3627: Alexa How Can I Get Rich by Fritz Gilbert of The Retirement Manifesto on Smart Money Habits

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[00:00:24] This is Optimal Finance Daily. Alexa, How Can I Get Rich by Fritz Gilbert of The Retirement Manifesto Many people have likely asked, how can I get rich? But how many of them have asked Alexa? I did exactly that recently and her answer blew me away. Turns out Alexa is a personal finance whiz and her advice was as solid as anything I've read over the past decade.

[00:00:53] It was so good. I've decided to share it with you today, along with my comments on her advice. Prepare to be amazed. Alexa, how can I get rich? From time to time, I like to test Alexa's knowledge and the question, how can I get rich, came to my mind as an interesting Alexa experiment. She usually disappoints, but for this one, she was on her game. She gave the best response to any question I've ever asked her.

[00:01:19] I listened to her one minute, 40 second response and asked her the same question again. Then, I asked it a third time after hitting record on my phone. I simply had to capture it, and there was too much to capture as she talked. Recording Alexa? Yes, her response was that good. Alexa answers the question, how can I get rich? To simplify this post, I'll cite every piece of Alexa's answer to how I can get rich in sentence format,

[00:01:47] followed by my thoughts on each of her statements. To hear the entire answer, you'll have to ask her yourself. With that, here we go with a chronological summary of her response. Quote, there is no one guaranteed way to become rich, end quote. I like that she started with a simple disclaimer. No get rich quick schemes here. Little did I know that she was only setting the stage for an in-depth summary of the keys to building wealth. Atta girl, Alexa.

[00:02:18] Quote, the best path to building wealth relies on a combination of expanding your earning potential, spending wisely, avoiding debt, saving money, and investing carefully, end quote. Ah, the three levers of wealth. Maximize earnings, minimize spending, and invest wisely. It would seem that Alexa read part one of my building block series, The Levers of Wealth. I'm honored.

[00:02:45] Quote, becoming wealthy starts by earning good money. You can do this in many ways, going to school, getting a higher education, and joining a high-paying profession, working your way up in a professional trade, or launching a successful small business, among other things, end quote. Ah, I see what she's doing. After introducing the three levers of wealth, she's going to give us a few tips on each one. Alexa's got this answer organized, and her tips are spot on.

[00:03:12] I really like that she included a professional trade in her response. It's a path too often overlooked in our culture. Mike Rowe would be proud. Quote, avoid debt whenever possible, especially credit card debt, which carries a high interest rate. If you do have credit card or other high interest rate debt, pay that down as soon as you can, end quote. Okay, moving on to lever two. Don't spend more than you earn, which is by definition what debt really is.

[00:03:40] She's even smart enough to know that it's wise to pay down your high interest debt as soon as you can. Yep, she's got this personal finance stuff figured out. Quote, as you build your income, focus on saving by living within your means, spending your money carefully, and saving as much as you can, end quote. As my dad once told me, it's simple, though not easy, to become wealthy. Just spend less than you make and do it for a long time. Wise man, my dad. Glad I followed his advice.

[00:04:10] As a lifelong teacher, he must have taught Alexa a few things along the way. Who knew? Quote, put a portion of your income into savings and investments before spending it on other things. A 401k, IRA, or other tax-advantaged plans are also a good way to earn long-term wealth, especially if your employer offers matching contributions, end quote. Sounds like pay yourself first or automate your savings, both solid suggestions.

[00:04:37] Even better, she's aware of the benefits of tax-advantaged plans and the value of getting that free money from your employer. Wow, Alexa, I'm impressed. Quote, make the most of your investments by investing in broad-based low-fee funds like the S&P 500 index funds or targeted retirement funds that invest in a broad portfolio and adjust the balance of stocks and bonds over time to maximize returns while you're young and protect your assets as you get older, end quote.

[00:05:07] Quote, I'm falling in love with Alexa. We have so much in common. Turns out she's a mutual fund fan, just like me. Nothing better than those broad-based low-fee funds for the majority of your savings. Not too many robots I know are aware of the value of low-fee funds. She even mentioned rebalancing. I think I'm in love. Quote, while there's no guarantee that any path will make you wealthy, by following these

[00:05:32] steps, you'll be in the best position to be rich and gain financial independence, end quote. They must have attorneys over there at Alexa land. Gotta end with a disclaimer to avoid being sued. And did she really save financial independence? Wow. Alexa almost stepped into the fire community with that response. She should have made it official and added the retire early. Ah, well, it's the only obvious mistake in her amazing response.

[00:05:58] I know she's only been working for a few years now, but if she follows her own advice, it won't be long until she's able to retire. I wonder what her savings rate is. Great work, Alexa. Conclusion. If anyone argues that understanding personal finance is difficult, just point them to Alexa. In less than two minutes, she provided one of the most concise yet comprehensive answers to the question of, how can I get rich? If Alexa could learn this stuff, anyone can. Now it's a matter of doing it.

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[00:08:23] So I like Alexa's first comment about there not being one guaranteed way to get rich for everyone. In reality, everyone has a unique set of skills, preferences, and circumstances. So if you ask someone else how you can get rich, they're going to be challenged to give you a good answer. Only you can determine the strategy that's going to work best for you because only you see your full picture and all the nuances of your situation. That's why it's important to expose yourself to different strategies

[00:08:51] and pay attention to how other people are building wealth. You're not guaranteed success if you copy them, but you can get ideas of things to try as you chart your own course. But I'm impressed that Alexa outlined the basic crux of personal finance. Increase your income, reduce your expenses, and invest the gap. I think the most surprising part of Alexa's advice for me is the recommendation to invest in low-fee index funds. That's definitely the strategy I follow, but it's an investing preference.

[00:09:20] There are many active investors or real estate investors out there that would argue that their strategy is superior. There is something oddly validating about a robot giving my investing preference a thumbs up. And I couldn't agree more with Fritz's closing remarks here. The basics of personal finance and building wealth are pretty easy to understand, but embracing them and implementing them consistently is the hard part. And that's another edition of Optimal Finance Daily.

[00:09:48] Thank you for listening, and I'll be back tomorrow as usual. So I'll see you there, where your optimal life awaits.