Would you take financial advice from a 26-year-old whose book is called “I Will Teach You To Be Rich”? For the readers who helped blogger Ramit Sethi’s book climb onto The New York Times best-seller list and those who regularly visit his web site or pay to subscribe to his Scrooge Strategy newsletter, the answer is yes. You may have seen Sethi on TV news shows commenting on personal finance matters or read his answers at The Times “Your Money” column. Last week on ABC he elaborated on the differences between frugal and cheap.
Sethi is a Stanford graduate who speaks and writes on personal finance issues. After investing his first scholarship check and promptly losing half of it, he decided to learn more about money so that he wouldn’t lose the rest. Sethi, who loves Suze Orman and used to write a comedy column for his university’s paper, gave his finance site a tongue-in-cheek name that would grab attention. Despite what it may suggest, he does not offer readers a get-rich-quick scheme. The advice freely available on his web site is about planning, saving and changing spending habits. Popular blog posts include “The $28,000 question: Why are we all hypocrites about weddings?” and “Conscious spending: How my friend spends $21,000/year on going out.”
Sethi’s tips are aimed at college students, recent graduates and young professionals, and he shares situations from his own personal finances and those of other young people he knows. His casual tone and irreverent style of humor won’t hit everyone the right way (“Listen up crybabies”), but probably help keep things a bit more lively than typical personal finance articles or lectures.
His general approach seems to be eschewing small savings â€” things like cutting back on coffee shop lattes or making your own laundry detergent â€” in favor of what he calls “big wins,” which inlcude renegotiating credit card debt and insurance rates, getting overdraft fees waived and consolidating student loans. Or at least that’s what I think Sethi means when he writes, “That’s why, whenever I read a frugality tip, I ask myself one question: WWAID? What Would An Indian Do?”
He also promises to teach how to “negotiate like an Indian” and the table of contents for IWTYTBR has sections on “Why Indian people love negotiating” and how to “negotiate fees like an Indian.” In the first chapter, available online, Honda-owner Sethi shares a story of how he came by his education in negotiation.
Youâ€™ll never see an Indian driving a two-door coupe. Seriously, think about it. If you have a neighborhood Indianâ€”letâ€™s call him Rajâ€”heâ€™s probably driving a four-door car, usually a Honda Accord or Toyota Camry. However, Indian people arenâ€™t just fanatical about driving practical four-door cars. Weâ€™re absolutely nuts about hammering down the price to the last penny. Take my dad, for example. Heâ€™ll bargain for five straight days just to buy one car. Dear God, itâ€™s not pretty. Iâ€™ve been along for the ride on these weeklong negotiating sessions with him before. Once, as he was literally about to sign the papers, he stopped, asked them to throw in free floor mats (a $50 value), and walked away when they refused. This, after heâ€™d spent five days bargaining them down. As he dragged me from the dealership, I just stared straight ahead, shell-shocked.
As you can imagine, by the time I went to buy my own car, I had been steeped in a rich tradition of negotiating. I knew how to make unreasonable demands with a straight face and never take no for an answer. I took a more modern approach, however: Instead of spending a week going from dealership to dealership, I simply invited seventeen dealers in northern California to bid against one another for my business while I sat at home, watched The Real World, and calmly reviewed the emails and faxes as they came in.