Dave Ramsey Explains How Rich People Stay Rich: 'They Pay For It Or They Don't Buy It

Respected and sought-after financial guru Dave Ramsey, known for his straight-shooting advice, has revealed how rich people stay rich. Here's what they do. 

There is no shortage of rich people on earth, and Forbes' 2024 list of billionaires proves this. According to Forbes, there are 2,781 billionaires on the list globally and 813 of those are from the U.S., which has the highest number of billionaires compared to any other country. This is 141 more than 2023's list, with an aggregate wealth of $14.2 trillion. Don't forget about millionaires — in 2023, the U.S. had almost 22 million millionaires, about 40% of the world's total. 

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With the list of millionaires and billionaires growing by the year, many people will ask how to build that kind of wealth and how the rich stay rich. During an episode of the Dave Ramsey show, Ramsey explained, "Rich people don't ask ‘how much down and how much a month?" Instead, Ramsey explains they ask "How much? They avoid payments" According to Ramsey, whose estimated net worth is around $200 million, the rich can keep their money by paying for things in full; if they can't, they just won't buy it.      

"It's what got them to be rich and it's what keeps them rich." Said Ramsey. 

On his social media, Ramsey emphasized that "just because you can make the payments doesn't mean you can afford it." 

Avoiding buying things you can't afford is one of Ramsey's tips for building lasting wealth. Another is to start thinking like rich people. For Ramsey, this means thinking and planning for the long term. During an episode of his show, Ramsey revealed, "If you think and act like rich people, you get to become rich people." Thinking like rich people, according to Ramsey, involves having a wills, a financial plan and planning for retirement while still young. Rich people also have insurance for protection. 

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Ramsey advises not to live above your means or withdraw from your retirement savings early. Thinking like the rich also means avoiding more debt; for Ramsey, this includes avoiding a mortgage if possible. However, he realizes this may be impractical for some people, so he advises never to spend more than 25% of your fixed income on housing and to choose a 15-year fixed-rate mortgage. If you have debt, Ramsey suggests prioritizing paying it off using his snowball method, as you cannot become rich if you are burdened by debt. 

According to Ramsey, another way to think like the rich is to invest in things you understand and avoid investing in trending or "cool" things. For Ramsey, this means investing in his real estate, mutual funds and business. Investing in your retirement is also a great idea and you can use a tax-advantaged account like a 401(k). 

The rich stay rich by thinking like the rich and according to Ramsey winning at money is more behavior than knowledge. Ramsey once wrote, "Winning at money is 80% behavior and 20% head knowledge," and added, "Most of us know what to do, but we just don't do it. If I can control the guy in the mirror, I can be skinny and rich."    

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