We have a very special guest on this show today. His name is Ramit Sethi and he is a personal finance guru. Ramit is one of the world class performers that Tim Ferris recently profiled in his new book Tools of Titans. Ramit himself is a New York Times best selling author of a book called I Will Teach You To Be Rich, and this is also the name of his company and website where he teaches online courses on how to make money.

Ramit is very interesting because he goes deep into the psychology of consumer behavior, deeper than anyone I’ve ever met before. Ramit normally doesn’t do this type of interview, so we’re really lucky to have him on the podcast. Let’s jump right in. I think you’re going to get a lot of value out of today’s episode.

Jay: Ramit.

Ramit: Hey, Jay.

Jay: How are you?

Ramit: Hey, pretty good. How about you?

Jay: Doing very well. How’s your day going today?

Ramit: Oh, it’s great. How about yours?

Jay: Yeah, it just started, so.

Ramit: Good morning, then.

Jay: Yeah, we’ll see how it goes. Okay, so in the interest of time, why don’t we just get started? Just before we get started, thanks a lot. I really appreciate having you on the show. It’s going to be awesome. We have a great lineup of guests. It’s going to be exciting.

Ramit: Perfect. My pleasure. Can’t wait to do it.

Jay: Here we go. Ramit, thank you so much for being on The Entrepreneurship in Asia podcast. We are very, very excited to have you on the show.

Ramit: Thank you for having me.

Jay: For our audience out here in Asia, and I apologize for them in advance, you are pretty much a household name now in the states, but for our audience out here that may not follow this space, can you give us a little bit of an introduction about your background and how you became such a successful entrepreneur?

Ramit: Sure, and thank you for the introduction. My name is Ramit Sethi. I am the CEO and author of I Will Teach You To Be Rich. Started off writing about personal finance when I was in college. I was studying technology and psychology at Stanford, and I noticed that a bunch of my friends would complain about overdraft fees and I also had taken some of my college scholarship money and I had invested it in the stock market with very bad results. I started learning about money, learning about psychology, and I ended up trying to teach people informally at Stanford. Nobody really wanted to come learn about money. I started a blog. The blog ended up doing pretty well, and I wrote a book, which became an instant New York Times Bestseller, and since then have grown the business to over a million readers a month. We focus on all different parts of a rich life, so everything from personal finance to entrepreneurship, psychology, even food, every different part of a rich life that you can imagine and we create video courses, where we also give away 98% of our material for free.

Jay: Wow. That’s quite a introduction and I want to dig a little big deeper. I obviously, I follow you. I’m a big fan of your work and I really, really enjoy and appreciate some of the work that you do, especially when you, you go into a lot of the psychology behind business consumer behavior marketing. I think that, the deep dive approach that you take is quite novel, and not a lot of people in this day and age go that deep.

Ramit: Thank you.

Jay: Stepping back a bit though, one of the topics we like to discuss on this show is the entrepreneurial path at the very beginning. You said you went to Stanford, you dabbled in the stock market, lost some money, got interested in personal finance. You also said that, I know in the past, following you, that you worked at a traditional startup at one point, but then you switched from going the venture backed route to going, bootstrapping and going the nontraditional way. Why did you make that switch, and for people that are out there thinking that venture backed is the only way to start businesses, what do you have to say to that?

Ramit: There’s a big world outside of venture backed businesses. I had the privilege of co-founding a startup with a couple of other friends, and we did go the Silicon Valley venture capital route. We raised several million dollars in venture capital and angel funding, and we were creating an online collaboration software company. Venture capital can be a great tool when deployed correctly. There are a few criteria for when you want to raise money. I think this is a big distinction for entrepreneurs. If you are entering a novel market, if you are entering a market particularly where winner takes all, where you need to grow fast, then venture capital makes a lot of sense. Also, if you’re entering a market where you can have an exit one day, that would be either being acquired or IPO.

