WWAID?

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 — things like cutting back on coffee shop lattes or making your own laundry detergent — 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.

You’ll never see an Indian driving a two-door coupe. Seriously, think about it. If you have a neighborhood Indian—let’s call him Raj—he’s probably driving a four-door car, usually a Honda Accord or Toyota Camry. However, Indian people aren’t just fanatical about driving practical four-door cars. We’re absolutely nuts about hammering down the price to the last penny. Take my dad, for example. He’ll bargain for five straight days just to buy one car. Dear God, it’s not pretty. I’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 he’d spent five days bargaining them down. As he dragged me from the dealership, I just stared straight ahead, shell-shocked.

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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.

31 thoughts on “WWAID?

  1. ahh. just in time for father’s day.

    my dad and i went out shoe shopping. he flirted with the attendant in the little russian he knows. got her to call the owner at her home to bring down the price. and then got them to throw in a butt-ugly two foot long fluorescent lemongreen shoe horn just when we were picking up to go.

    love the dad. :-)

  2. I hope my sons learn from this!! I bargained like crazy for our Touring Ody when it was still a twinkle in Alabama ;-) .

  3. Status in my book is measured by what percent you were able to get off an item. I love to go car shopping with people like Sethi’s dad and my father-in-law (who is not Indian, but could very well be). They are shameless and unperturbed when it comes to haggling and the look on the salespeople’s face is priceless. It’s my money after all, why do I want to waste it on overinflated MSRP?

  4. Love the topic…my process is simple and is probably a WWAID:

    1. Learn everything you can about the product online from official websites.
    2. Read every online review about the product including possibly owner/user experiences.
    3. Assign weights to the reviews and comments (david pogue goes to head of the queue).
    4. Prepare spreadsheets with comparables.
    5. Understand exit clauses and return policies.
    6. Work out total cost of ownership.
    7. Do beta negotiation – i.e., eg. negotiate quasi seriously with a distant dealer just to understand how much third degree can be used with the alpha dealer.
    8. Walk out of a dealership a few times just to get used to the idea.
    9. By this time, you would have realized that you really can live without the product.
    10. Buy if it still meets all your impossible demands.
    11. If you learn your neighbor or friend got a better deal, return the product pronto and begin negotiating again.
  5. 30 yr fixed conforming refi at 4.875 with zero points and zero closing transaction costs…

    i will kick myself if it tanks down to 4.25 in six months :)

  6. He’s absolutely right about being cost conscious on a date is a no no and a sure way to lose the game. Someone invited me to the movies and then spent 10-15 minutes figuring out which coupon to use!

    My favorite part was “We all have these jackass friends…”

    I do wonder how much he spends on his eyebrows though.

  7. Lovely – I went on a total journey through his website, alternating between “Yeah! You’re so right!” and “Ooh, let me bookmark this link!”. At the end of it I had some 30 tabs open, feared crashing my browser-in-beta and have tons of ammo to take home to work on and throw at my friends and family. I do happen to be the girl who evangelizes about budgeting in my own group of friends and am a good saver myself, but he has great tips on how to do even better. So, thanks for the trip, Pavani.

    Must read – his guest post about automating your payments – link here.

  8. A desi man is the best thing to ever happen to my finances: shopping has become all guilt and little pleasure, it’s a total game to see how very little I can spend on fun- I borrow movies and music from the library. And phrases like “honey, I made that excel file” and “I returned my $70 purchase” are always guaranteed to get me some free fun(sexytime) with him.

    I even began reading blogs like Sethi’s and his friend’s blog Get Rich Slowly.

  9. He’s absolutely right about being cost conscious on a date is a no no and a sure way to lose the game. Someone invited me to the movies and then spent 10-15 minutes figuring out which coupon to use!

    I’ve found it a sure way to WIN the game. When a guy sees me with coupons and making conscious spending choices, he’s impressed. He knows I’m not a high-maintenance diva who will overspend either my or his money.

