I Will Teach You to Be Rich,' recently shared three salary myths in his newsletter, explaining that many people believe if they work hard, their company will reward them with promotions and raises. However, he explained that it doesn't always happen. Check Out: Read More: Unfortunately, many people are not receiving the salaries they deserve. Even worse, sometimes individuals with far less experience earn the same amount of money as those who have been working for over a decade. In the newsletter, Sethi detailed three salary myths, explaining why they hold people back while giving suggestions on how to overcome them. Sethi said in his newsletter that he surveyed 2,200 people about their salaries, and the results showed 91% of respondents received a raise in the last two years. However, many people are concerned about economic uncertainty and the potential for layoffs. Resume Templates recently surveyed 1,000 managers in the U.S., asking about the potential for layoffs in 2025. Responses showed 45% of surveyed companies are likely to lay off workers this year. However, Bureau of Labor Statistics data signaled that wages and salaries have increased this year. In other words, some economic sectors will experience layoffs, but others are growing, and wages are increasing overall. Sethi said if you haven't gotten a raise recently, it's important to understand why. It could be your company, your job sector or your performance. I'm a Self-Made Millionaire: Sethi explained that the notion that people have to hustle to earn a good salary is outdated. In fact, based on his survey data, many people earn excellent salaries working 40 hours a week or less. Sethi speaks often about what he calls the 'rich life.' Everyone's version of the rich life is different, but Sethi says people don't have to work constantly to have one. He encourages his listeners to discover what makes their life rich, whether that's time freedom, the ability to travel, or something else. Sethi noted this is a common myth passed down by people's parents. People believe that if they demonstrate loyalty to their company and work hard, their pay will increase. Unfortunately, this isn't guaranteed. If you're among the group of workers experiencing pay stagnation, something needs to change, according to Sethi. He explained that, fortunately, people have the power to improve their salaries through networking, mastering job hopping and improving how they market their valuable skills. Sethi teaches this through several career-based educational programs available on his website. More From GOBankingRates Mark Cuban Warns of 'Red Rural Recession' -- 4 States That Could Get Hit Hard These Cars May Seem Expensive, but They Rarely Need Repairs 5 Types of Cars Retirees Should Stay Away From Buying This article originally appeared on Ramit Sethi Debunks 3 Salary Myths Holding You Back From Building Wealth
Yahoo
6 days ago
- Business
- Yahoo
2 Reasons Saving Less Is the Secret To Building Wealth, According to Ramit Sethi
While focusing on saving can seem safer than potentially losing money in mutual funds, stocks and bonds, finance expert Ramit Sethi believes that this approach could leave you broke. Learn More: Consider This: A 2024 report by Janus Henderson Investors found that 48% of Americans had no investments. While some people cited a lack of investment expertise, the need to pay off debt or limited financial means as the reason, 38% simply preferred putting cash in regular bank accounts. In a recent YouTube video, Sethi explained why you should save less and instead invest your money smartly. While you might think you're making progress by saving money, you'll eventually find yourself off track from your retirement goal, even if you contribute a large sum each month. First, a typical savings account usually earns a much lower rate than the average investment return, so your money grows much more slowly. Then, there are hidden factors you might forget, like taxes and inflation, that lead to being unable to buy as much with your savings. Sethi gave an example of someone who spent 30 years stashing away $1,000 each month. Federal Deposit Insurance Corporation data showed the national average savings account rate was 0.42% in May 2025, while Sethi said the historical average annual investment return (after inflation) was 7%. According to Sethi, the person who saved would have around $383,000 after 30 years, compared to nearly $1.2 million for the investor. So, the saver would have missed out on about $817,000. Sethi added, 'This is the difference between struggling to retire at 65 versus becoming a millionaire before 50.' Explore More: The annual inflation rate reported in April 2025 was 2.3%, which was 1.88% more than the 0.42% average savings account rate. So, while your savings balance looks like it's growing each year, inflation is likely robbing you of some of your money's value. For example, if you had $1,000 in your savings account, you might earn $4.20 over the year, but lose $23.00 to inflation. So, your money's purchasing power would have gone down by $18.80, meaning you're not really getting ahead. Sethi explained that many people mistakenly believe that saving is the safe and virtuous route, but as the example showed, it actually makes it harder to grow money efficiently. He said, 'In order to build wealth, you have to go way beyond saving, and you have to invest.' While still saving cash for emergencies and upcoming purchases is smart, prioritizing investing is a better approach for preparing for retirement and building wealth. Sethi discussed how you can invest without making it complicated, and suggested ways to come up with more cash to contribute. First, he recommended a three-step strategy of taking advantage of 401(k) matches, contributing to a Roth IRA and buying target-date funds. This combination gives you free money from your employer, tax advantages and simplicity. To ensure you stay on track, Sethi suggested automatically transferring 5% of your pay to both your 401(k) and Roth IRA accounts. Then, you should set up automatic target-date fund purchases so you don't forget them. Finally, Sethi said you should take three steps to get more money rather than focus on cutting expenses, which will eventually come to a limit. These include asking for a higher salary, taking on a suitable side gig and focusing on gaining and improving valuable skills. Sethi explained, 'If you focus on earning more, you will give yourself a massive advantage in building your rich life.' More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 Clever Ways To Save Money That Actually Work in 2025 7 Things You'll Be Happy You Downsized in Retirement This article originally appeared on 2 Reasons Saving Less Is the Secret To Building Wealth, According to Ramit Sethi Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
