NEW YORK — Ramit Sethi, the brash personal finance guru who turned heads with his no-nonsense book I Will Teach You to Be Rich, has been making waves again with his blueprint for building a million-dollar net worth by age 40. On April 16, 2025, Sethi laid out his “6 Steps to Become a Millionaire by 40” in a detailed segment on his website, ramitsethi.com, drawing thousands of clicks and sparking heated debates in financial circles. The steps, grounded in years of Sethi’s coaching and data from wealth-building studies, aren’t flashy promises—they’re a grind, demanding focus and a willingness to rethink how you handle cash.
First, Sethi hammers on starting early. He points to compound interest as the backbone, citing a 2023 Vanguard report showing that investing $10,000 at age 25 in a low-cost index fund at 7% annual return could hit $149,744 by 65. Waiting until 35? That same investment limps to $76,598. The math doesn’t lie: time is the millionaire’s best friend. Step two is brutal in its simplicity—live below your means. Sethi’s not preaching rice and beans; he’s talking about cutting fat from budgets, like $200 monthly subscriptions or impulse buys that bleed savings dry.
Step three pushes aggressive investing. Sethi leans on 401(k)s and IRAs, maxing out contributions to dodge taxes and fuel growth. IRS rules for 2025 allow $24,000 in 401(k) contributions and $7,500 in IRAs for those under 50. He cites Fidelity’s 2024 data: millionaires average 15% of their income invested annually. Step four is earning more, not just saving. Sethi urges side hustles or salary negotiations, noting a 2024 Bureau of Labor Statistics report that workers who switched jobs saw 5.2% wage hikes versus 3.8% for those who stayed put.
The fifth step is automation. Sethi’s website details setting up auto-transfers to savings and investments to kill temptation. A 2024 Charles Schwab survey found 68% of Americans with automated savings stuck to their goals versus 42% without. Finally, step six is staying the course. Market dips, like the 2022 S&P 500’s 18% drop, test nerves, but Sethi cites historical data: the index has returned 10% annually since 1926. Patience pays.
Sethi’s plan isn’t new, but its clarity cuts through the noise. His April 2025 update tweaked the steps for inflation and rising interest rates, reflecting Federal Reserve data showing 3.1% inflation in March 2025. No get-rich-quick schemes here—just a slog that demands discipline. Critics call it unrealistic for low earners; supporters say it’s a wake-up call. Either way, Sethi’s six steps are now a cornerstone of his brand, preached to millions via his newsletter and podcast.
The numbers speak for themselves: 401(k) millionaires hit 485,000 in Q4 2024, per Fidelity. Sethi’s steps aim to swell that rank by 2035. Whether it’s doable depends on the reader, but the plan’s logic is ironclad, built on decades of financial data.