“It’s actually not complicated,” Sethi tells Fortune.
“My entire business, for 21 years, has been showing every day people that you and I can actually get better results than fancy New York City money managers,” he explains.
Sethi’s top tip for getting on the fast track to wealth? Approach your finances with the same self-assurance you feel when you’re nailing it at work or stepping out in your favorite look.
“My advice is, think of another part of life where you are really confident (it could be your fitness or having a great personal style)… Like if you open up your closet, you can see a simple, great outfit. That’s the same way that money works.”
In other words, for Sethi the biggest obstacle people face is thinking that investing is complicated, when in reality the right mindset is to think of it as being as easy as picking out an outfit.
“When money seems so mystical, it seems like these high priests have access to the knowledge, and none of us do, and that is bullshit,” Sethi continues, while adding that in reality the “average investor can actually get better returns than somebody paid a million dollars a year who actually fails to beat the market.”
“I don’t log in and check my accounts every day. I don’t sit and check stocks,” Sethi adds.
“What I do is I create a vision, I put my money [aside], I set it up to go automatically where it needs to go, and then I get the hell out of the spreadsheet.”
Of course, some people have a head start over others. Sethi admits his “middle-class” dad helped him set up an investment account when he was just 14 years old.
“I was taking my money from my job and putting it in. It wasn’t a lot, but just having a dad who even encouraged me to do that was incredible and very lucky.”
Ultimately, that early encouragement gave Sethi the confidence that he says is crucial. While you don’t have to be a teenager to start investing, the 42-year-old makes one point clear: the younger, the better.
“When you’re young, you have one luxury that no one else has, and that is the luxury of time,” he adds. “When it comes to investing, time is one of the most powerful allies to live a rich life and grow your investments. So one of the most important things is to be consistently investing even $50 a month, starting from as young as possible.”
Where would he invest that cash?
“One of the simplest investments that I share with my family when they ask is something called a target date fund,” he explains. “A target date fund is such a simple way to get started investing—you literally pick the fund based on the year that you plan to retire.”
“You pick that fund, you automatically set your account up to send money every month, and it invests for you, and that’s it,” he adds. “You certainly do not have to pick stocks. You just set it up once and forget it. It’s literally easier than brushing your teeth.”
“Timing the market is for suckers,” Sethi insists. “The best thing you can do is treat your investments like a Thanksgiving dinner. Put the turkey in the oven, close it and let it cook for the next 30 years.”
“So I want people to really get aggressive about building up a 12-month emergency fund.”
