How To Make Money..."Do Not Buy A House!" 10 Ways To Make REAL Money: Ramit Sethi

Most people say they want “freedom” or to “do what I want when I want” but cannot describe what that actually looks like. Sethi pushes people to specify seats on the plane, destinations, how long they travel, who comes with them, and what their perfect week looks like. This clarity reveals where spending and goals misalign and becomes the basis for every financial decision.

Track four percentages of take-home pay: 50–60% to fixed costs (rent/mortgage, debt, groceries, car), 5–10% to savings (emergency fund, near-term goals), 5–10% to investments (wealth building), and 20–35% to guilt-free spending (travel, dining, clothes, hobbies). A quick back-of-the-napkin allocation against these benchmarks shows your priorities, where you’re overextended (e.g., housing), and where to adjust without resorting to deprivation.

Sethi stresses that buying a home is not automatically a good investment and can be far worse than renting once you factor in maintenance, taxes, interest, transaction costs, and opportunity cost. He cites living in New York where owning would have cost ~2.2x his rent each month; by renting and investing the difference, he came out ahead. For a primary residence, the rule is: treat it as a lifestyle choice first, investment second, and never buy without a 10-year horizon and a spreadsheet.

You don’t need stock-picking skills or a high income to get rich. Open an account at a low-cost brokerage, pick a target-date or broad index fund (e.g., an S&P 500 fund), and automate monthly contributions of at least 5–10% of take-home pay. Avoid gamified trading apps and frequent checking; treat investing like putting a turkey in the oven for decades—set, forget, and let compounding work.

Using a 7% real return (after inflation), Sethi walks through a compound interest calculator: starting at 16 with $5,000 and contributing $5,000/year grows to over $130,000 by 30 and ~$736,000 by 50. With higher later-life contributions (e.g., averaging $30,000/year over 49 years), the projection exceeds $12 million. The lesson: start as early as possible, increase contributions as income rises, and don’t chase unrealistically high returns.