Picture a best-selling personal finance writer. Chances are, you won’t imagine a 26-year-old who hates frugality tips and advises readers on “how to negotiate like an Indian.” Ramit Sethi has built a huge following on his blog, I Will Teach You To Be Rich, through brutally practical advice that advocates smart long-term planning over penny pinching. Since creating the blog in 2004, Sethi has been featured in The Wall Street Journal, Fortune, and BusinessWeek, and on NPR, ABC News, and the CBS Early Show. His book I Will Teach You To Be Rich, a six-week program for automating your money and your life, has hit both the New York Times and Wall Street Journal best-seller lists.
We caught up with Sethi to discuss how to blog your way to success, what freelancers should budget for, and why skipping lattes won’t make you rich.
What motivated you to start your blog, I Will Teach You To Be Rich?
I came from a middle-class family, so I had to apply for a lot of scholarships to get into college. The first scholarship check I got was for $2,000; I invested it in the stock market and lost half. I started to figure out how money worked, and taught my friends at Stanford. When I told them about a course I developed they said, “That’s awesome,” but for a year and a half, nobody came. I realized that college students were lazy and nobody wanted to go to a course on personal finance because it would make us feel bad about ourselves. So I decided to start a blog so people could read it in the comfort of their dorm rooms. After six months, it started to take off.
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What differentiates you from the other personal finance blogs?
I don’t talk about pinching pennies. I don’t tell you not to spend money on lattes. I don’t talk about keeping budgets. None of that advice has worked, and I’m brutally realistic. If you have everyone on TV telling you not to spend money on lattes, and yet everyone does, clearly something’s not working. I Will Teach You To Be Rich is about spending extravagantly on things you love, but cutting costs mercilessly on things you don’t. The blog realizes that not everyone wants to be personal finance experts. If I tell you to keep a budget, you’ll keep it up for two weeks. The whole point of the blog is to automate your life as much as possible with money, reduce your number of choices, and to live a rich life, whatever that means to you.
| “I hounded a lot of different bloggers and started spreading the word. After six months, I got covered in The Wall Street Journal, which led to one of the biggest traffic jumps in one day, from close to zero to 9,000 unique readers.” |
When you were starting out, what was the biggest hurdle you had to overcome?
The number one hurdle was writing consistently and writing stuff that people really care about. It’s easy to write about the top 10 ways to do blah, but that stuff has no shelf life. Nobody remembers it after two days. The second part is telling people about [the blog]. A lot of people think, ‘If you write it, they will come,’ and sit back. That’s not true. You have to go out and tell people about it yourself.
How long did it take you to gain a big audience?
After the first six months. You can go back and look at the archives; there were very few comments. I hounded a lot of different bloggers and started spreading the word. After six months, I got covered in The Wall Street Journal, which led to one of the biggest traffic jumps in one day, from close to zero to 9,000 unique readers.
What is your take on personal branding? Do you consciously brand yourself, or does it naturally come through in your writing?
If you have a strong voice, it comes through naturally. A lot of blogs are often very similar to each other. The ones with the strong voice and a lot of luck seem to get more exposure. For me, the personal brand, whatever that may be, comes naturally. I have very strong opinions on psychology, automation, and blogging. And at some point, you have to be strategic about your personal brand. For example, I’m not a frugality blogger. I’ve been very clear about that, because there are other bloggers who do it better. But I am someone who writes about entrepreneurship and earning more; if that’s interesting to you, then my blog may be a good choice.
Did you consciously reach out to other similar blogs when you were starting out?
Yes, and I still do. For example, I just wrote a post on weddings. Most posts on weddings these days tell you to have a small simple wedding, like how to have a $200 wedding for 500 people. In my opinion that doesn’t work. When it’s our wedding day, we all want the biggest and the best. Let’s just acknowledge it and be realistic, and here’s how to work with a big wedding. The idea was somewhat provocative. The key step was reaching out to wedding bloggers; the article caught on, and the wedding audience clicked through to my blog and started reading other posts.
| “I built user groups and a pre-launch book community that would talk about the book amongst themselves. I tried to transition the conversation from ‘Ramit to readers’ to ‘readers to readers.'” |
Let’s talk about your new book. What will readers get from the book that they can’t get from your blog?
