Win the War on Debt: 80 Ways to Be Frugal and Save Money. Ramit Sethi on Increasing Your Earning Power. Ramit Sethi runs the Web site I Will Teach You to Be Rich.
Think of the last 10 pieces of personal finance advice you’ve read. Do any of these sound familiar? Cut back on lattes! The world’s top 10 couponsDon’t go on vacation this year! If you boil all the advice down, there are just two ways to improve your financial situation: earn more or cut costs. And so we get lectures on frugality, giving us obscure advice like how to save on paper towels. It’s no wonder that most Americans simply ignore their finances. I believe personal finance should be about saying “Yes.” Yes, you can afford that extravagant coat, or iPhone or even a trip to the Bahamas. Once you’ve cut on the basics, the single best way to live a rich life is to earn more money. The Myth of Frugality Let’s take a look at a typical person who tries to cut back to save money. Jack has to cut back on a lot of things in order to save significant amounts of money.
Not bad. $400 saved. Jill can focus on one thing to get the same result: Elementary Worldly Wisdom. A Lesson on Elementary, Worldly Wisdom As It Relates To Investment Management & Business Charles Munger, USC Business School, 1994 I'm going to play a minor trick on you today because the subject of my talk is the art of stock picking as a subdivision of the art of worldly wisdom.
That enables me to start talking about worldly wisdom—a much broader topic that interests me because I think all too little of it is delivered by modern educational systems, at least in an effective way. And therefore, the talk is sort of along the lines that some behaviorist psychologists call Grandma's rule after the wisdom of Grandma when she said that you have to eat the carrots before you get the dessert. The carrot part of this talk is about the general subject of worldly wisdom which is a pretty good way to start. After all, the theory of modern education is that you need a general education before you specialize. What is elementary, worldly wisdom? You've got to have models in your head. Get Out of Debt with the Debt Snowball Plan - Debt - Debt. Myth: I should pay off the debt with the highest interest rate first to get out of debt quickly.Truth: You should pay off the smallest debt first to create the greatest momentum in your debt snowball.
The math seems to lean more toward paying the highest interest debts first, but what I have learned is that personal finance is 20% head knowledge and 80% behavior.You need some quick wins in order to stay pumped enough to get out of debt completely. When you start knocking off the easier debts, you will start to see results and you will start to win in debt reduction.
Debt Snowball Plan The principle is to stop everything except minimum payments and focus on one thing at a time. Otherwise, nothing gets accomplished because all your effort is diluted. Build Momentum Redo this each time you pay off a debt, so you can see how close you are getting to freedom. Debt Free! You attack the smallest debt first, still maintaining minimum payments on everything else. I have been broke.