June 03, 2021

The Top 5 Lessons We Can Learn from Dave Ramsey, Ep #48

21 minutes

Many people know I’m a Smartvestor Pro with Dave Ramsey and I’m often found on his website as a resource. I agree with so many of his financial principles that help people make good financial decisions and begin to build wealth. So in this episode of Retirement Made Easy, I’ll talk about 5 lessons we can learn from Dave Ramsey. I’ll also answer questions from two listener emails. Don’t miss it!

You will want to hear this episode if you are interested in...

[1:27] What can we learn from Dave Ramsey?
[2:58] Lesson #1: The #1 indicator of people who retire wealthy
[6:03] Lesson #2: Sticking with the basics
[7:39] Lesson #3: Stay away from credit card debt
[10:01] Lesson #4: Be intentional with your money
[11:55] Lesson #5: Live like no one else
[13:44] Listener email #1: A “thank you” from Jerry
[16:26] Listener email #2: Some “hate mail” from John

The #1 indicator of people who retire wealthy

What is the #1 indicator of people who retire wealthy? It’s how frequently and how much someone saves or invests money for retirement. Dave Ramsey recommends people invest 15% of their gross annual income. All you have to do is save 15% of your gross income. That’s it. What else should you do to ensure you retire wealthy? Make sure all of your debt is paid off and you have an emergency fund of 3–6 months of living expenses.

You have to stick to the basics

Don’t try to get lucky with speculative investments. Stick with proven investment methods (like growth mutual funds). Dave Ramsey conducted the largest survey of millionaires in this country. 80% of those surveyed said that their primary investment vehicle was a 401k or employer-sponsored retirement plan. If millionaires are finding success with this method, so can you. Why try to do something different? Do what successful people are doing.

Stay away from credit card debt

The same study found that 40% of the general population had outstanding credit card balances. They’re paying 10–20% interest to a credit card company. Even more interesting, of all the millionaires surveyed, only 6% had outstanding credit card debt. “But Gregg,” you might say, “Credit cards can give you free points and help you build credit. If you pay them off every month, you won’t get charged interest.” In theory, that sounds great. Unfortunately, 40% of the population has a running credit card balance. That’s why Dave Ramsey will never recommend using credit cards.

Be intentional with your money

Dave Ramsey offers a free budgeting app called EveryDollar. He recommends sticking to a budget so you know where your money is going. 90% of the millionaires he surveyed shop off of a grocery list. This goes to show that you have to be intentional and disciplined in the simple areas because they bleed over into the rest of your life. Dave Ramsey will always tell you to pay cash for a car and other large expenses—and I advise the same.

Live like no one else so you can live—and give—like no one else

Dave Ramsey says this over and over again. What does he mean by that? You can learn how to be happy living below your means. You can get a plan in place for your future to save and stay out of debt. If you stick to your plan and stay disciplined, you’ll wake up and see the wealth that you’ve built. You’ll be debt-free and your wealth will carry you for 30–40 years. You can give to charitable organizations and take care of your loved ones.

Listen to the whole episode for segment #2 that covers some listener questions (HINT: It’s about why I don’t give specific investment advice).

Resources & People Mentioned