Ramit Sethi from I Will Teach You to Be Rich introduced his new project today. The Scrooge Strategy is an extension of his recent 30-Day Challenge, during which he urged readers to make meaningful changes to their financial lives.
“I hate most frugality tips,” Sethi writes. Instead, he wants to save big:
Many frugality tips focus on things like saving $10 per month for a huge amount of effort. That’s just not worth it. If I’m going to spend time to change my lifestyle — and eliminate the things I’ve been enjoying for years — I want to save thousands, not a few dollars.
Although Sethi and I disagree on the value of frugality — I think it’s an important part of personal finance — we do agree that bigger is better. If spending $1,000 and eighteen months at night classes can net you an $18,000 salary bump (as I suggest in my contribution to The Scrooge Strategy), that will make a bigger difference to your budget than saving a few cents on your cocoa. Both are good, but one offers a bigger payoff.
The Scrooge Strategy is an experiment for Sethi. It’s a paid subscription-based newsletter offering one new tip per week. “These are tactical tips,” Sethi told me in a phone interview last night. “They’re detailed ways for people to really save money.” To prove his point, Sethi forwarded his first four tips to me:
- Focus on two savings projects at once.
- Conduct a “savings interview” to learn how the successful save money. (I love this idea!)
- Be smart when making big-ticket purchases.
- Practice simple strategies to save money in restaurants.
Although I’ve summarized these tips in a sentence apiece, Sethi’s actual articles offer extensive background on each technique. I have to admit, I’m impressed. These tips are exactly as promised: detailed, tactical, and productive. They’ll help readers save money. I may have to sign up for The Scrooge Strategy myself!
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Frugality is matter of return on investment, not price. Being cheap can be more expensive, very often.
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This sounds so good that I have in fact decided to give it a try. If a $10 investment into solid advice is able to provide me with a return of more than $10 then what do I have to lose?
JD I have a question for you. You have over 70,000 subscribers and run the most popular personal finance blog out there. Have you ever considered a paid subscrition to new bloggers where you teach them about blogging? The reason I ask this is because many established bloggers are earning an extra income from blog coaching and blog consulting. I’m extremely positive that new bloggers would be willing to pay you to learn from you.
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@Studenomics
What an interesting suggestion. I haven’t actually considered a subscription-based blogging course, but maybe I should. At one time, I was writing a “how to blog” ebook, but I never finished it. It might actually be more appropriate for a series of “posts” to a subscription service. Hmmm…
I’ve considered providing “value-added” products to GRS readers, but for now I’d rather focus on doing the blog and producing the book. These two tasks are enough.
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The only problem with the course is that it’s not as scalable as the book. The course if you decided to do coaching/consulting would be more lucrative but not as passive. If you wrote a ebook or set something up a subscribtion service I would be the first one to sign up. Any updates on the production of your book?
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Most people assume that those doing the “frugal tips” are ignoring the big picture.
In many cases, we’ve already covered the big ticket items and career growth–now we’re out to streamline the rest of our consumer habits, too.
All those little changes helped us pay cash for my husband’s PhD (earned at night) which has nearly tripled his salary.
Continuing to save $10/week on produce is simply icing on the cake.
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Are you kidding me? The Scrooge Strategy is $8.00 per week. Why would anyone pay money for someone to tell them how to save money? If you want to save $416 per year, DON’T SUBSCRIBE!
J.D.’s rare inline correction: The actual cost is $8 per month, not per week. Ramit’s proposition is that his tips will save you more than that, and if you’re not satisfied you can get your money back. Sounds like a fine deal to me. On the other hand, blogs are free. I think ultimately, this won’t work for some people, but it will for others.
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Automatic savings has worked for me from the beginning. I don’t really save anything in my checking account (but that’s ok). It makes me prioritize too – do I eat out at a nice place, or go skiing on Saturday? Skiing of course!
AND I manage to save a grand a month. YMMV, which I think is the point
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@Maple
Although you had the number wrong, you brought up a good point. This is a paid service, and I’ve modified the post to indicate this.
