This is an honest review of How to Win the Game of Advanced Personal Finance, a program from Ramit Sethi.
Advanced Personal Finance (APF) is a video course that serves as the “next steps” in personal finance.
If you’re reading this, you’re probably wondering:
“Should I buy Advanced Personal Finance?”
In this article, I’ll explain:
- Who should buy Advanced Personal Finance
- Who should not buy (and what to do instead)
- How the Advanced Personal Finance program works and the changes I implemented in my personal finance system
Let’s get started.
Disclosure: I used to work with Ramit Sethi at I Will Teach.
I bought APF because even though I worked with a financial advisor, I wanted to hear Ramit’s take on building your “financial fortress.” I felt like I was still in the dark with how my investments performed, and that I was still handling too much of the minutia around my finances.
There had to be a better way.
Who should buy Advanced Personal Finance?
Based on my experience through the program, seeing the level of financial acumen of the other participants, and what I was able to implement, you should take this program if:
- Have an individual salary greater than $100,000 (or household salary greater than $140,000)
- Have read Ramit’s book, I Will Teach You to be Rich and implemented 75% of the lessons
- Want to hire out parts of your personal finance system (e.g., an accountant for taxes)
Who should not Advanced Personal Finance?
In my opinion, you should not buy this program if:
- Your salary is currently less than $100,000
- You have any consumer debt
- You want total control over every aspect of your personal finances (e.g. you file your own taxes and handle your own asset allocation)
- You subscribe to the FIRE (financially independent, retire early) lifestyle
If you fall into the above bucket, I think you should save your money and time, and instead buy Ramit’s book, I Will Teach You to be Rich (the second edition comes out 5/14/2019) instead of Advanced Personal Finance. If you implement the lessons in the book, you can do some serious damage.
(Want a sneak peek into what he covers in his book? Check out my notes on Ramit’s I Will Teach You to be Rich.)
Why is APF not a fit for you if you fall into the above bucket? It’s not a reflection of your knowledge or abilities, but the contents of the program. More details are below, but a big part of APF is building out a team to help you with your finances.
If you have debt or if you currently make less than $100,000, my belief is that your money and time is better invested in automating your finance system with free tools, rather than hiring a team.
Next, let’s talk about how the program works.
How the Advanced Personal Finance course works
One of the first things Ramit asks is to explain your financial situation in the comments. Immediately, I notice: I’m surrounded by people more advanced than me. And I love it.
These people — who are others in the program — unabashedly talk about their quarter-million-dollar salaries, their multiple houses, stock options, and successful small businesses. They do so with candor, without gloat or brag.
I could see how this might turn off others, but I found it refreshing and motivating. These people are just being blunt: “This is where I am at this stage in my life and this is why I am in this course.”
It also reinforces the idea that no matter how much money you make or how “advanced” you become, you’re still going to have questions about “what’s next” and “have I checked all my boxes?”
A second major takeaway right off the bat:
Advanced personal finance is not doing more of the basic stuff, but better. Advanced personal finance is learning how to run your finances like a CEO — that means focusing on the strategy and delegating responsibility to others.
In other words, it’s not further optimizing your Roth IRA or finding an even better credit card. If you’ve gone through the basics, you’ve checked all these boxes. Instead, advanced is letting yourself off the hook from doing all of this yourself, so you can focus on the strategy of earning more, increasing investment, and protecting what you have.
From a student’s perspective, it was jarring at first — Ramit was basically saying, “I’m not going to teach you what you thought you were going to learn.” However, it made sense, and I could feel myself going along for the ride.
From the perspective of someone who builds courses, I was definitely impressed. The ability to shift expectations during a program is not easy and extremely nuanced. It is not easy to convince someone with preconceived notions to do the unexpected. Taking this program for example, if you came in expecting to learn more about investing in cryptocurrency or using platforms like Fundrise, it’s very hard to convince them that where they NEED to be focusing is learning to delegate their taxes, bookkeeping, and investment strategy… and then executing on those things.
However, Ramit makes the transition pretty seamlessly.
The program has three modules, with three or four videos per module. Below is a quick summary of each module:
Optimizing your finances
Optimizing your finances covers the three pillars of the program at a 30,000-foot level: your taxes, investments, and wealth protection. The goal of the module is to first provide more education and bust common misconceptions. For example, one of the lessons points out that truly advanced tax sheltering tactics are reserved for the 1% of the 1%, and for nearly everyone in this course, they should focus on more common ways to reduce taxes.
Overall, the module is a good primer of what’s to come.
Building your team
This module focuses on how to hire and then delegate three specific parts of your finances to your “team.” Ramit recommends delegating your bookkeeping, your taxes, and your investments. He goes into the specifics on how to solicit recommendations for each position, how to identify good people, and what you can expect to pay.
