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You’ve been told “renting is throwing money away,” “skip lattes,” and “you need a financial advisor.” In this video, we dismantle seven costly money myths and replace them with simple, high-leverage moves you can start today. Leave with a clear, practical framework to grow wealth without guilt, spreadsheets, or guesswork.
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Ramit Sethi is the host of Netflix’s “How To Get Rich” and New York Times bestselling author of “I Will Teach You To Be Rich” and “Money For Couples”
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⏩ CHAPTERS
00:00 Introduction
00:42 Money Lie #1: “You’re throwing away your money on rent”
03:44 Money Lie #2: “You need to track every penny”
08:58 Money Lie #3: “Stop spending money on coffee”
12:09 Money Lie #4: “Avoid credit cards”
16:17 Money Lie #5: “Investing means predicting the next big thing”
19:58 Money Lie #6: “You need a financial advisor to manage your money”
23:09 Money Lie #7: “To earn more, follow your passion”
26 Comments
Tired of bad advice? Join Money Coaching to build your step-by-step system (investing, saving, paying off debt, and guilt-free spending) in 48 hours, with direct guidance from me. Start your Rich Life today → https://iwt.com/moneycoaching-c
Fun fact: where i live it is still cheaper to own than to rent. These folks want $1500 for a 2 bedroom apartment and I can get a 3 bedroom mortgage for that.
Ramit's list of wrong money advice (He talks about what to do instead):
1. You're throwing your money away on rent
2. You need to track every penny
3. Stop spending money on coffee
4. Avoid credit cards
5. Investing means you need to pick the next hot stock
6. You need a financial advisor to manage your money
Takes less than 5 seconds of my day to put a purchase in my app to track spending. I do it at the register while they run my card. It's effortlessly. No reason not to do this.
"Coffee only saves you 72000 over your lifetime." – uh, yeah, that's a year earlier you can retire. A year of freedom vs coffee. Also, buying a house was the best financial decision I've ever made. My mortgage and bills were not much more than I'd pay for rest for the same house. 13 years later and now my house costs me 900 a month and if I was to rent the same house, I'd be spending over 3000 a month.
What if you also missed out on the 10 worst days?
What's so great about home equity? What's the long term appreciation, like 1-3%? So I have to buy a lucrative product of the banking industry (a mortgage), pay MORE interest over time than principle all for the privelege of having an investment that MAYBE keeps up with inflation? Is this the equity you all love so much? I'd rather text my landlord to come fix things and keep paying rent.
The most fervent defenders of buying are people who had lucky timing and had huge equity gains from 2010-2024 appreciation and even then you still need to run the numbers to see if they were really better off buying being the opportunity cost of that equity was one of the biggest bull runs in the US equity indexes.
A rich kid friend of mine asked back in the day why my mom needed to get a mortgage and why can't she just buy the house outright. So another solution here to avoid the bank interest😅 oh by the way that family had 3 houses that I know of.
#1. I feel this one is true but you oversimplify it in this particular video. Basically you need to run the numbers. Then after running the numbers you need to consider if there are other reasons you want to buy a house even if the numbers aren't in your favor. The stability and community that comes with homeownership isn't really quantified when you run the numbers and if you have children that may be what is most important to you.
#2. 100% agree with this one. Calculating where you spend your money 1-2 times a year can be beneficial so you can see if you are wasting money anywhere. It may even be beneficial to do it more often if you are in major debt and are spending more than you make. If you are spending less than you make though you really shouldn't need to do a budget and definitely not so granular that you are looking at the receipts to calculate individual items. If you can spend less than you make though the CSP or the 50/30/20 rule is a much better option.
#3 100% agree here too. If you can cut costs on housing and transportation you basically don't need to worry about the rest of your costs. Yes a $5 coffee a day will add up to $150 a month assuming you actually do get a coffee every day which i doubt but getting a cheaper car can save you $500 a month instead. Why are we harping on the pin pricks in our budgets and completely ignoring the gunshot wounds?
#4 Also agree here. It frustrates me when I hear people say that everyone should avoid them entirely. It is like avoiding cars because car accidents are a thing. You hear ramsey personalities talk about them like they are the devil and that you don't need things like a credit score and while true it is also more expensive to do when you still need to take on debt for other things. Yes once you have a 7 figure net worth and a stable income credit scores matter a lot less but if you can't pay cash for everything yet then it is still important to keep in mind. Also regardless of if you need it or not it is useful to still track your credit reports as they can advise you if your identity has been stolen.