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Housing way below your budget and inexpensive reliable cars are the two biggest improvements in personal finance that people can make, or change, right off the bat.
Everything else helps, certainly. If you’re already in good financial shape, it’s more of a hobby and a way of life. If you’re spending way too much on a mortgage and you’re carrying car loans and consumer debt, then all the grocery coupons in the world are not going to do much good.
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We’re you paid to pitch this guy and his website? I wouldn’t pay money for advice like “Be smart when making big-ticket purchases”.
Overall, his advertisement for his strategy felt very greasy and slick to me. It reminded me of those “pay only a percentage of what you owe to the IRS/Credit Card Company” type of things you hear on the radio.
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I dunno, I’ve never been all that impressed with Ramit’s site. He’s clearly very intelligent, but the post quality never even comes close to the quality that you find at other blogs, including GRS. For instance, none of the money saving tips that he posts on his site are particularly novel, and the idea of paying for them (even in greater detail) seems absurd to me. In addition, his attitude is highly pretentious and really bugs me (the whole “from a Stanford graduate” at the end of his site title is one example, but so is his attitude towards people practicing traditional frugality). The whole thing kind of smacks of West Coast aren’t-I-hip-’cause-I-work-in-the valley attitude. I agree with the poster above about not subscribing – there’s equal or better stuff out there (and easily found) for free.
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@elven
Ramit’s advice is much more detailed that “be smart when making big-ticket purchases”. That particular message contains an article equivalent to a GRS post on the subject.
Ramit is one of the oldest and most respected personal finance bloggers around. He’s not a fly-by-night con man. I’ve shared many of his projects at GRS in the past, and even have a section in his upcoming book (as do several other prominent pfbloggers). Ramit is the real deal — he just has a different philosophy than I do. When he asked me to share The Scrooge Strategy, I willingly agreed.
After I agreed, Ramit offered to let me participate in his affiliate program. However, since The Scrooge Strategy seems to be giving people a gitchy feeling (I guarantee that there’s nothing scammy about it!), I’ve dropped the affiliate links.
Bottom line: for some people, this is a great idea. But it may not be a great idea for you.
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I agree with poster 11 and I guess a few others as well–in fact today I unsubscribed to Sethi’s blog after this post. Something felt very off.
It has been my opinion lately that everything Sethi sends me (I invited the send–so no scam there) to my mailbox has been some sort of sales pitch–although a very light polite sales pitch. Maybe I am missing the point–I will take another look or perhaps it just isn’t for me. Not everything can or will be.
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I stopped reading his page a while ago – the continual push to earn more didn’t resonate with me (it’s not how I want to focus my energy), and I feel like he’s pretty disdainful about saving money on a daily basis. And now he wants me to pay him for his ideas? Um, I think I know where I can save eight bucks a month
To be fair, I found some of his writing to be thoughtful, and I’m sure JD is giving his honest opinion of the content of the articles, but I don’t see enough value-add to this to cough up the cash.
If someone does subscribe I’d love to hear a review down the road.
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It’s Ramit (the guy behind iwillteachyoutoberich.com and The Scrooge Strategy).
JD, I really appreciate your post and your comments.
I’m also glad others are leaving comments, too. I definitely agree that it’s unusual to have a paid subscription model in the blogosphere, but it’s something I’m trying out and it seems to be working well for the people that sign up. I tested it for 6 weeks with about 100 people and got really excellent results.
With that said, it’s not for everyone. Some people get just as much out of reading blog posts, forums, etc online. Others get a ton of value out of getting high-quality, tactical posts delivered to them with tons of details in an email (i.e., some of my members already saved $1,000+, making the fee totally worth it), so this is a great choice for them.
I tried to make it easy for people to try it out by offering a guarantee/refund, and so far, people tend to cancel very infrequently.
Again, this may or may not be for you. I’ve just decided to add something new to the mix and deliver (what I think is) really high-quality content in a different format.
If you have any questions, please let me know.
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I LOVE the pig with the dollar-sign snout. What a great logo.
