RVM gem permissions error - ruby-on-rails

Question

I started trying to set up a local rails installation for development. After I installed in using apt-get, however, I learned about RVM, so I removed the earlier one, and reinstalled from RVM. It looks like I have residual problems, though. Specifically, when I try to install rails I get...
$ gem install rails
ERROR: While executing gem ... (Gem::FilePermissionError)
You don't have write permissions into the /var/lib/gems/1.9.1 directory.
This already looks like a problem, because I don't want it to be in the /var/ directory, I want it to be in the user directory. So, I check the following...
$ gem env
RubyGems Environment:
- RUBYGEMS VERSION: 1.8.11
- RUBY VERSION: 1.9.3 (2011-10-30 patchlevel 0) [x86_64-linux]
- INSTALLATION DIRECTORY: /var/lib/gems/1.9.1
- RUBY EXECUTABLE: /usr/bin/ruby1.9.1
- EXECUTABLE DIRECTORY: /usr/local/bin
- RUBYGEMS PLATFORMS:
- ruby
- x86_64-linux
- GEM PATHS:
- /var/lib/gems/1.9.1
- /home/myusername/.gem/ruby/1.9.1
- GEM CONFIGURATION:
- :update_sources => true
- :verbose => true
- :benchmark => false
- :backtrace => false
- :bulk_threshold => 1000
- REMOTE SOURCES:
- http://rubygems.org/
As well as sudo'd:
$ sudo gem env
RubyGems Environment:
- RUBYGEMS VERSION: 1.8.11
- RUBY VERSION: 1.9.3 (2011-10-30 patchlevel 0) [x86_64-linux]
- INSTALLATION DIRECTORY: /var/lib/gems/1.9.1
- RUBY EXECUTABLE: /usr/bin/ruby1.9.1
- EXECUTABLE DIRECTORY: /usr/local/bin
- RUBYGEMS PLATFORMS:
- ruby
- x86_64-linux
- GEM PATHS:
- /var/lib/gems/1.9.1
- /home/myusername/.gem/ruby/1.9.1
- GEM CONFIGURATION:
- :update_sources => true
- :verbose => true
- :benchmark => false
- :backtrace => false
- :bulk_threshold => 1000
- REMOTE SOURCES:
- http://rubygems.org/
gems seem to live in /var/lib for some reason. Is this normal? How can I fix this so I can install the rails gem?
EDIT: UPDATE!
It appears to me that I have gems installed twice, once in /var/lib/gems/1.9.91 (bad) and once in /home/myusername/.gem/ruby/1.9.1 (good).
I think what is happening here is that when I type "gem" the installation in /var/lib/gems/1.9.1 (bad) is taking priority over /home/myusername/.gem/ruby/1.9.1 (good). Can anyone confirm that? Also, would it be OK and fix things just to delete the bad directory, or would that cause problems?

Answer 1

You missed to use ruby, you can do it with:
rvm use 1.9.3 --install
In case 1.9.3 was not installed, this command will also install it!
It also looks you are using Ubuntu, make sure you are not using RVM from Ubuntu package - that thing is broken! You can find instruction how to fix it here: https://stackoverflow.com/a/9056395/497756