    On the reverse, if a woman becomes unimpressed with a man who pulls out coupons during a date, what does that say about her? If I were a man, I wouldn’t want to date such a woman who lacks insight and empathy during these financially trying times. God only knows what she will expect in the future.

    Gold digger alert!

  10. On the reverse, if a woman becomes unimpressed with a man who pulls out coupons during a date, what does that say about her? If I were a man, I wouldn’t want to date such a woman who lacks insight and empathy during these financially trying times. God only knows what she will expect in the future. Gold digger alert!

    Precisely. It is my firm conviction that first dates should be free or close to it. Anything beyond the cost of a couple of drinks is entirely too much.

  11. It is my firm conviction that first dates should be free or close to it

    that’s what 3rd dates are for

  12. Gold digger alert!

    I think this is a tad harsh. I wasn’t unfairly complaining that my date didn’t take me to a 4 or 5 star place, I was simply commenting on the awkwardness of the coupon during the date in the context of Ramit’s comments.

  13. Someone invited me to the movies and then spent 10-15 minutes figuring out which coupon to use!

    That is thoroughly ridiculous. When I go on a date, I order first and then politely tell the waiter that the lady will have an entree of equal or lesser value.

  14. in great contrast to rahul i have no problem with my dates supersizing their combo meal.

  15. I think this is a tad harsh. I wasn’t unfairly complaining that my date didn’t take me to a 4 or 5 star place, I was simply commenting on the awkwardness of the coupon during the date in the context of Ramit’s comments.

    Fair enough. But you could always step up to the plate and say, “don’t worry, I’ve got it.”

  16. I spent 3 hrs on the phone last Thursday negotiating down my new Sprint 2 year contract. Seriously. Then I got me a Palm Pre on Sat. I can enjoy it knowing that my bill is at least half the price of Iphone users :)

  17. Am I the only one here who had to Google “bottle service”? Guess I’m not the target audience for our Indian Suze.

  18. I know this guy who used to work at a car dealership and he said every single salesman would say “Ohhhhh shit” every time they had to deal with an Indian customer. It was pure hell for them.

  19. Used Car Salemen finally met their match in the Indian haggler?!!!

  20. Cheap is sometimes played off in the guise of “frugal.” It doesn’t just apply to consumers either. Case in point – Desi-aunty-merchants refusing to bargain down absurdly overpriced saris and salwars and then scoffing at you when you decide not to make a purchase. ARGH.

    Good points from this dude.

  21. in great contrast to rahul i have no problem with my dates supersizing their combo meal.

    Naturally, manju, and I appreciate that you are so understanding about their needs. In my case, of course, they feel no need to supersize, although, as a gentleman, I’ve always obliged their desire for a combo.

  22. although, as a gentleman, I’ve always obliged their desire for a combo.

    very sporting of you, rahul. i’ve often heard ladies desperately banging on your door…and when they do its nice to know you’re very generous with your combination…so that they can let themselves out.

  23. i’ve often heard ladies desperately banging on your door..

    manju, the wood which caused the ladies to make so much noise was not on the door.

  24. manju, the wood which caused the ladies to make so much noise was not on the door.

    well rahul, if you’re telling me your wood’s having trouble getting through the entrance, there is something you can take to supersize it.

  25. well rahul, if you’re telling me your wood’s having trouble getting through the entrance, there is something you can take to supersize it.

    Sounds like he needs to downsize instead.

  26. I don’t know. This sounds kinda racist to me if he’s calling Indians cheap in his columns.

  27. When I go on a date, I order first and then politely tell the waiter that the lady will have an entree of equal or lesser value.

    This would be funny if it wasn’t actually true.

  28. I spent 3 hrs on the phone last Thursday negotiating down my new Sprint 2 year contract. Seriously. Then I got me a Palm Pre on Sat. I can enjoy it knowing that my bill is at least half the price of Iphone users :)

    Woot, Abhi! I hear Palm Pre too…the multi-tasking ability is unmatchable…can take photos while listening to Pandora…. and I just love the ‘real’ GPS!

  29. Wow – I want to check his blog out now! Hopefully he’ll talk about turning some of that money earned on being frugal over to charity.