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I won’t be subscribing either. (Sorry, Ramit). Sadly, I don’t earn enough money for his advice to be useful to me — except the point about earning more money, which I already know. I would recommend his site to some of my upwardly mobile friends though.
I have to say the name of the project bugs me. I wouldn’t aspire to be like a character who was rich in financial terms, but poor in every other sense of the word. Correct me if I’m wrong, but didn’t he amass those “riches” by exploiting his workers, refusing to give back to his community and treating others unethically?
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JD,
This post is an insult to GRS readers. Has he offered to pay you for the GRS subscriber’s list yet? Sounds like your are more concerned about the $ than we (the readers of GRS) thought.
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I’d never do that. J.D. is one of the most stand-up bloggers I know, and nothing I could say would make him sell out his blog — nor would I ever try to. He has repeatedly turned down easy money (and lots of it) to build a long-term community that helps people. I’ve done the same on my blog with a different audience. Neither of us has any intention of going for the quick buck.
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@Michael W L
I’m baffled by your comment. How is this an insult to GRS readers? Because I earned $3.20 by pointing to a site of interest?
Ramit has not offered to pay me for my subscriber list, nor would he. Besides, I would never sell it. He asked me to write about his new project, and I did, just as I’ve written about his past projects. Just as I write about many other projects people e-mail me about. The affiliate link was an afterthought, and did not bother me — then or now.
I have no problem with affiliate programs. Judging from the comments last Friday, neither do most of my readers. I’ve used affiliate links since day one at this site, and it has never been an issue. This is not a case of conscience. I’m diligent about not abusing them. I don’t write about an affiliate just for the sake of making money. But if I’m going to link to a site that offers an affiliate program anyhow, I’d be a fool not to include the link.
All the same, as soon as I noticed there was concern over The Scrooge Strategy, I removed the affiliate link. After I had earned a grand total of $3.20.
I’m sorry you feel insulted.
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Hey thanks for always leading us to great sites and information. I love your site!!!
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@ Michael W L,
Don’t say “we”. You speak for no one but yourself.
It looks to me like both JD and Ramit have made it perfectly clear on here “this is not for everyone”. If you have the extra eight bucks a month and want to try it, go for it. If not, to each their own.
I think I will give it a try. With a 60 day money back guarantee, why not?
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I do find it a little ironic that his 2nd to last “tip” was “Stop Being a loser and pay money to save money” and shortly thereafter he launches a pay newsletter!
Seriously though, although I prefer JD’s style to Ramit’s, I do read his blog often, and find some of his content useful. We are all able to make our own decisions, so if you don’t think $8 per month is worth it, don’t sign up- There is nothing wrong with Ramit trying out something that may be new with PF blogs-paid subscriptions-which are very common in other parts of the blogosphere.
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For Michael W L — chill out please. This is all done in good faith and as a service to better peoples lives.
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There are lots of ways that cashflow positive people save money. Keeping a minimum balance in your checking account and money market, for example. You don’t get a lot of interest, but at least you’re not getting docked with fees.
In the summer when my gas bill is low, I pay one lump sum and throw out the next bunch of bills – no time wasted, and no $ on stamps. Likewise, if you don’t have to pay in installments on insurance and the like, you can save the service charges. These are all small things, the privileges that come with living beneath your means. And of course, save up cash to buy a car – no buying a new one until you can do that!
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Anne (#16), I concur the logo is a perfect fit. I am a passive reader at GRS and have received some great tips. This is by far the worst “tip” JD has given. It is irony at its’ best that a PF blog recommends a paid subscription. We can find more beneficial informatino for free. I think JD has reached a low with this post. It’s transparent that he has a conflict of interest. Even if he didn’t, he has lost touch with his readers who are struggling to get their finances straighten out specially with this current economy crisis. To suggest advice at a cost is preposterous. JD, you would’ve NEVER advocated for paid subscriptions for PF advice. Whatever made you change your mind in the recent weeks will hurt the credibility of your blog. How can you advocate frugality with paid advice?