Most entrepreneurs who dream about raising money, really just want someone to write them a big, fat check so they don’t have to do a lot of hard work. That’s the honest truth. That’s because most entrepreneurs are not starting a venture backable business. Just think about it, if you’re going to raise one, two, three, four, five million dollars or more, those investors are not stupid. They want their money back in multiples. That means you need to either get acquired, or you need to IPO. Most entrepreneurs are not sitting around saying, “Okay, here’s my model to get to 50 employees, and 200, and here’s the competitors that could potentially acquire me.” Most entrepreneurs at the beginning stages are just like, “I don’t have an idea, and I wish someone would just give me money, because it would make me feel good, and it would tell me I’m on the right path.

That’s not an entrepreneur. You can go the venture backed route. That can make a lot of sense. We did that. Many entrepreneurs have done that successfully. You can go the bootstrapped route, which I’ve done as well, and basically fund your growth through revenue. You should be clear about which type of business you are, and if you’re not sure, you can just Google, “Should I raise venture capital?” There’s a million great sites out there. That would be step number one.

Jay: Okay, sound advice. Then along your entrepreneurial journey early on, so here’s another topic that we like to discuss on the show. Being, I’m Asian and the audience is hopefully predominantly Asian that this podcast will reach, my parents were first generation immigrants into the US, and I know you talk about your parents a lot in your work. I think it’s hilarious.

Ramit: Thank you.

Jay: It’s one of the things that drew me to your work in the beginning. You and I both know that when it comes to first generation immigrant parents, there’s no negotiation, particularly when it comes to career.

Ramit: That’s right.

Jay: If I were to tell my parents back in the day, “Hey, you know what? I’m going to go join a startup in Silicon Valley, or I’m going to go bootstrap and do my own online business,” they probably would have said, “Okay, change your last name, because you’re not part of this family anymore.” How was that experience with you and your parents, and how supportive were they of your entrepreneurial desires?

Ramit: I love talking to the Asian market or to listeners in Asia or of Asian background because there’s just so many commonalities. Just with any immigrant background, like my parents were both from India. My dad went back to India, met my mom, seven days later was married. She flew here, flew to the US for the first time, and they raised a pretty large family here. That’s not easy. I don’t know if I could do that. I was very fortunate to have been born here, and been born with dual set of values, eastern and western. That’s one of the reasons that I think a lot of people from different countries really resonate with the work that we do, and that is because we talk a lot about discipline and deep work, and truly going deeper than you ever thought possible.

That’s an unpopular opinion these days. Everybody wants to know five ways to make a million dollars. I just refuse to do that. I think that you’re going to have to sweat. You’re going to have to do a lot, years and years of hard work. You can make a million dollars. That’s not the problem, but you will have to work harder than anyone else. I’ve become accustomed to that. I’ve been working very hard for a long time, and so have the students who are very successful.

To your question about parents, this is an interesting one. I actually love talking about this because there’s a common feeling among immigrant children, particular Asian people that their parents are risk averse and they don’t want to be disowned and I get it. I totally get it.

Let me tell you my experience. First of all, my parents were, I guess you could say they’re pretty liberal as Indian parents go, but they’re still Indian parents. Liberal as Indian parents go is like 10 times more conservative than a American parent.

Jay: Right.

Ramit: Let’s just start there. There’s a couple things they told me that I think were unusual. When I was a kid, my parents used to tell us if we had some idea, they would say, “Why don’t you just write that up? Why don’t you just write that up and send it to the newspaper?” I don’t really know where they came up with that, because they’re not writers, but they just encouraged us to try to share our ideas. That, I think that was unusual.

The other thing they did, which was pretty typical I think of Indians and Asian people, is they took us to the library every weekend. Basically all Saturdays we were in the library. Now, I think they taught us a love of reading, but I also learned that, we grew up for part of our lives in Phoenix, Arizona, and my mom didn’t want to turn on the air conditioner because it was too expensive, so the library has free AC, which is why she took us there. We’d check out 20, 25 books a week and just blaze through those. I think there’s a lot of value in learning a love of reading, like a true love.

