Why Giving Away $1,001 is Brilliant

by Nate St. Pierre on April 16, 2012

So there’s this guy named Ramit, who runs a business called I Will Teach You to be Rich. Subtle he is not. If you’re anywhere near the personal finance niche, you know who he is. And if you’re not, you may have heard of him through his appearances on many of the major news networks, the Wall Street Journal, etc. etc.

One week from today, he’s going to be giving a personal check for $1,001 to one person, and anyone can request a chance to get it. I know Ramit’s stuff, so I can tell you it’s totally legit – he will give this money with no strings attached. I’ll tell you why in a minute, but first check out the offer here: How Would You Spend $1,000?

On the surface it’s billed as a social experiment to see what you would do with the extra $1,000, and that is true. He may want to prove one of his points – that getting a big tax refund at the end of the year is actually a good thing, because of the psychology of money: many people will apply a big “free money” bonus towards paying down debt or something equally profitable, as opposed to spending it all right away. My thought is that he’ll contend that most people, if they take advice telling them not to give the government their money “on loan” throughout the year, would just spend the extra $83 per month without even thinking about it, and not use it wisely, to pay down debt or whatever. Maybe that’s his point, and maybe not. I’m certainly no financial expert, so we’ll just have to tune in and see what he has to say next week.

What it really is, though (and this is what makes Ramit an evil genius), is a very powerful way to attract a ton of attention and get a ton of new subscribers. He is literally giving away a large sum of money in exchange for people giving him their name and email address. He’s basically paying for a list of qualified leads. And I can tell you that the value he’s going to get from these leads and the accompanying attention for this little experiment is going to be worth way more than $1,000 for him. Way more.

Ramit sells a lot of different informational products, most of which are both valuable and expensive. He also knows how to work a prospect, so once you sign up to get the $1,000, you’ll be on one of his mailing lists, and he’ll talk to you through that, get you comfortable, pique your interest, and then offer you one of his products. I’ll bet if he gets 10 – 20 conversions this little experiment will break even for him in terms of time and money investment, and everything else will be pure profit.

He’ll probably get 182 conversions.

I’m not knocking him at all for this. I think it’s a brilliant strategy, and fits perfectly with his personal brand. I do in fact find him pretty abrasive, and I’m not a fan of his personality, but that doesn’t stop me from following him and listening to him, because he does indeed know his stuff.

And now that bastard’s got me on another one of his email lists, because when I decided to write this post, I figured I should probably sign up for the $1,000 just to see what happens. And you know what happens? He gives you an affiliate code and tells you to share it around, because the more people that sign up under your code, the more chances you have to win the $1,000 for yourself. Sounds suspiciously like the Fast Company Influence Project, which I infamously hijacked two years ago, and then surrendered a day later, after learning a few things.

Ramit is combining the allure of lottery-type money with the influence-peddling tactics of Fast Company, and the result promises to be huge . . . for him.

Well played, sir.

Thanks to Dead Doodles for the brilliant evil genius illustration. Gotta love the internet.

  • Haha!  Excellent.  I agree that Ramit is an evil genius.  I like him, probably because we have a shared Indian heritage and I think he’s funny.  😉

    I would never sign up for any of his lists though, although it’s interesting to hear what happens when you do.

    I totally disagree with the psychology behind the tax refund (although those commenters all seemed to have paid down debt with it).  When I work for my money, I am more likely to save it.  When I get a sudden windfall, I might be more likely to use it for something else like travel.

    I think Ramit appeals to a certain younger, eager, work-hungry crowd.  As a parent (and I’m sure you’ll agree) working less is definitely more.  I can’t imagine taking on more work and being away from my child more often.  And, I think your priorities change as a parent as well.

    Anyway, good stuff you have here Mr. Nate!  I like your style.

    • Yeah, I was invited to lead the kickoff service project for the first-ever FinCon (
      http://www.financialbloggerconference.com/ ) last year with my biz partner J. Money of Budgets Are Sexy fame. The first time I ever saw Ramit was when he was the dude who showed up in a limo. He definitely makes an impression, and I don’t dislike him – just not so much my cup o’ tea (although he does make me laugh). 

      I agree that as a parent your priorities and time allotment definitely shift, and not only that, but you learn so many of the important things in life from them, too: http://itstartswith.us/itstartswithus-is-one-year-old-today/.

      Thanks for stopping by, Mrs. M – and people started calling me Mr. Nate last year, beginning with my cousin Jasmine. I guess it’s stuck. 

      • Ahhhh… the limo thing is very interesting.  Yup, that makes him rather different than myself, since I would never ride in a limo on purpose.  Haha.  

        We’ll be at fincon this year — my husband is a speaker.  Hope to see you there!

        • I’ll go if invited to work it again, if not, you’ll probably have to be content with J. Money’s company.

  • Here’s what I am left with when I think about Ramit. Although it certainly is worth more to him than the $1001 dollars he’s paying out, at the end of the day, do I want to be like him? No thanks. I’ll take authentic, connection-based marketing as a way to build my business over that method any day.

    • A valid point on the personal level, but one could certainly make the argument that no matter the methods Ramit uses to pull people in, at the end of the day he does directly connect and engage with many, many people – no small feat with the popularity he has…

      • I wonder about the motivation though? I agree- he does engage and connect on some level with many of his subscribers, which is why they subscribe. But at the end of the day is the only reason he does something like this to collect names and make money or is it more than a business for him, i.e. a calling? (Full disclosure, I know very little about him so I am not making any judgement calls, just wondering…) And also granting that not everyone wants their business success to be a calling as well. I think for me, it’s just a model though successful, would make me very uncomfortable to employ. But if it suits his business, an excellent use for him.

        • I don’t know much about him, either. Never talked to the man. I suppose we could ask him, yeah? 😉

          I’m not opposed to this model for business use, though I’d definitely shy away from it for all the philanthropy-type work I do.

  • girltaristhan

    There’s a youth project here in Bedford who have just taken on a building in the town centre – I know that $1000/£620ish would make a big difference – that would cover some more expenditure for this month or would be carried forward to next month to help it get off the ground. 
    (I’m in the UK btw so I guess it would be the conversion from USD to GBP) 

    If I had to keep it for myself and not give it away….well I was going to say replace my MacBook but it’s still working so doesn’t entirely need to be replaced and it made me feel a bit selfish because it would take all that money. 

    I’d take my folks, my brother, his girlfriend my hubby and our foster son out to dinner – I know it probably seems like a really little thing (and would have a bunch spare to do something else with) but my parents have been amazing since our foster son came to live with us – they take him at short notice when things don’t quite go to plan. They looked after him for a week in November when me and Chris were on holiday (it was booked before he came to live with us and we needed to make the decision whether he was going to stay with us on a more permanent basis). They’ve helped so much in the last few weeks when life has just been crazy busy. So I’d share it with those I love. 

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