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@ Michael WL & others-
Although I do not know JD personally, I do know that he probably takes greater care not to try to make money off of his readers than he should, certainly much less so than many others. In fact, he probably should use the affiliate link-if his readers look at the sign up page and want to try it out, why shouldn’t he make a small percentage? This is a full time job + for him, and the quality of his posts show how much time he spends crafting his articles. Him talking about this because some of his readers might be interested is no different than him linking to a blog post or a PF related article, site, or magazine (i.e., “paid subscription”) that he thinks his readers might be interested in.
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All this outrage over the idea of paid content is misplaced. We have no problem when authors ask to be paid for a book (even though we can read for free at a library). The fact that so much on the internet is free should not keep someone from feeling their advice is worth money and seeing if the market will support. We are all free to sign up or not but why on earth all this backlash at someone selling their ideas. It is done in other formats all the time.
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Luis wrote: JD, you would’ve NEVER advocated for paid subscriptions for PF advice. Whatever made you change your mind in the recent weeks will hurt the credibility of your blog. How can you advocate frugality with paid advice?
I’ve supported paid financial services in the past. I’ve been a proponent of personal finance magazines, of pay-to-use sites, and more. I think there’s value at to be had from for-fee personal finance advice.
Still, I see your point, Luis.
Kris just came into the room to give me her feedback: “When you write about Leo or Trent or Ramit or your other friends, you lose some of your objectivity. You use a different tone. It’s almost like you’re unintentionally pushing it.”
Hm. Maybe she’s right.
Remember, I’m learning this as I go. And here’s one thing I’ve learned today: when I promote my friends’ work, I need to be more cautious than when I promote the work of a stranger.
On a lighter note, next week is National Thrift Week. Whew. I’m looking forward to sharing some free and frugal tips!
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@ Luis,
I’m sorry but your point makes no sense to me.
“It is irony at its best that a PF blog recommends a paid subscription”?
First of all, I don’t see anywhere that JD “recommended” signing up for this. I see him say he likes it. I see him say he may try it. I see him say it’s not for everyone. I do not see him say “you should sign up for this”.
Second of all, if a PF blog “recommending” a paid subscription is irony at its best, what exactly is a PF book that you have to pay for? What about Money Magazine, The Wallstreet Journal, The Economist or any other PF related magazine/newspaper?
Ramit and JD certainly do not need my or anyones else defense here, the backlash over a simple article just blows my mind.
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You have to be really short sighted if you can not see how paying $8 a month for tips that have the potential to save you exponentially more is not a worthwhile investment. If it’s not, cancel in 60 days and get your money back.
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@JD
Do you push your friends in the PF community more because they are your friends or because you know they have a history of putting out outstanding advice that could be of great interest and benefit to your readers and you know their intentions are in the right place?
I would guess the ladder. You shouldn’t have to apologize for publishing a post because it does not apply to certain readers (Any post on paying for something on a site that pushes frugality will be controversial). You push growing your own garden much harder than you have ever pushed Ramit on us and I have zero interest in starting one. Would you stop writing about that?
Of course not. And I won’t expect you to because although it adds zero value for me, it adds great value to many readers.
You have the success you do from writing quality posts that appeal to and benefit most of your audience. Trust the judgment that has gotten you to this point and keep up the great work.
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I agree with Studenomics. A blog coaching website and/or book is a great way to share your knowledge with others. I would probably pay for that kind of newsletter.
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JD-
On a side note, I do not want to sound ungrateful. You have sparked my interest in learning about PF. You helped me start a ROTH IRA with the excellent information you presented. Overall, 90% of your posts were valuable to me. In this context, this 1 post that seems to me like it is no longer in the interest of your readers, can not make me generalize your intentions.
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I understand that you can get value out of an $8/month service, however how many of these tips do you think you wouldn’t find elsewhere on some other sites, books, etc?
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I have been reading Ramit’s blogs lately and he seems to have some good ideas, Ofcourse who wouldn’t want to make some money giving valuable tips. I have signed up for the scrooge strategy. Lets see if it pay off.
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Hmmm… count me in with the sceptical crowd. While Ramit sometimes has some interesting advice, I do find his writing style rather arrogant and off-putting, a salesman telling you something rather than GRS and The Simple Dollar’s “guy in a bar” chatty, friendly approach (IMHO, anyway).