Somebody asked, I posted this picture on Instagram of a few books I had read over vacation. I think it was 8 or 10 books, and there were all these crazy questions about, “What’s your speed reading technique?” I thought that was very typical. People want to often know a trick or a hack. The answer is I’ve been reading more than two books a week for over 30 years. That’s the trick.

My parents started out, my dad is an engineer, no surprise. He wanted me to be an engineer. I don’t really have the mind for it. I’ve tried, I just, since I was a kid I didn’t love Legos. I’m not good at directions, etc. and so he encouraged me to do it, but by the time I got to Stanford, I had already had a number of jobs. I’ve gotten into a pretty good school. I was getting good grades. That earned me the right to be a little bit more flexible. I think that’s an important point. You have sometimes kids who want to rebel, or they want to try something totally different. That’s okay, but you earn the right to do that. If you’re sitting around with getting Cs and you tell Mom and Dad, “I want to be a guitar player,” Mom and Dad should slap you in the face. You haven’t earned the right to do it.

Jay: That’s true.

Ramit: Get As, and then maybe you can talk about.

Jay: Yeah, totally. Totally.

Ramit: I think that’s important. I don’t resonate with people who are like, “Leave me alone, Mom and Dad.” It’s like, grow up. If you want to do something different, that’s fine, but you first got to play the game. The game means, you need to have the discipline to get As, right? It’s not that hard. Do the work.

Jay: Yeah, totally.

Ramit: By the time I took a different route than most of my peers who were going to work at Google, or management consulting, or banking, I had a pretty good GPA. I had worked hard, and I have to say that they were surprisingly supportive. I actually had an offer from Google and I turned it down, and I remember my Dad. We talked on the phone and at that time Google was in the newspaper every single day. It was super hot, IPO, and all he said to me was, “Are you sure you don’t want to go to Google? They’re in the newspaper all the time.” I just said, “You know what? I don’t think so.” I got a lot of advice, and I had asked his advice as well, which I really valued. I said, “If I want to go back, I think I can, but right now I want to try this early on in life.”

I think what I’ve learned from a lot of people writing me, because I get a lot of Indian and Asian people writing me about their parents, and they’re concerned about that one conversation. “What should I say to Mom and Dad?” Really, what matters is what have you done for the months and years before? Have you proven that you can disciplined in your schoolwork, or in your job, or in saving money? Have you proven that you’re responsible, that you have good values, that you visit your family? If you’ve done all those things, the conversation itself is largely immaterial, but what that really means is you need to have done the work before you go in for that conversation.

Jay: Right. Yeah, that’s so true. It’s kind of like, doing the work in school is almost like your first job. When you prove yourself by doing well there, then it gives you a little bit more room to negotiate. That’s awesome. Thanks for sharing that. That’s really interesting, and I think it’ll resonate with a lot of the audience here.

You talk about the hard work and that being part of being an entrepreneur, and so I want to switch gears a little bit and I want to ask you, since you are fully in at the forefront of this online business creation and you’ve bene doing it for a long, long time, I feel like everywhere I turn right now I see people talking about selling a course on how to make, build an online business, or … It’s either that or they’re on Instagram flashing selfies of how [inaudible 00:14:39] their lifestyle is, and they’re actually getting paid for it, somehow. Or I don’t know if they are, but you hear about the ones that are.

In my mind, I see all the signs of peak bubble, or peak email building list, online business bubble. As someone who has been there early on, I think you’re one of the early adopters of online businesses, building a blog, building that email list, and really being successful with it. How do you feel about the state of the union, so to speak? Are we at that peak online business? Do we have to be scared about a shift here? What do you think is going on?

Ramit: I’ve watched it happen. I started my blog in 2004, and I’ve been writing ever since then. Every one of my posts, you can go back. They’re all there. You can see a progression from posts that weren’t that good, to now we’ve gotten a lot better and more sophisticated. First of all, I welcome more and more entrepreneurs, online and offline. I think it’s an amazing opportunity. For the first time in our life, we don’t have to wait for gatekeepers. We don’t have to wait for the Today Show to call us, or some New York book publisher. We can go straight to the market, and we can create amazing material. I think that’s incredible. You don’t even need to wait for funding. You can do it with less than 100 bucks.