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Ramit Sethi: If You're Middle Class, Avoid This Financial Move ‘at All Costs'
On May 12, the CEO and co-founder of Basic Capital posted a promotional video for the company on X. The video pitched how this company helps the average individual access funding for investment, helping them close the wealth gap. Not everyone was impressed with the idea. Find Out: Read Next: In response, Ramit Sethi, a New York Times bestselling author and personal finance influencer, tweeted that this kind of financial scheme is predatory and comes with staggering fees that will keep you from getting ahead. Sethi cautioned that while, historically, these schemes have targeted the very rich or very poor, many now have the middle class in their sights. Here are some common financial traps to avoid. One of the newest payment methods available is Buy Now, Pay Later (BNPL). Through this short-term lending, consumers can use a company like Klarna or Affirm to buy something for a small portion of the cost and pay the remaining amount in several equal installments over time. Making purchases more manageable through a payment plan isn't a new concept. In the past, customers could buy an item on layaway, where a retailer would hold an item until the customer paid it off in full. However, with BNPL, the buyer can take their product home immediately. The predatory practice occurs when a BNPL user is late with a payment. If customers pay all of their installments on time, they won't need to pay interest, but there are immediate consequences if they miss a payment. Interest rates vary by the provider but are often significant. For example, Affirm and Klarna both charge up to about 36% interest for missed payments, which can quickly escalate to serious debt. To compound the problem for borrowers, BNPL loans also encourage overspending. If you see something you want while shopping, it's much easier to stomach the cost when you can split it into four payments over the next few months. As these purchases add up, paying off the debts becomes harder. According to the U.S. Consumer Financial Protection Bureau, 63% of borrowers take out multiple loans at the same time. Learn More: If you can't afford to buy and maintain a second home to visit in the winter, a timeshare allows you to enjoy your own vacation space for a short period. These investments let multiple parties purchase a vacation property together and agree upon times when each owner can visit. While timeshares can be good investments, the industry has developed a negative reputation in recent times. Sales representatives often resort to high-pressure and misleading sales tactics to get prospects to sign a timeshare contract, such as overstating resale value, pushing limited-time offers and emotional manipulation. After signing, the purchaser may discover expensive hidden fees and maintenance costs. If they try to back out of the deal, they'll find that the contract is full of language making it extremely difficult to cancel it. This has led many timeshare owners to try to sell their contracts at a loss, but the number of people attempting this makes it extremely difficult. Earning a degree or getting a new certification is a well-known way to land a higher-paying job. Unfortunately, for-profit colleges often try to exploit this. These outfits differ from traditional colleges because they exist to earn revenue for shareholders and owners. That means making money can become more important than the education of enrolled students. For-profit colleges offer some positives, like flexible or online schedules, fast-tracked programs and lower admission standards. However, according to the National Center for Education Statistics, a higher percentage of those who graduate from for-profit universities have consistently defaulted on their student loans three years after graduating compared to those from nonprofit and public colleges. The tuition at these for-profit schools is often much higher than that of traditional universities, leaving students with large amounts of debt. On top of this, many have criticized these colleges for poor-quality courses that don't lead to higher-paying careers. This combination of paying a high price without much to show for it makes many consider some for-profit colleges predatory. One of the biggest debt traps for the middle class remains hidden in plain sight. In 2024, the average credit card APR was above 22%, and the average credit card balance per consumer was $6,730. While it may seem like credit card debt would be more of an issue for the lower class, the middle class has the most. The Federal Reserve Bank of St. Louis divided U.S. households into 10 equal groups based on income, with the lowest 10% of earners in the first group and the highest 10% of earners in the tenth. Out of the 10, the fifth, sixth and seventh groups, representing the upper-middle class, had the most credit card debt. While there is no clear reason why these middle class households have more debt, there's speculation that low-income households can't qualify for high credit limits, and high-income households may have more money saved. More From GOBankingRates 5 Types of Cars Retirees Should Stay Away From Buying This article originally appeared on Ramit Sethi: If You're Middle Class, Avoid This Financial Move 'at All Costs' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