I would still be tempted, but I frankly found the 30 day challenge to be a waste of time, alternating between the painfully obvious (who, exactly, is trying to save money but didn’t think to buy generic or pack a lunch?) and simply not applicable to me. The thought of paying for what could be similarly useless advice (based on the subjects mentioned by J.D. above) doesn’t appeal to me. The Scrooge Strategy’s website is the final thing that puts me off – it’ looks like one of those horrible sites selling you an eBook on how to win the lottery in 30 days or lose weight while eating cake or something similarly ridiculous.
No offence intended to either Ramit or J.D. here, by the way. You’re both intelligent and focussed guys with a lot to say. But, I do find GRS to be so much more useful, and this really isn’t changing my mind.
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I agree with Kris. I’m sure it’s unintentional that you adopt a different tone, and it’s probably because you think it’s a good idea, and you want your friend to succeed. We’re all naturally predisposed to looking more at the good side of our friends and their work – especially if they are going to read what we have to say about them.
I think it means that people are taking the wrong way what you’re saying. You’ve suggested/promoted similar-ish ideas before from people unconnected to you and whilst lots of people have though the idea not worth the money, they haven’t assumed that you’re doing it to be in for the money.
To me, it feels as if it’s slightly *cool blogger clique*-y and that makes it feel less objective (even though I’m sure that you are giving your honest opinion).
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I’ll point out that JD’s zen mantra is “Do what works for you” (paraphrased). Since there are over 70K RSS subscribers, and 35K unique visitors to this site, I’m going to go out on a limb and suggest that not everyone visiting this PF site is at the same stage of good PF hygiene. Thus, Ramit’s idea may fill a niche for a subset of readers. For some it may work better than JD’s own posting style. For others it wouldn’t provide much benefit.
What JD did was introduce a new program. I remember my article on Motley Fool and their CAPS service taking some heat many, many moons ago. No regrets.
Do what works for you guys.
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I don’t object to paying for content, nor do I think it’s inappropriate for J.D. to write about it. Why shouldn’t writers promote each other’s work if they think it’s worthwhile?
For those of you saying “suck it up and sign up”, I should add that this is a more expensive proposition for people like me who aren’t in the U.S. That $8 is going to go up and down depending on the value of the U.S. dollar, plus we get dinged from our credit card companies for the currency exchange. If I’m going to pay $10-12 a month for something, it had better be good. Ramit’s a great marketer, but his content isn’t “there” yet for me.
For that money, I could purchase a few PF books or several subscriptions to better quality PF magazines instead. (Then I might have a hope of finding something that isn’t exclusively US).
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@ Adrienne: I don’t think it’s the idea of paid material that has people upset. I think it’s a combination of a two things: (i) paying for material that doesn’t seem all that inspired or differentiated (after all, when you buy a book, you expect to get something from it that you couldn’t get anywhere else) from (ii) a blogger who comes across as arrogant and pretentious (see #17, 23, 36).
@ Centsability to Wealth: I think the very fact that JD posts it, and says that he wants to try it himself, is an implied recommendation/endorsement. It doesn’t have to look like the last 10 seconds of a 5 Hour Energy commercial to seem like an endorsement of some sort.
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Paying for quality financial advice is an investment. But the key word is *quality*. I like Ramit and I like his blog, however his 30-day challenge may have offered me 3-4?? usable tips..at best. Having seen that, I can’t see paying for the same advice that can’t be applied to my situation. At the same time, giving Ramit the benefit of the doubt, he’s not just targeting me and my situation either. I praise his efforts to better the community.
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JD, I think the reason you’re experiencing some unexpected backlash might be related to another recent post of yours regarding “selling out” and writing advertorials. You professed to be against the idea, and that appeared to be the end of it, yet here we have a post with a suspiciously “infomercial-esque” feel to it. Of course, I’m a long-time reader and I don’t believe for a second that this is any kind of paid placement, I’m just pointing out that this could be a reason for the cynicism coming from some of the other readers.
