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Ramit Sethi's best money advice is no secret or magic – it's math



Almost anyone can learn to handle money well, according to financial expert Ramit Sethi.

"It's not that hard, it's not a puzzle, it's not magic, it's just math, it's totally, totally understandable," he told Business Insider.

Everyone is battling their own "invisible money scripts," writes Sethi in the latest issue of his bestselling novel, "I'll teach you to be rich." These are messages we tell about money, often based on ideas or perceptions that we picked up as children from our parents or peers.

Some of the most common money scripts include "money changes people"; "Credit cards are a scam"; or "the stock market is playing." To effectively manage money, we need to "rewrite" our scripts, Sethi said.

"You might think," Well, I'm not the sort of person who's good at money, "but you can actually be very good at the money ̵

1; and the bar is so low," he told Business Insider. "All you have to do is get your money to go where it's needed – it's not that hard, you can do it and you can be very good at it."

Sethi recommends how many financial experts automate as many of your finances as possible – this is where math comes in (the good news is that you really only have to do it once). First and foremost, decide what percentage of your salary you will contribute to your 401 (k) or other pension plan. The money will be debited before it enters your bank account and you will learn to live without it.

The remainder of your paycheck should be deposited in your checking account – it's like an e-mail inbox for your money: everything goes there before it's filtered to the right place, writes Sethi. Create automatic transfers from your checking account: A) Pay for your credit card bill and any fixed monthly costs that can not be paid by credit card, and b) Finance other investment and savings accounts outside of your salary suspension plan for work. What is left over, you can spend.

According to Sethi, setting up automatic financing and bill payments can create a unique and profitable system that requires little or no effort to maintain.

"Not only are your bills automatically and punctually paid, but you save and invest money every month," he wrote. "The nice thing about this system is that it works without you doing anything and is flexible enough to add or remove accounts at any time.


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