Ramit Sethi, the best-selling author of “I Will Teach You to Be Rich,” recently shared what he does every December to ensure a rich life. He calls it the annual “rich life review,” and he explains what it covers in several social media posts.
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Essentially, it’s an annual meeting where he looks back at his entire year and plans the next one. The meeting is more than a financial check-up. He also reviews his personal goals and plans important moments for the upcoming year.
Sethi explains this is something people can do whether they’re single or married. Here are some of his top tips to build wealth and plan a happy life at the end of the year.
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Sethi highlighted one important part of the “rich life review,” which is to evaluate your investments from the previous year. He says that if you invested 7% of your income this year, then aim to increase that by 1% next year.
If you do this for the next 20 to 30 years, this strategy could increase your investments by hundreds of thousands of dollars, thanks to the power of compound interest. The Consumer Financial Protection Bureau (CFPB) defines compound interest as an interest you earn on the money you’ve saved and on the interest you’ve earned along the investment.
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The CFPB reports that adding to your principal amount can help you to grow your savings even faster. Sethi’s suggestion of increasing your investing percentage by 1% each year is an approachable way to increase your wealth for your later years. Most people can find ways to increase their investment contributions, and by suggesting 1%, Sethi encourages his viewers to make small changes that can net impressive results.
Having an annual review meeting is more than tracking investments. It’s also so people can make sure they are spending their time in a way that aligns with their values.
In a post on Instagram, Sethi shared his formula for happiness, which is: (Money + Time) x Passion = Happiness.
With this, he encouraged his followers to think of an area of their lives where they’ll spend anything. This question can help show people what their passions truly are, whether it’s buying healthy food, traveling the world, or enjoying a nice car.
Sethi encourages his followers to spend their money and time on the things and experiences they love. By thinking about this question and reviewing goals for the upcoming year, people can be more intentional about how they spend 2025.