On the other hand, you wrote a glowing review about Ramit’s newsletter, yet here’s the million-dollar question: Have *you* subscribed? If not, why not? Couldn’t that be seen as somewhat hypocritical?
And finally, since people really value your advice (and for good reason), do you really, truly believe that someone seeking to improve their financial status would be better off sending $96/year for a short, monthly newsletter from one guy, as opposed to spending that same money on, say, 3 subscriptions to Money magazine, which has far more content and is sourced by dozens of professionals instead of a lone blogger?
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Why pay $8/month when there are so many places to get the same information for free? Think of how many whole finance books you can buy in exchange for 12 tips (if you don’t go to the library).
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JD,
I’m Sorry for the negative tone of my earlier post. I have been a big fan of your site for a long time. One of the reasons why I enjoy your site so much is because I can relate to you and your financial struggles/achievements. You are a tremendous advocate for the average person’s financial well-being. You’ve always been great about throwing different products (some that cost $, some that don’t) out there, giving us your honest perspective and letting us make our own decisions. I’ve never felt like you were trying to sway me one way or another. Thank you for disclosing great products from other sites that I may have never seen without visiting your site.
@ Ramit, I wish you much success with your frugality tips.
@ Centsability to Wealth, I am sorry that I tried to speak for the GRS masses. My post was my view only, no one else’s.
@ Kevin (post 43) – excellent post
JD, Keep up the great website.
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most frugal tips are pretty much common knowledge. if you think about money, you should be able to. budget, set goals, think about purchases, emergency fund, etc. etc.
when ramit ran that 30-day whatever challenge, i also thought the emails i got when i signed up (to the 30-day…) were weird… and spam-ish in nature. i didn’t find value in any of the 30 tips he posted then, that i recall, so i definitely won’t be signing up for this.
personal finance (besides investing…) is 98% common sense.
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As a long time reader of this blog I want to warn readers to watch out, this seems a little fishy…look what I found on Ramit’s site.
Contributors include millionaires, famous personal-finance bloggers, and Harvard MBAs
I’ve put together a dazzling panel of contributors. I’ll continue sending my own personal-finance tips, but by signing up, you’ll also receive tips from J.D. Roth (who blogs at Get Rich Slowly),
It seems that there is a conflict of interest in this post. JD is pushing the Scrooge strategy since he will be a contributor. I highly doubt that will be done for free with all the money Ramit expects to earn on from this venture.
This is the line that sends warning bells off for me…JD says…
“I may have to sign up for The Scrooge Strategy myself!”
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@Watchout
I am not pushing The Scrooge Strategy because I’ll be a contributor. Ramit asked for one article, which I provided in November. He has not asked for more. No money changed hands.
If there is a conflict of interest in this post, it is, as I mentioned earlier, because it’s a friend’s project. You’re right that the last line is over the top, and I regret it. It’s more from being a lazy writer than anything else. (“This post doesn’t end well…how can I punch it up?”) It’s a mistake. I may sign up for The Scrooge Strategy, but as my wife pointed out before, it comes across like I’m shilling for Ramit.
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Why is everyone upset that Ramit is trying to make some money through advice? That’s what this business is all about. He’s trying a different model for revenue, but with ad moneys on the decline, there’s nothing wrong with asking for subscriptions. JD is totally within his bounds to tell us about a new resource; if it’a a helpful service, it’s actually his JOB to pass along the tip.
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I think it comes off a bit pitchy, but whatever. If you like reading this sort of thing then go for it. If on the fence, save some cash and get a subscription to Money magazine for 10 bucks a year.
Really most of these blogs have some good general advice but aren’t going to make you rich. They are fun to read, however, and help to remind us all of a general philosophy we should maintain in order to become wealthy in time. Really if the only post every day was try to save money, invest as much as you can and try to earn more they would be worth the time. The occasional post on making jam, packing a lunch or where you can make an extra quarter of a percent on a money market are filler. Edit – I do enjoy the book reviews.
Just get an rss feed set up and read all of these during your morning coffee and enjoy.
Go bears!
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