A big reason is that six figures only don’t go as far as before, through inflation and rising interest rates, among other factors beyond an individual’s control. But another, according to Ramit Sethi, the author I will teach you how to be rich and star of netflix series “How to get rich” is completely under our control. Our perception of money is “very little correlated to the amount in the bank” because we focus on the wrong things.
“It’s counter-intuitive for people. A lot of people think ‘if I just had $10,000 more, or if I finally had $150,000 in my bank account, then I’d be fine with the money,'” said Sethi, who studied psychology at Stanford. Fortune. “Wrong! You won’t.
In fact, many often feel worse after reaching these arbitrary milestones, he says, because they are unhappy with where the money is going. Instead of focusing on how many you earn, Sethi suggests actively working to improve your financial psychology. Ask yourself the tough questions: What do you actually like to spend money on? For what? How can you be more intentional with where your money is going?
It’s shocking how many people have never considered these questions, he says. Instead, they often focus on checking boxes prescribed by those around them.
Sethi has worked in the personal finance field for over ten years. In “How to Get Rich,” which debuted on Netflix earlier this year, he helps people across the country learn about their finances and themselves so they can live their best wealthy life. For Sethi, a “rich life” is not necessarily the one that brings in the most money or is the most luxurious. It’s about prioritizing what matters most to everyone.
Courtesy of Netflix
Most personal finance advice in the United States is restrictive, guilt-based, Sethi says. It all depends on what you should not TO DO. call it him Starbucks latte approach: you could save for a down payment if you just made your coffee at home, or better yet, forgo all the little luxuries. Sethi takes the opposite tact, which he calls the monetary dial approach: you turn the dial up on the things you like and try to drastically lower the ones you don’t.
“Americans like to feel bad, to feel guilty, to feel anxious,” he says. “Money should be fun, we should have a healthy relationship with money.”
It takes a big shift in perspective from how we normally view our finances. When he asks most people what their ideal wealthy life looks like, “90% say, ‘I want to do what I want, when I want.’ it. Either they say they want to travel, but not necessarily on a private jet. They want to eat more, but not necessarily in expensive restaurants.
“We tend to minimize what we want,” Sethi says. “But I’m not asking for what you don’t need. I ask what you want. What do you like to spend money on? »
One of Sethi’s most controversial opinions is that buying a home is not right for everyone; home ownership is not a component of every person’s wealthy life. On the face of it, this is unequivocally a true statement. Although owning a home can help many people build wealth, it can also be disastrous for the financial well-being of some other people.
But because the dream is so ingrained in American culture, Sethi is often referred to as a “secret landlord” for telling people to do the math before buying (implying that he takes advantage of people who remain tenants). But that’s just one way he encourages people to be more thoughtful and intentional about what they want out of life. If you’re making six figures but barely able to pay your mortgage each month, of course you’re not going to be happy.
“Americans are really good at making decisions that they think will make them happy but will make them deeply unhappy,” like moving to the suburbs to “go into insurmountable debt to own a home,” he says. “You know we don’t have to do this?” You can choose what your rich life looks like.
