Book Review: Rich AF by Vivian Tu

Vivian Tu's Rich AF is an excellent personal finance book written for Gen Z / Gen Alpha. Approachable, easy to understand, actionable tips, and my thoughts on it.

Photo of the book.

This is a book about personal finance. It’s also very 2023. I think. Or 22. I’m also very much not the target demographic when it comes to the tone of the book, but the content? A+! That said in my 40 years on this here planet, this book did not give me many new things that I didn’t already know. Should you still read it? Absolutely! But bear in mind that if you’ve read any other personal finance books, like Ramit Sethi’s I Will Teach You To Be Rich, this one will be very similar for a very good reason: personal finance did not change a lot in the last 10 or so year since Ramit’s book came out.

There is one point that I don’t think Vivian places enough emphasis on, or any of the other books I’ve read. At some point in the investing section she talks about the delta, the difference between money going out as interest due to your debts, and the interest you get from your investments. As long as your investments bring in more income, you should be good. And that is true, with a few very very important caveats, speaking from very personal experience that went the wrong way:

  1. your investments are likely to be variable, and on average over long term they are expected to yield about 4-7% annually. She uses 4% as a conservative number, and 7% as a typical number. And that is true, historically. But year on year it might be 15% one year, and -9% the next. Again she uses these as concrete examples. The issue I have, and the emphasis I’m missing here, is what to do when you would need money to cover things, but your investments are in a -9% year, because
  2. every single investment has a short little blurb disclaimer next to it that roughly says: “past performance is no indication of future performance. You might lose money. Capital at risk.” Investment income, even if projected to be 4% annually, and historically been 7%, is not guaranteed. Your debt’s repayment interest? Super guaranteed, and you will need to pay that, no matter what, unless you managed to negotiate it down or away.

But that’s the only thing I’m personally missing from the book. Here’s what you can look forward to learning:

  1. Know what you earn and how to think about it.
  2. Know where your money goes to, and figure out what’s essential and what are things you can cut back on, and why “stop drinking coffee and having avo toasts so you can buy a house” is bullshit.
  3. How and where and when to save, and why that’s important. Do this once you have a positive budget, ie more money coming in that going out until you hit a comfortable cushion amount, plus how to use these for tax savings where applicable.
  4. What are investments, how do they work, how to get started, what are the options and how to think about this. And crypto is not an option.
  5. Other random life related bits, like credit scores, what they are, how to raise them, what conversations to have regarding finances with your significant other, or someone you’re dating.

I really really like that she layers these on: don’t start saving before you have money to save, which you can figure out if you’ve done your budget and know how much you can save, and if you need to have more income by reducing the outgoings, you can also do that too, as now you know what you can reduce.

I love that she also acknowledges that there’s only so much headway we can do by cutting down costs. There’s probably a really finite amount of wiggle room there. Increasing income is significantly easier most of the time.

It’s also an easy read. Thought I’m not the target demographic, I, a 40 year old man, still found it super entertaining.

Stuff I’ve done as a consequence of reading this book

I’m trying to figure out how to get a detailed one–off credit report from the agencies. Experian in the UK seems to want to have a subscription for this. It’s 22:24 here, so that’s tomorrow’s problem. The free account, which I’ve had for years, shows basic info, including my credit score, and for the most part that’s been enough. I’m curious what else a full credit report can tell me.

I also have an account with Clearscore, which uses Equifax for this, so going to figure that out tomorrow as well.

I raised my credit limit on my main credit card. Turns out I’ve been using a larger percentage of the available credit that the agencies are typically fond of which might earned me some negative points in my score. Higher credit score leads to better future terms when it comes to borrowing, whether car finance or mortgage.

I already had my budget taken care of and updated, and I’m already on track with contributing to pensions, and ISAs, so no new action item was need on those.

To close

If you’re not actively managing your budget, or keeping on top of it, or you’re just winging dealing with money, definitely pick this book up from wherever you get your books. I recommend using your local library (hope they have it already, it’s a pretty new book), or buy it from a local indie store. I’m not your dad though, but do get it.

If you’re young, and just entered the world of work out of school, then 100% absolutely get this and read it. It will be so worth it. I’m also generally a fan of a lot more financial education. I’m glad this book exists.

Cover image by myself.