In very much IWT fashion, he includes example scripts for outreach, different permutations of teams, as well as a look at his own investment portfolio.
Living your rich life
The third module covers levers you can pull in order to live a better life. Ramit calls this framework “Money Dials” and encourages you to use small experiments to learn ways to use your money to live a more fulfilling life.
It’s a good framework to think about spending money. I spoke to a friend who said this module was the most revealing to him. To be honest, it didn’t feel particularly relevant to me at this time. Aside from investing money to be more productive, I feel lucky that I have pretty much everything I want, and don’t really think about spending money. This feels like one of those lessons I’ll revisit in 5 years.
What I’ve implemented from the program
The content of a program is only as good as your ability to execute on it. So I wanted to talk about what I’ve actually done, since going through APF.
I talked a bit about mindset at the beginning of this post, but want to come back to it for a second: The program really changed my religion regarding “what’s next” for my personal finances. This can’t be understated:
It’s not about learning to do the basics better. It’s having a vision, setting the strategy, and learning to delegate.
I changed financial advisors Getting more visibility on my investments
Update March 30, 2019: At the time of the original post, I was working with a financial advisor called StashWealth. I liked the team, I like the plan they put together, but what I struggled with was the lack of visibility in how my investments were doing.
Since taking the program, I’ve researched WealthSimple, Betterment, and Vanguard. I had calls/emails with advisors from all three and decided to switch to Vanguard. I’ve recently completed the switch and now everything’s over there.
I’ll explain my decision more in a future article, but for now, it suffices to say I was heavily influenced to switch based on this program, and I’m glad that I did.
I started using Mint again
Ramit recommends after you reach a certain level to invest in a bookkeeper. If you’re not at that level, he said Mint was a good option. I’ve had Mint for probably 10 years, but back then, frankly, their budgeting tools were poor. When I revisited the app, I was surprised to see how much better it was.
It’s much easier to track expenses and get a high-level view on cash flow. I’ve started using the tool again at the end of each month, to pull up essentially a cash flow statement and understand where my money went. As I continue to tweak the app to better suit my needs, I can see it becoming very useful.
I hired a new CPA
I’ve been using the same CPA for years, who’s based out of Los Angeles. He’s been terrific and I still recommend him to friends, depending on their situation. However, my tax situation has gotten more complicated (with a kid, house, K1s, making money instead of working for free all the time, etc.) and as I think about future businesses, I want to develop a better working relationship with my accountant.
The scripts and recommendations in the course helped me interview four potential CPAs, and I’ve whittled it down to one.
I finished my estate planning
Using the scripts in APF, I reached out to a few lawyers to start the estate planning process (setting up a trust, power of attorney, and health proxy). I interviewed a few lawyers, got quotes, negotiated a better rate, and finalized signed the paperwork recently. Now that I have a family, it’s a major relief to have this checked off the list.
I’ve also set up life and disability insurance and am relieved to know my family will be taken care of if something happens to me. I’m also in the middle of setting up life and disability insurance and will be relieved when I know my family is taken care of in case anything happens to me. I’m balking at the amount of paperwork required, but it’s slowly getting done.
I have a “mental outlet” for investments
I already talked about my financial advisor, but there’s another mindset this program helped me shape. Ramit called this mindset, a “mental outlet.”
Basically, when it comes to investing, I recognize I go through a lot of FOMO. After the Cambridge Analytica scandal, I wanted to put more money into Facebook. I see the ads for Fundrise or RealityMogul, and I want to throw some money in there to play around.
The problem is this: financially it may be a good bet. However, behaviorally, it’s a poor decision. Because if I do that, I’ll start to more actively monitor my positions and give up mindshare to think and worry about those positions. And frankly, I don’t trust myself to make the right decisions should there be large movements in the market.
In that case, I’m better off sticking to certain index funds and making a boring return on my investment, so I can focus on my job, writing, and other side projects.
Which is where “mental outlets” come into play. A mental outlet is a small percentage of your assets you treat as “fun money” to play around with higher risk investments. For me, my mental outlets are cryptocurrency and poker. I get to play around… but if it all goes to zero, the foundation of my financial fortress remains solid.
How to Win the Game of Advanced Personal Finance – Summary
If you’re further along in your personal finance journey (e.g. implemented the advice in the IWT book, salary > $100,000) I’d highly recommend How to Win the Game of Advanced Personal Finance. At the current price of $500, it’s a no-brainer investment.
If you currently have consumer debt, make less than $100,000, or love to control every aspect of your finances, then instead I’d save your money and pick up Ramit’s book instead.
At the time of this writing, the course is not open, and unfortunately, they don’t have a waitlist to sign-up for notifications. Hopefully, they’ll open it up again soon.
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Photo Credit: Pulp Fiction
How to Win the Game of Advanced Personal Finance
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