Jay: Right.

Ramit: At the same time, I have watched many, many people come and become engulfed in this very materialistic world of creating low value courses that are me too copy cats and basically promising the world. Although they wouldn’t admit it, they are effectively promoting the idea of get rich quick. “Do this Pinterest nonsense or set up this Facebook page using this weird webinar thing, and you’ll make a ton of money and you can look as cool as I do.” I have zero tolerance for it.

I believe that in a world of infinite noise, quality always wins. I can tell you this from my own shopping behavior. I was raised with a very frugal family, and we ate out probably once a month, maybe. It would be, we would go eat pizza to a place that we had coupon for. We had one cook for the whole family, and you know what I mean? It was a very frugal family. I’m really thankful for that. Now, I am not as frugal. I am still very frugal, but I also spend money for value, on things that I really care about.

I can tell you that when I am ready to purchase something, it could be a leather jacket, it could be an iron, because I love to iron my clothes, whatever it may be, I’m willing to pay for it. I’m willing to pay a lot, and there are a lot of people out there where money is not their primary concern. In other words, if I want an iron, I want the best iron. I don’t care what it costs.

The same thing is true for business. When people come to us, we are never the cheapest. You can find courses that are 1/10, or even 1/100 of the price of our material, but when people are ready for the best they come to us. You can find that in any market. I just saw, you would not believe it, I saw Nieman Marcus was selling $66 collard greens. It’s just a simple vegetable that normally costs $2.

Jay: No way.

Ramit: He sold out. who is buy? I just saw a $290 candle. Who’s buying it? It’s not stupid people. There’s a reason, and then of course when it comes to investing in myself through online education or ongoing education, I’ll pay anything. I think in a world of infinite noise where there are just millions of courses, if you can create the best, whether you are a guitar player, whether you’re teaching people how to use Excel, or you’re an interior decorator, if you are the best, you will always have customers trying to kick down your door. If you are like everyone else, then your business is in great peril.

Jay: Right. Yeah, I think, there’s just such a flood of content and all of these junior players out there, and I guess competition though, as you said, should be welcomed. It’ll just elevate your game if you’re truly great.

Ramit, you, about 10 years ago you wrote a New York Times bestselling book called I Will Teach You To Be Rich. You’ve then since parlayed that into your brand basically, which is a entire suite, course offerings, classes and masterminds, video content and whatnot. How did you, your initial book was about personal finance. Then now you’ve expanded that into basically, I Will Teach You To Be Rich, and you talk about living a rich life. How has that changed, how has the term rich changed from personal finance and just getting rich, period, to the broader scope for covering all the offerings that you provide on your platform?

Ramit: I’ll tell you what, when I started writing this blog in 2004, and today, I never woke up in the morning and said, “Yeah, personal finance. This is awesome, man.” That doesn’t get me going, but living a rich life and helping millions of other people, that does. I started writing about, I Will Teach You To Be Rich, and I said from day one, “Money is important, but it’s just a small part of living a rich life.” I’ve said that since day one, and I really believe it. I do believe that you need to get your money in order, because it allows you to do so many other things. It’s very hard to be remarkable. It’s very hard to be successful, whatever your definition of that is, if you have money problems.

I also believe that rich is however you define it. Some people are like, “You know what? I want to buy a thousand dollar jacket.” That’s awesome. Other people say, “I want to pay for my parents’ retirement,” which is very common, particularly for my Asian readers. They totally resonate with that. Other people say, “I want to travel. I want this. I want that.” That’s up to you.

I think that was a big surprise for people when they first started reading, because typically people tell you all the things you can’t do with your money. They’re very judgmental, they tell you to save every penny, and I don’t believe in that. I believe you should spend extravagantly on the things you love. In the early days I articulated this vision to people. It doesn’t resonate with everyone. A large audience that says, “You’re stupid.” A lot of people say, “You’re stupid. You’re shallow, and materialistic.” That’s okay. If they want to save tons and tons of percent of their income, and in my opinion, hoard it away for a some day, that’s okay. That’s not my market. There’s a much bigger, different market out there.

