Saving Every Penny? You’re Doing It Wrong

Two people save $1,000 a month: One ends up broke, the other a millionaire. The difference? One understands a simple truth most never figure out. In this video, I’ll show you the 5 steps to build real wealth—so you don’t end up on the wrong side of that equation.

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Ramit Sethi is the host of Netflix’s “How To Get Rich” and New York Times bestselling author of “I Will Teach You To Be Rich” and “Money For Couples”

[Darren_Harper]

The chart at 1:30 has a problem that a lot of charts like it have. The line for investment is not smooth. It will be full of peaks and troughs along the way, it will look more like a mountain range. While it will, on average, reach the place shown here, people should be aware it will not be a smooth ride.

[WealthRulesHQ]

I used to think I was doing everything right—cutting back on little things, obsessively tracking every dollar I saved. But it always felt like I was barely treading water. Then I watched a video (like this one), and it completely flipped my perspective. I realized saving alone was never going to set me free financially.

One moment that stands out: I had $10, 000 sitting in a savings account for years. I was proud of it… until I realized inflation quietly ate away a good chunk of it. No one ever taught me about investing. It felt intimidating, like a world for rich people.

But starting small—opening a Roth IRA, setting up a target date fund, automating things—has changed the game. I'm not rich yet, but for the first time, I feel like I’m building something real.

[The-PassivePath]

If anything, this video was a reminder that playing small doesn’t always look like laziness — sometimes it disguises itself as discipline. Appreciate how you’re reframing wealth-building as something proactive, strategic, and scalable, not just cautious and optimized.

[brycewalburn]

Honestly, this is one of your best videos yet. It's the purest distillation of what people really need to know. This should be required viewing for everyone.

[hrushikeshavachat]

I started a side hustle which was profitable from day 1 (no employee). All income from the side hostel into investments. Today it is around $20000

[Galaxy_squad_Moon]

Interesting.
I think this is an automatic upload, because the shorts I have seen Ramit issue about the tariff chaos in recent days highlight the importance of liquid cash savings!
Not mutually exclusive ideas, but strange to hear both on the same day.

[carystevensky]

Do both - Save up an emergency fund and then invest the rest in index funds, ETFs thereafter.

[Jima]

Safe from tariffs. You need cash for an emergency fund and you can get more interest in a HYSA.

[mhodge]

Yea savings should just be used for emergency funds like unexpected medical bills and expensive car repairs. Also a separate savings account for vacations. That’s it

[justinmirche]

This really hits home. Saving endlessly without a plan for growth can actually hold you back. Loved how you emphasized being intentional with your money

[Ukrainian-woman-of-your-dreams]

Save less. Spend less. Invest more. Have multiple source of income. Work smarter. You shall be financially free.

[animal]

Ramit, I’m a UK citizen working in Saudi Arabia and looking to self-manage my ETF investments. Since I’m a non-resident, I’ve been advised to use offshore platforms like Ardan International with a 0.3% annual fee for the platform and a flat £2, 000 setup fee. Before I commit, I’d love your take—are platforms like this worth the upfront fees, or should I explore other lower-cost, expat-friendly options? Appreciate everything you teach—your advice has already helped me get serious about long-term investing!

[autumneagle]

I have a HYSA at about 4.0% APR. Every month I see the interest get deposited into my bank account. To me that isn't extra money, it's a physical example of what inflation is.

[chlq]

Love you Ramit ❤ good stuff as always 😊

[TulipTreeFinance]

Make sure not just to CONTRIBUTE to your investment accounts. There is an extra step! The contributions land in your account as cash by default. You have to purchase the investments after you contribute! Sometimes you can set this up to happen automatically, too.

[appleztooranges]

I’m learning this at 37. Pissed I just kept saving all my life and didn’t get far

[mysteriosovich]

Good points. The only thing is that many people who invest sometimes lose a lot of money in the process, but those who save, rarely do. There is a reason Warren Buffet (one of the wealthiest people on earth) has so much cash in "savings" (aka treasury bills, etc) at the moment. I think it's best to have a balance- save some and invest some:). Money in a high interest "savings account" also makes you money (above inflation)

[garethwalters]

Love it!!! I've had so many conversations about Savings vs Investments with people, it's such an embedded concept and hard to get people to see the light. And don't get me started on 'my house is my Pension', it's not an investment people!!

[Friendlyfish-pg]

This is weird timing to release this video, Ramit. Your recent emphasis on building a 12 month Emergency fund and your advice to reduce your rate of investment (if needed) to achieve this makes this release seem poorly thought out/timed. *don't come for me, comment section! Yes, I understand the overall message, no, I'm not pushing back on that or the need for investing, and YES I get that increasing your rate of investment while prices are down is an ideal move for those who can *afford* to take the but since saving a 12-month emergency fund takes time, most folks who had been following Ramits normal 3-6 month emergency fund recommendation would not be in a position to invest more vs save more right now.

[jeraldvincentzumel]

Can you make a video for late bloomers? I mean, I'm turning 40 this year and I have a feeling that I am already too late. I badly need some advice.