The Top 8 Financial Lessons from Netflix's How To Build Wealth

Article Overview

Define your spending desires and create a spending plan to track where your money is going.

Focus on paying off debt as a priority and set aside even a small amount each month to expedite the process. Instead of trying to match others, concentrate on what genuinely brings you happiness as everyone's definition of a rich life varies.

How to Get Rich on Netflix goes beyond quick schemes for making money and instead offers a docuseries that focuses on financial balance. More importantly, it teaches individuals to feel secure with their lifestyle, regardless of their income. In this eight-episode reality show, self-made entrepreneur Ramit Sethi travels across the United States to assist families in sorting out their finances. Sethi interacts with people from all income levels, and intriguingly, his solutions, advice, and suggestions often apply universally, even to seemingly different individuals.

Similar to Tidying Up With Marie Kondo, How to Get Rich is a captivating watch. It not only provides useful tips and tricks shared by Sethi but also offers the satisfaction of witnessing people better their lives. Sethi devotes approximately six weeks to each family or couple, delving into various aspects, including their credit history and the strength of their marriage. With his intelligence, patience, and ability to understand people, Sethi often finds himself playing the role of a counselor as much as an auditor in many episodes. Regardless of the circumstances, Sethi's financial advice remains relevant for everyone.

Conscious Spending Is A Must

Sethi encourages people define their spending desires

What immediately stands out in How to Get Rich is the staggering number of individuals featured on the show who seem to possess little to no understanding of the extent or nature of their financial resources. For Sethi, the focus is not on mere budgeting, but on devising a comprehensive spending plan. This recommendation arises from the realization that many individuals mindlessly spend money on things without actively considering whether they truly desire those purchases. A classic example of this is the automatic monthly payments for streaming services that numerous people sign up for and subsequently forget about. Sethi pushes individuals to clearly outline their desires so that they have a conscious awareness of where their money is being directed.

Do Not Let Debt Pile Up

Even $100 per month can pay off debt faster

Whenever Sethi meets with a family on How to Get Rich, one of the initial steps he takes is reviewing their finances to identify any outstanding debts. It comes as no surprise that many of his clients are burdened with significant debt. Monique and Donnell, a couple he is assisting, specifically have a substantial amount of credit card debt that remains unpaid. However, their main issue lies in their lack of priority when it comes to debt repayment. To address this, Sethi collaborates with them to redefine what they consider to be an appropriate monthly payment. He advises that allocating an extra $100 per month towards the debt can dramatically reduce the time required to clear it.

Everyone Has A Different Definition Of A Rich Life

Live the lifestyle that makes you happy, not what you think you should want

A crucial aspect of Sethi's book, How to Get Rich, is helping individuals understand that the definition of a rich life can vary greatly from person to person. Sethi rejects the notion of "keeping up with the Joneses" and emphasizes that many individuals who struggle financially base their happiness on others' opinions. Instead of determining what truly makes them feel wealthy, they invest their money in a lifestyle they believe they should have, rather than one they genuinely desire. Sethi motivates individuals to recognize that there are numerous paths to living a fulfilling and prosperous life.

Accountability Makes Saving Money Easier

Share your financial strategy with someone you trust

When Sethi appears in the narrative of How to Get Rich, his mere presence serves as a catalyst for a family to become more attentive to their financial situation. Sethi refers to this as accountability. Achieving the ability to generate more income through financial management necessitates the capacity to ask questions and receive constructive criticism. Through accountability, whether it be from a partner, coach, parent, or friend, one enhances their prospects of attaining financial stability and even accumulating wealth. Having someone with shared aspirations and a comprehension of a collective strategy greatly assists in the pursuit of monetary contentment.

Making A Financial Plan Is Key

Without one, people often spend when they are trying to save

Many of the individuals featured in How to Get Rich lack a proper financial plan, despite their efforts to save. Sethi poses a valid question - what's the purpose of saving if there's no clear plan in place? Without a solid financial plan, money stored in checking or savings accounts will gradually be depleted due to unnecessary purchases. Whether it's a new home, a car, or even a wardrobe upgrade, it is essential to have a purpose for accumulated funds. Crafting a financial plan allows smart savers to significantly increase their chances of achieving their goals and refrain from squandering their hard-earned money.

Spending Problems Affect People Of All Income Levels

A higher income doesn't equal money wisdom

What makes How to Get Rich on Netflix particularly intriguing is that Sethi interacts with families from various income brackets, assisting them in achieving financial balance and a more prosperous lifestyle. Interestingly, in the series, it is often observed that those who have the highest incomes often lack financial planning skills. Sethi demonstrates that regardless of the amount a family earns, instability and poor money management can still be problematic. High income does not automatically eliminate bad habits and inadequate planning; on the contrary, it only magnifies their issues. Therefore, Sethi's teachings hold even greater value for individuals in higher income brackets.

Owning A Home Is Not A Must For Those Who Want To Get Rich

Consider how much you've saved for a down payment and how long you plan to live there first

Investing In Yourself Is As Important As Any Investment Portfolio

Sethi offers a unique perspective on the debate between renting and buying. Traditionally, purchasing a home has been considered the logical choice. However, Sethi argues that renting can often be a wiser decision. To determine if buying a house is right for you, he suggests considering factors such as saving 20% for the down payment and planning to reside there for at least a decade. This unconventional advice differs from what the families in the series are accustomed to hearing. Nevertheless, given the current state of the housing market in today's global economy, Sethi may actually be onto something.

This, along with a financial plan, can help you stay disciplined

In addition to offering advice on saving and maximizing available funds, Sethi advises participants on How to Get Rich to prioritize self-investment. This includes exploring new career paths, pursuing higher education, and staying informed about current financial trends. While creating a financial plan, managing debts, and setting goals are all effective strategies for enhancing financial well-being, Sethi emphasizes that investing in oneself is a crucial and lasting measure to maintain motivation and discipline in saving and growing wealth.

Editor's P/S

As a passionate fan of the show, I found the financial lessons presented in "How to Build Wealth" to be highly valuable and thought-provoking. The emphasis on conscious spending and creating a spending plan resonated with me, as it highlighted the importance of being mindful of where our money is going. The show also highlighted the importance of paying off debt as a priority, which is something that I have been working on in my own life. I appreciated the advice to set aside even a small amount each month to expedite the process, as it showed that even small steps can make a big difference.

One of the most important lessons I learned from the show was the importance of defining my own version of a rich life. The show emphasized that everyone's definition of wealth is different, and that it is important to focus on what truly brings us happiness rather than trying to match others. This lesson has helped me to re-evaluate my own financial goals and to focus on what is truly important to me. Overall, I highly recommend "How to Build Wealth" to anyone who is interested in improving their financial situation. The show provides valuable insights and practical advice that can help you to achieve your financial goals.