Marc Guberti

Thu, Jun 5, 2025, 9:31 AM4 min read

"I Will Teach You To Be Rich" author Ramit Sethi recently shared how you can get ahead of 95% of people in three months. He claims that you don't have to haggle over small expenses or cancel everything fun in your life. He even throws in another caveat that makes it feel more accessible.

"You don't need a six-figure salary," he declared in a recent video.

Sethi proceeded to lay out a blueprint that anyone can use to get more control over their finances and build toward long-term goals. These are the steps you can take.

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Most people claim to know their finances, but Sethi says you can unravel this myth by asking someone how much they spend every month. Knowing the exact number can help you feel better about your finances and know how you can improve.

Sethi suggests reviewing the past three months of your bank account statements and credit card activity and dividing the total expenses by three. That's a good way to gauge how much you spend each month.

You can then use that number as a benchmark and see if you can reduce your expenses. While you can skip coffee, Sethi points at housing as the biggest expense. Downsizing, having a roommate, or moving to a more affordable location are some of the ways to trim this expense.

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Then, commit to investing at least 10% of your paycheck every month. It's okay to start a little lower in the beginning, but you should build up to this number. Finally, setting automatic transfers to your 401(k), Roth IRA, brokerage account, bills, and credit card ensures that you pay yourself first instead of investing what's left after expenses.

Your crossover point refers to the moment when your assets generate enough income to cover your expenses. Once you reach your crossover point, you can retire, but it's not about retirement. Reaching your crossover point gives you more options. You can travel more often, work fewer hours, or take a sabbatical.

Sethi recommends using a retirement calculator to determine how many years it will take to reach your crossover point. A good retirement calculator will let you see how your crossover point will change based on adjustments you make to your monthly portfolio contribution and your expenses. This metric will give you a long-term financial goal that can solidify good financial habits.