Personal finance expert and best-selling author Dave Ramsey shared tips on becoming a millionaire on Tuesday, emphasizing that “the most powerful wealth-building tool the typical person has is their income.”
The author of the new book titled Baby Steps Millionaires, which reveals “how ordinary people build extraordinary wealth” and how others can do it too, shared the tips for “Mornings with Maria” on Tuesday.
Ramsey, the number one bestselling author and host of The Ramsey Show, emphasized that anyone can become a millionaire, regardless of their background.
Noting Tuesday that “the average family pays $1,200 a month in nonmortgage debt,” he stressed that it’s important to “break the personal debt” often associated with car payments, student loans and credit cards.
“You release that and put it in your 401(k), that’s going to be a million dollars in just a few years,” Ramsey said Tuesday, noting he discovered this while studying millionaires for his book.
“We did the largest study of millionaires ever done in North America, over 10,000 of them, the research was airtight, and we found very simple things for the first $1 million to $5 million in net worth,” he said.
“They fully funded their 401(k)s, used the Match and the Roth (IRA), got into individual Roths and good mutual funds, kind of boring, and they paid off their house, and they look up and they’re you 46 years old or they are 36 years old or sometimes 56 years old and they have a million dollars in their retirement paid half a million dollars for a house and that is their first million dollars in net worth.
“There are about 15 million of them in America,” he continued.
Ramsey also stressed the importance of “living by a plan.”
“No one gains anything, your marriage, your children, your life, your business, without aiming at something,” he told host Maria Bartiromo.
“There’s a whole set of actions that you do on purpose and in personal finance that’s called a budget that tells your money what to do,” he added.
He further emphasized that in a business we have to “tell our money what to do, we have to have a desired future for profit and loss for the quarter and we target things and have strategic moves to do that.” . ”
Ramsey continued, “It’s the same in your private life.”
WHILE BITCOIN JUMPS, INVESTORS DEBATE CRYPTOCURRENCIES
He stressed the importance of getting out of debt, building an emergency fund, and contributing to a 401(k).
“I know it’s not as sexy and glittery as talking about bitcoin, it’s actually kind of boring, the difference is it works every time,” Ramsey pointed out.
Regarding the cryptocurrency, Ramsey told Bartiromo that he thinks “it’s kind of fun” and enjoys tracking it, but it’s an anomaly.
“Building wealth shouldn’t be a big part of a personal financial plan,” he said. “It can be a small part for entertainment.”
He went on to say that one could consider investing in cryptocurrencies “as long as it’s money you can afford to lose.”
“We have people who mortgage their homes, we have people who pull their retirement out of their 401(k)s and put it into crypto like it’s a tried and true process for building wealth and it just isn’t proven process.” Ramsey stressed, acknowledging that the “goods” “will be close by”.
Bitcoin has rallied this year, with prices teetering above $42,000 on Tuesday after briefly falling to their lowest levels since September 2021.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The plunge comes amid investor concerns about rising bond yields and concerns that the Federal Reserve could potentially accelerate the timing of its 2022 rate hikes. Additionally, a bitcoin mining outage caused by an internet shutdown in Kazakhstan over the weekend also impacted crypto prices.
Bitcoin, which hit an all-time high of $69,990 in November, is down about 9% year-to-date. Meanwhile, rivals Ethereum and Dogecoin are also experiencing volatility.
CLICK HERE TO READ MORE ABOUT FOX BUSINESS
Lucas Manfredi of FOX Business contributed to this report.