Dave Ramsey isn’t just any financial guru; he’s a powerhouse who reportedly owns $600 million in real estate, all bought in cash. He is known for his unfiltered advice to callers and usually helps others get their finances in order. But every now and then he pulls back the curtain and offers a glimpse into the personal strategies that got him where he is today.
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A few years ago, Ramsey’s message was loud and clear in a popular YouTube video: “The borrower is a slave to the lender.”
In that video, he described his investing process, making it clear that debt is not just a financial burden, but a roadblock to true wealth. For Ramsey, avoiding debt isn’t just about managing money; it’s about taking control of your future.
Ramsey often emphasizes the power of focusing on “your most powerful wealth-building tool”: your income. He emphasizes that when you keep your earnings out of the hands of lenders, you have the freedom to use them to create long-term wealth. “If you don’t have your income tied up in the form of payments to others, you can invest it and become wealthy,” he says, explaining that a little financial discipline now can lead to significant rewards.
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Ramsey gives a striking example: The average car payment in America is about $503. “That’s just crazy,” he exclaims. If someone were instead to invest $500 a month in a decent growth stock fund from age 30 to 70, Ramsey claims he could amass more than $5 million by retirement. “One thing can make you worth $5 million,” he says, emphasizing how small decisions add up over time.
Ramsey’s advice doesn’t stop at avoiding debt. He is also an outspoken advocate for investing in mutual funds with good growth stocks, a strategy he believes is the best path to financial independence. He favors a balanced approach, spreading investments across four types of funds: growth and income, growth, aggressive growth and international funds. This mix, he says, has a strong track record of outperforming basic index funds. “If the mutual fund you’re looking at is below the S&P 500 line, don’t buy that fund,” he advises.
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Ramsey is well aware that his position sometimes contrasts with other voices in the financial world, especially those promoting index funds and price-conscious strategies. “Some people are forgoing $5 to cash in because they’re worried about these costs,” he jokes, adding that while costs are important, they don’t determine financial success. For him, consistency is the real key: saving and investing monthly, year after year, regardless of what the market is doing. He is clear that “the most important thing is that you put money into the mutual funds, and that you actually invest.”
Ramsey’s approach also reflects his vision of financial independence. To him, paying a real estate agent is worth it to have someone keep you on track. “I need a broker in my life. I need someone who is an advisor,” he says, explaining that even though he knows a lot about investing, he prefers the guidance of a professional to stay disciplined. Ramsey points out that emotional reactions to market trends often influence people who invest independently. “If you’re alone with all your theories,” he says, “you’ll cash out all your mutual funds at exactly the wrong time because there’s no one in your corner to say, ‘Don’t jump.’ “
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According to Ramsey, success in retirement is not just about choosing the right investments, but also about investing regularly. He cites research showing that “74% of retirement success comes from doing it.” By steadily contributing to retirement accounts, people can build a significant savings pot without chasing high returns or jumping in and out of the market.
Ramsey’s advice is simple: stay away from debt, invest consistently, and focus on the long term. He believes this advice can help people achieve not only wealth, but also peace of mind. “This is how you get rich,” he says, emphasizing that the journey is not about luck or timing; it’s about perseverance and discipline.
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This article, ‘This Is How To Get Rich’ – Dave Ramsey Describes How One Move Could Make You $5 Million By Retirement originally appeared on Benzinga.com
