One afternoon I was scrolling through Netflix, and I came across a show called “My Rich Life” with Ramit Sethi. I had never heard of or seen this guy but just from the trailer, I could tell it wasn’t like the usual “look-at-what-I-can-do-with-my-money” kind of show. This show truly focused on meeting people where they were and helping them dive into making a plan to do better financially. But more importantly, it gets into the heart of why average people spend money the way they do. This show is FULL of gems and money-mastering tools but here are my top 3 takeaways.
Owing a home isn’t for everybody
A young gymnast bought a condo and was already going through the difficulties of owning property. She was already in an intense battle with her HOA to get the basic essential of hot running water. The main reason she bought the condo was because she felt like she “had” to. This is where Rammit broke down the true cost of owning a home. He went over property tax, maintenance costs, and repairs. He didn’t say owning a home was bad, but always run the numbers and spread out the cost of owning that home for the next ten-plus years. This episode was impactful on some many levels because most Americans are told that they need to own a home to complete that “American dream”.
Money Can Break Down Any Relationship
I won’t get into the debate on traditional wives (or husbands). But in one of the episodes, there was a couple that had kids and the husband stayed home to raise the kids. The wife had no idea the hardship the husband was facing and she didn’t share with him what was happening financially but she was the main breadwinner. After Ramit made a few suggestions on reversing the roles and having the wife watch the kids and the husband get a job, the relationship improved drastically. Everyone’s situation is different, but I think the moral of the story is, that if there is a way for both spouses to make money it allows both people to both contribute and make financial decisions together.
Even Finacial Advisors Have Fine Print
In another case, a woman on the show actually had a lot of money that she was blowing through. Ramit suggested that she learn how to manage her money herself however she said she would go to a financial advisor. This sounds like an awesome idea!…Until Ramit points out that her financial advisor is ripping her off because they are charging a percentage of assets under management(AUN). In simple terms, if an advisor is charging a client 1% (let’s say 1 dollar out of 100) as their money grows that 1 dollar grows and compounds as well. Financial advisors provide a service and should be compensated for that service but if you can learn to manage and grow your own money you keep 100%. Instead of paying by percentage Ramit suggested paying by the hour to get specific financial advice on difficult financial situations like a divorce, inheritance, or taxes.
Overall, I enjoyed watching Ramit take a different approach to each individual’s financial situation and I highly encourage everyone to watch a few episodes of “My Rich Life” with an open mind.