Once the money part is taken care of, once your money is automated, and like I spend less than one hour per month on my money, then you have a … What else do you do then? You don’t just sit around and count the dollar bills. You’ve got to do something. Now it’s like, wow, what’s the next step? A lot of people start to realize, “Oh my God. I need more meaning than just dollar signs. I want to get physically fit. I want to look amazing. I want to learn how to cook. I want to start a business.” We knew this. We know a lot of people who are in exactly this situation. That’s why we started moving beyond just money, which is a small but important part of a rich life, and we started talking about other things as well.

Jay: That’s awesome. Yeah, you have so many different verticals now, and it’s really just a plethora of offerings. Like you say, you give 98% of your content basically away for free. I know that firsthand, because I’ve consumed years and years of it.

Ramit: Awesome.

Jay: Thank you for that.

Ramit: You got it.

Jay: Thank you for that. Let’s dig a little bit deeper. Let’s talk, just quick tactics now. Let’s say I’m Joe Schmoe or Joe Chang, or Kim Working, working at a job that I don’t like and I really want to do something else, but I’m not sure because my Asian parents are frightful that I can’t approach them and say that I want to do something else because I’m supposed to be a doctor, and so I start looking around and I’m thinking about doing a side hustle. What’s the first thing that this person should do and what courses or products at your, I Will Teach You To Be Rich can help them guide them in their initial step?

Ramit: First I want to talk about the parenting because I think that’s actually the most important. If you are concerned that your parents would not approve or would raise a bunch of doubts, I think it’s important to tackle it head on, but in a different way that what most people would tell you. Most people, they get themselves riled up and then they go have this really big conversation with their parents where they just lay it on the line. I just think that’s the worst approach, because your parents are, they don’t understand the context of where you’re coming from, so they’re just going to fight back.

I actually like to take a judo approach, and this is something I would try. You can go to your parents and say, “You know what? Mom, Dad, I’ve been thinking about doing something different after [inaudible 00:24:41]. I’ve been reading a lot about all these entrepreneurs. You’ve heard about Mark Zuckerberg, but there’s also people who are running these businesses on the side, and it’s something that I’m curious about. What do you think?” Here you’re using almost a judo technique. Instead of confronting them and telling them what you’re going to do, you’re actually asking them for advice.

Now let’s say they say, “That’s a horrible idea. Here are five reasons you should be spending all your time saving your retirement money and sending it back to your family, [inaudible 00:25:15].” “Okay, so you know what? I really respect your opinion. Thank you. I’m going to think about it, and I really value what you told me.” You do. You are listening. You’re taking notes. Now you may decide, hey, my parents are right. I don’t want to do that.

If you have this feeling in the back of your head when you go home that night, and you say, “You know what? I’m going to do this anyway,” then you go back to your parents. You say, “You know Mom, Dad, I listened to what you told me. I thought a lot about it and did a lot of research, and the way I see it is I’m young, I have the chance to do this. I might fail. I think you’re right. I might actually fail, but the worst case is I still have my job, and I still have a long life ahead of me. What I want to do is try a new opportunity, still have my job, still be stable, but try something. I just think, what’s the worst that could happen?” That’s it. In other words, you were listening, you’re being reasonable, you’re not going in there guns blazing. I think that’s number one, so just getting straight with your parents. I just, I respect my parents and I know everyone listening respects yours. I think that’s important.

The next thing is, you should do a lot of research on a variety of different people. You should find somebody you trust. If it’s me, great. I welcome that, and I would love to help you. There’s a great program we have called Earn 1K, Earn 1K. That’s if you want to start something on the side. You can go to Earn1K.com to learn more about that and get a bunch of free stuff as well. We also have an entire site for online business, GrowthLab.com, GrowthLab.com. That’s for online business. You should do your research. You should sign up for a few email lists. See who you like. See how you respect. I read from a lot of different sources, but when I find someone I really love and trust, then I will devour everything they have to offer.

Jay: Right.

Ramit: I’ll pay any mount to learn from that. That’s how I approach.

