On a video posted on The Ramsey Show – Highlights YouTube channel in June, Dave Ramsey warned people that they will never become millionaires by taking out debt. He said: “I want families to retire with dignity, to be able to change their family tree, and be able to live well.
“I don’t need you to go broke six times in the process getting there.
“We’re not trying to write a success manual on how to go broke over and over again by taking all this risk.
“I went broke once, apparently for all of you so you don’t have to.
“If you can learn from my stupidity, you don’t have to follow it.
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“The idea that sophisticated people borrow money is hogwash, it’s simply not true.”
Mr Ramsey explained that when wealth building, taking on risk “will bring pain to your families and then you have to start all over again”.
The American personal finance personality and his team conducted research with over 10,000 millionaires in the USA to find out how they built their wealth.
The Ramsey group found 93 percent of these millionaires didn’t inherit their money, and they didn’t “use debt to get to there”, they did however pay off their homes early.
Additionally, they found that these millionaires had money in their pension schemes and mutual funds, “that’s how they made their first one to five million”.
Mr Ramsey’s aim is to help people become millionaires, and he states people can’t do that with debt.
He added: “Maybe billionaires do, or someone with 30 million, but you have 30 cents and you’re losing some of your sense, you’re broke.”
He stressed throughout the video that millionaires don’t borrow debt.
Mr Ramsey urged people to “think about where you’re getting your advice”.
He said: “Every day I meet ‘Baby Steps’ millionaires but I didn’t make up any of this.
“It used to be called common sense. It’s just now marketable because it’s so rare, like having a superpower.”
They money saving expert explained that he was able to make millions by selling common sense, “it’s a rare commodity”.
He suggests people should live on less than what they make.
He continued: “Instead we have people who want to ‘Bitcoin their way in’ or people saying, ‘I’m going to play the lottery’, or ‘I’m going to borrow and do nothing down real estate’. They think that won’t bite them in the but later.
“Of course, it’s going to bite you in the butt later, it’s going to bring you to your knees.
“It did me, and it will you.
“Please don’t do that stuff, it will bring pain to your families.”
Mr Ramsey concluded saying that people should take their time when building wealth. Get rich quick schemes won’t help, he said, suggesting instead people “do it slow and do it right”.
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