At least 80 percent of the content is new. I didn’t want it to be a blog-to-book. On any given day on my blog, you could read about taxes, real estate, entrepreneurship, or freelancing. That’s nice, but not very structured. The book is a six-week structured program on getting rich, including optimizing your credit cards, setting up bank accounts, automating your money, and investing it. If you’re wondering what you should do with your money, by the end of the book you will know vastly more than your friends.
How did you successfully market your book and turn it into first an Amazon best-seller, then a New York Times best-seller?
Most of the marketing was done before I ever started writing the book. The marketing was getting together a community of people interested in personal finance, and people who value I Will Teach You To Be Rich and don’t think of it as just another blog. I survey my readers a lot to figure out what they want. Most of the work was done over the past four years. I built user groups and a pre-launch book community that would talk about the book amongst themselves. I tried to transition the conversation from “Ramit to readers” to “readers to readers.”
How important is it for bloggers and writers to devote time to Twitter for promoting themselves?
I post on Twitter (@ramit) four to five times a day, but I’m not sure it’s a good use of time for business or promotional reasons. It’s fun, but click-throughs are dramatically lower on Twitter than on my email list or blog. I have over 7,000 followers on Twitter, and it’s one of the least important aspects in my portfolio.
What do you think of the media being suddenly fixated with this idea of “recession chic,” that it’s suddenly hip to save money?
I think it’s completely ridiculous. This happens every time there is an economic change. The media seizes on it and makes it the idea du jour. There are two kinds of people right now: One kind will only read the media and think they should cut down on spending, but when times get better, they’ll go out they’ll start spending more again. They’re followers and will do whatever everything else is doing. The others are people who see that things are tough, try to find a system to optimize their money, make sure they’re not overpaying, and even find ways to earn more. When times get better, they’ll earn more and realize they can spend money on whatever they want, whether it’s investing or buying expensive jeans.
Everywhere I go on my book tour, the media is very interested in talking about people who’ve lost their jobs. That’s a reasonable concern, but 90 percent of people still have their jobs. They wonder, “I have a paycheck, but where should it be going? Are there ways to cut back without giving up the things I love?” But [reporters] I’ve spoken with on national TV, regional TV, and newspapers don’t want to talk about that. You have to decide if you want to panic with everyone else or be constructive about spending money.
We all know that newspapers and magazines are in turmoil and few jobs are secure. Do you have any tips for media folks, especially freelancers, on the best way to manage their money?
If you have an irregular income, some months making $3,000 and other months making $200, what do you do? The goal is to figure out what you need to live on at minimum, including rent, eating out, gifts, insurance, everything. Factor that in. If it’s $2,000, then for the next six months, take everything that you make over $2,000 and put it into a savings account. What you want to work toward is four to six months of emergency funds. Then you invest or save the extra money you make. Right now, because times are so volatile, you don’t want to have no money if your freelance work dries up.
What’s next for you?
One project I’m working on is on health insurance for freelancers and entrepreneurs — tactical steps for getting health insurance that actually works. The other is how to earn your first thousand dollars as a freelancer. And it’s going to be pretty expensive [to produce]. It’ll include interviews, videos, case studies, which will all be on I Will Teach You To Be Rich.
Four tips for becoming a widely-read blogger
1.Write content people really care about. Forget about Adsense and checking stats until you have good content in a topic you’re passionate about.
2. Offer to guest post. Find high-traffic bloggers you admire and write for free. Good work will lead to high traffic for your blog.
3. Spread the word. Whether it’s content on your own blog or guest blog posts, let other relevant bloggers know.
4. Get readers to stick around. If someone comes to your site or reads your guest article, have a way for them to leave a comment or subscribe, becoming long-term readers.
Diana Kuan is a freelance writer who divides her time between China and the U.S. She often blogs on the road for AppetiteforChina.com.
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