#5 I mostly agree here though I do have caveats. If you don't know what you are doing you should invest in index funds. If you think you know what you are doing you should invest in index funds. There is a very narrow window there where it is relatively safe to operate in where you should realize there are things you don't know but you have learned enough about how businesses operate to be able to make a profit. First thing is that you should never invest off the numbers and by this I mean day trading. If you are trading based off whatever algorithm or trend forcast is saying you should just give up. There are companies out there that spend a lot of money to be faster at trading on those numbers than you could possibly be so just don't bother. If you are going to invest in single companies you should understand first that it is a speculation and carries a lot of risk and you should also take the time to learn about that business. How does it operate? How does it make money? What are the potential risks and strengths of that company? In a way it is similar to going into business for yourself. It isn't passive and you need to be focused on how that company is going to make money in the future for your investment to have a chance. Another thing is the timeframes. If you are investing in a company because you think the stock will do well this week or this month you are wrong. There isn't a company in the world where you could accurately guess the trajectory off a timeframe that short. If you aren't sure if the investment will be good at least 1 year from now then it isn't worth your investment. Put that money into an index fund instead. This approach has worked for me. I am 37 with about 3M in investable assets. I have saved quite a bit in my traditional 401k. It is at about 500k Not bad for my age. The thing is that I have about 2M in my Roth IRA even though I have contributed a lot less to that one. I have used my Roth IRA for my speculative investments due to the tax benefits for doing so and it has been able to grow thanks to the investments I have made with it. If I don't have a particular investment I am interested in those funds have simply been in index funds but I have done a lot of research in particular fields and have been able to determine relatively well when there are stocks that have a decent opportunity for growth. 3 of the 4 I have picked have done very well with the 4th just having flat growth. It didn't tank it just didn't grow as I thought it would be able to.
#6 100% agree here. 1% doesn't sound like much because on $10,000 it is only $100. Once you get up to where I am though a 1% annual fee could buy me a car every year. I am fine paying for people's hard work but even if they spent 40 hours a year solely on my portfolio I would be paying them $750 an hour. Way too much. I also think it is important to learn about how to manage your own money. You don't have to be an expert in accounting but you should definitely be able to handle the majority of the work. That way when you do talk with an accountant or financial advisor you can know whether the things they are telling you actually make financial sense. There are a lot of financial products out there like insurance that are way over used because they make advisors a bunch of money selling them. Everything is going to pass a sniff test if you don't know what crap smells like. Take the time to educate yourself.
#7 100% agree. Having to worry about money is a great way to kill the passion of anything you do. You may love playing the guitar and being on stage but do you like it so much that you are willing to play 6 nights a week and never be able to go on dates because you are always on stage playing just so you can have a place to live? What I have told my children is that you should list out what you are good at doing. This list should be at least 10 things. You should then use that list to identify careers that you might be interested. When analyzing those careers you should look at other factors like pay, work life balance, stress, job opportunities, etc. That is how you should determine what you should do for a living. After that you can work on skills that you love doing but don't pay the bills like maybe music. Use it as a hobby and, if you want, as a side gig. This will give you the chance to learn and grow in the field. You can establish connections and figure out if it is something you would like to do more. There is a chance that side gig could grow into something greater, if you want it to, but at least you aren't betting your whole life on it.
I love almost everything Ramit says, but I really disagree with his views on budgeting, and sightly on renting.
Especially if you're poor, tracking every cent can really help you spend much less. And you can do that while also implementing the Rich Life system, and automating as much as possible. I would argue you can do that even better then, actually.
If you start with how much money is available and then decide how much you want to spend, that for me works a thousand times better than just logging what you spent in hindsight, when you can't change it anymore.
Tracking your spending for a month will help you see how much you are actually spending on everything. For example on that coffee.
After that first month, you start a budget with what's available and and decide the max amount you are willing to pay for all the things you need and want to spend money on. You set an amount (for coffee), and then you just stop buying (coffee) when you reach that amount. (Or you end up under budget and throw the excess at savings/emergency fund/investing).
No more overspending on anything, because everything is planned in advance. That alone takes so much money stress away. Because now when you buy something you know it's within your budget, you know you can afford it, and you know you are consciously spending money on either a necessity or something you value, or something that's guilt free.
I've had a "track every single dollar you spend" budget in ynab4 for over 10 years now. It takes literally 5 minutes every weekend and it has saved me so much money that I could then put into savings and investments that I would have otherwise spent on random crap I didn't need. And may I point out that overspending is something that comes up again and again and again in all of Ramit's Money for couples podcasts. Guess what, it actually does all add up.
