Tue, May 30, 2023 4:29 AM
By Liam Gibson | Wealth of Geeks, Wealth of Geeks
Binging on personal finance may sound geeky, but one new Netflix series puts a dramatic spin on money management.
Finance guru Ramit Sethi's debut Netflix series, How To Get Rich started streaming in April.
In the 8-part series, he coaches 12 people through financial struggles, ranging from reckless crypto investments to debilitating debt traps. The Netflix show offers a window into the finance guru's unique philosophy for economic well-being. His show has some colorful characters, yet is his advice well-suited to most people?
Here is a look at some of Sethi's central tenants and second opinions from other experienced financial advisors.
The Rich Life
His emphasis on the now sets Sethi apart from many other finance gurus. He argues that it's possible to live well today and that preparing for a comfortable future life in retirement shouldn't have to come at the expense of enjoying your life in the present.
He also urges people to focus on the bigger money moves - negotiating a raise or moving to a new neighborhood, rather than saving a few bucks by forgoing a coffee each day.
The core of Sethi's philosophy is about helping people live their own "Rich Life." This doesn't mean splurging on flashy sportscars, but spending intentionally on the things that truly bring you joy while cutting back on expenses, adds value to your life.
By prioritizing your spending in this way, you can enjoy the things that truly matter to you while still maintaining a healthy financial situation.
"Sethi's philosophy… is an interesting approach to personal finance," says Jorey Bernstein, CEO of Bernstein Investment Consultants.
"While it's important to prioritize spending on things that bring value and joy, it's also important to maintain financial discipline and avoid overspending or acquiring unnecessary debt. Balancing spending and saving that aligns with individual values and long-term financial goals is
key to achieving financial well-being."
Advice on Advisors?
Financial advisors perform various functions for people, from tax strategy to estate planning. Depending on the services given, there are various ways to pay financial advisors, too.
On the show, Sethi advises people to skip hiring a financial advisor and manage their own money. If they do need assistance, they should avoid asset under management (AUM) advisors and only pay by the hour.
"I enjoy Ramit's advice, except for when he says to stay away from AUM advisors. He obviously thinks all AUM advice is just investment management but doesn't see that full wealth management can be accomplished using the AUM pricing model," says Dave Grant, Founder of Retirement Matters.
"While hiring by the hour is fine for someone with a very simple situation or just looking to set up an investment account, there is a lot more to working with an advisor than just investment management," says Dana J. Menard, CFP and Founder of Twin Cities Wealth Strategies.
"For most, just having someone to help keep you held accountable is worth the advisory fee."
Double The Trouble?
Finance is personal, but unless you are single, you rarely do it alone. It can be difficult to live your rich life if you are in a serious relationship with someone whose financial outlook on money differs substantially from yours.
Sethi's podcast - named "I Will Teach You to Be Rich" - is devoted to diagnosing the causes of financial stress between couples. Each long-form episode takes a deep dive into the financial life of the couple and probes each person's divergent attitudes toward money.
Eric Leider, Founder & Life Planner at MVMT Life Planning, praised Sethi's show for airing "real conversations about money that need to be heard."
"When it comes to money disputes for couples, past traumas or different life experiences are typically the root issue. It may also be the case that one person in the relationship just doesn't feel heard by the other," he says.
Leider also coaches couples on shared financial well-being. This involves each person sharing what is most important to them and identifying their own unique values before bringing the two sides together to create their own "Household Life Plan."
Yet some say Sethi's coaching on the emotional aspects of a relationship runs the risk of overreach.
"Financial advisors are not defacto therapists, no matter how much some people in the financial advice space claim," says Daniel Yerger, CFP, President of MY Wealth Planners. "A couple's money issues can be surface-level disagreements… or deeply seated psychological traumas."
"We can help establish compromises or help give couples the space to be vulnerable and open about their objections or concerns, but we shouldn't be digging into people's psyche or relationship issues deeply without the requisite clinical and therapeutic training, which the vast majority of us simply don't have."
Ramit Sethi's unique approach encourages people to seek out what motivates them when it comes to money so they can optimize how they use it to enrich their lives. Granted, some of his advice might not suit everyone, and some people may require more tailored guidance from local financial planners.
Regardless of what you make of his philosophy, though, there is no denying Sethi has done wonders for normalizing conversations around money and, through his range of content, putting personal finance in the spotlight.