Jay: Yeah, I’m the same way as well. Earn 1K is your side hustle course, how you can do something on the side, earn an extra grand here or there, maybe every month or every year. Then Growth Lab is your, is that a higher end course now?

Ramit: Okay, good question. Earn 1K, we actually have a bunch of students earning hundreds of thousands of dollars on the side. It’s funny, when we told … We were testing it. We do a lot of testing internally, and when we were testing calling it Earn 10K, and it turns out a lot of people can’t imagine earning $10,000 more on the side. They just don’t believe it. We actually had to undersell, which is crazy.

Jay: Very interesting.

Ramit: Yeah, that’s on the side. Growth Lab is a new brand we launched, which is all about online business. We have different products in there, like Zero to Launch, that’s starting an online business. We got a copyrighting product in there. We have a whole bunch of stuff.

Jay: Okay, got. Yeah, Zero to Launch is your premium one. I’ve seen some of your stuff there, which is really, really good.

Ramit: Thanks.

Jay: Okay, so Growth Lab. Okay, listen, we got to look to wrap up here. We really appreciate your time and had a great time talking to you. Just two final questions. The first one is, what is your final piece of advice for any young aspiring entrepreneur that you would give right now that either is in the process or wants to start the process of becoming an entrepreneur, what would you tell them?

Ramit: I got a great piece of advice from one of our students, and she was very, very successful, and I brought her into our studio to interview her. She had gone through all the classic doubts, and she was actually Asian. She had Asian parents, and she went through everything. “My parents are going to disown me. I work in finance. I get paid a lot. I don’t want to switch to something risky.” She went through all those things, self doubt. She finally started using what we taught her and she ended up working at an amazing startup doing very well financially, and most importantly, she just loved what she did.

I asked her, I said, “What would you recommend to other people?” One of the things she said, I’ll never forget, she said, “Get impatient with yourself. Stop waiting around. You would never allow someone else who came to you for advice to give you all these BS excuses. Whatever. If someone wanted to get a better grade, or they wanted to change the way they look, you would never let them get away with these BS excuses, but so often we let ourselves do it.” She said, “Get impatient with yourself. You should be moving heaven and earth to accomplish whatever you want. You want to start a business? Fine. You don’t have an idea? That’s okay. There are places to learn it. You could learn it from Growth Lab, you could learn it from your friend. It doesn’t matter. Get impatient. Don’t wait a year, definitely don’t wait 5 or 20 years like so many people we know. Start today. Put time on your calendar and get impatient with yourself.”

Jay: That’s great advice. Okay, last question is where can people find you, follow you, and is there anything that you’re working on right now, particularly in addition to Earn 1K and Growth Lab that you would want to point the audience to?

Ramit: Yes, thanks for asking. I’m on Twitter, Twitter.com/ramit. That’s R-A-M-I-T. I’m on Instagram, same username. My site, IWillTeachYouToBeRich.com, and if you’re interested in online business, GrowthLab.com. Now, one favor, I’d love to hear from anybody who goes to Growth Lab, you read those articles. Tell me the number one article you want me to write. I’m looking for some amazing new ideas for top quality, incredible content. I’ve set aside a ton of time on my calendar, so just email me, Ramit.Sethi@IWillTeachYouToBeRich.com. I would love to know anything you want to know about online business, and I’ll try to write it up for you on Growth Lab.

Jay: Okay, email Ramit and just so you guys know, Ramit reads every single one of his emails. I know that for a fact.

Ramit: That is true.

Jay: He has, how many emails? You probably have 500,000?

Ramit: We send out several million emails a week, and I get over 2,000 emails a day, and I read every single one.

Jay: Amazing. There you go, open invitation from the man himself.

Ramit: That’s right.

Jay: Email Ramit. Thank you so much Ramit, for your time. It was awesome having you on the show, and we really appreciate all the advice that you gave.

Ramit: You got it. My pleasure.

Jay: I hope our audience enjoys it.

Ramit: Great questions. Thanks a lot.

Jay: All right, take care.

Ramit: Bye.