Also having a budget where you track every single thing makes doing taxes extremely fast and easy. Again, stress free.
As for renting, I am saving for a house. I want to buy because I want the safety of "no one can throw me out, I'm growing old here". I don't want to have to deal with shitty landlords, mold problems or broken stuff that takes months to get fixed, or any of the other horror stories. I don't want random rent increases or inspections. I want a place I can make into my home without having to worry if I'm allowed to drill a hole in a wall. My cat wants perches and I want a backyard with bees and fruit trees and berries nuts and vegetables I can harvest until I'm 96.
– "Rent is the maximum you will pay": true, but only for now because it has been and will be increasing rapidly each year. Mortgage doesn't increase for 30 years.
– "It's cheaper to rent than to buy": very true when you compare renting and buying NOW. If you had bought a house in an expensive city 10-20 years ago, it would have been a good investment. But not anymore.
I risked it all to buy a house 9 years ago and I'm glad I did. My friend is paying more in rent for a 1-bedroom apartment than me paying the mortgage for a 5-bedroom house. Yes, there are repairs, insurance, property taxes, etc. so I ended up paying more and could have invested that extra money. But a calm house has helped us to anchor ourselves and make bigger financial progress.
I usually never post long comments like this, but I feel like I have to share because it helped me so much. Most financial advice is just garbage designed to keep you working forever, but The Elite’s Wealth Secrets by Robert Bluestein is completely different. It gave me the actual strategies the truly wealthy use, especially about debt as a tool and using leverage, not cash.
My biggest money problem wasnt budgeting it was just following bad advice that kept me broke… Financial freedom isnt about the number in your account, its about the structure protecting it. The Elite's Wealth Secrets by Robert Bluestein is the only book that isnt some modern fluff
15:09 Who’s on team “deadbeat” 🙋🏽♂️
Depending on how much it cost, I would rather invest in rental real estate than buy my own house (and this is coming from someone who bought a house)
Renting vs Owning… one is not better than the other. Run your numbers and make a choice but don't do it blindly because someone told you so. Finances are very personal.
Great advice, as always, Ramit!
He’s like a dog eh? Barking for no reason 😂Unsubscribe
i was stuck for years chasing the next big thing, it wasn't until a close friend told me about Forbidden Wealth Blueprint by Benjamin Goldman that i realized i was just a cog in a machine i didn't even understand. shifting my focus to systems has made me feel so much more deliberate and calm. it is not about the 9-to-5 grind or waiting for luck, it is about structure and discipline that works quietly in the background while you actually live your life.
i spent years following the rules and always wondered why i still felt so stuck. a mentor mentioned Forbidden Wealth Blueprint by Benjamin Goldman during a dinner, and it completely rewired how i view wealth. it is not about the hustle, it is about systems that protect you from the system itself.
I see a bunch of comments talking about Forbidden Wealth Blueprint by Benjamin Goldman and I’m glad it’s getting the recognition it deserves
When it comes to budgeting, your advice is perfect. I had naturally broken up budgeting into 4 categories and thought I was crazy for only keeping it simple like that. For me, my breakdown is: fixed costs 45%, invest 20%, save 15%, and guilt free spend 20%.
Yo im a fan but the csp is a budget lol
So true about the gambling. I went through all my debit credit cards one time when I knew my online gambling was out of control, I had spent/lost over 100k dollars. That was 10 years ago, I blocked myself from all online gambling sites that year and haven’t gambled since.
Before I understood how power and wealth actually work, I was stuck chasing motivation, quick wins, and external validation. Reading Shadow Behind The Gate by Brian Rothschild shifted my focus toward structure, discipline, and long-term positioning. I realized it’s not about hustling harder or waiting for a breakthrough moment, it’s about building systems that work quietly in the background. Once I adopted that mindset, I felt calmer, more deliberate, and far less controlled by distractions, fear, or noise online.
I felt this one. Success is simple you either outwork your excuses or you lose. Shadow Behind The Gate by Brian Rothschild pushed me to show up even on the days where motivation is zero
I once met someone at a gold storage facility in the UK. We talked about privacy, decentralization, and off-grid movement. When I asked what influenced him most, he didn’t say a course or a mentor- just quietly said, “Shadow Behind The Gate by Brian Rothschild” No context. No explanation. Just a book that opened a door I didn’t know existed.