Number One Indicator Of People Who Retire Wealthy - Dave Ramsey Rant
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- Опубликовано: 28 сен 2024
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I been listening to you since the 90s . We are debt free. I retired at 63. I now get to do what ever I choose. Thanks for the good Advice.
I am 15 and have watched all of your videos. I have read your books and get some weird looks. Best thing is to gain wisdom from others which is why I listen and watch your videos. It will pay off all through my life while my friends and others are in debt, broke, and in a financial disaster. Great Videos!
Murray Twins watch Warren Buffet not d. R
Same I'm 14😂😂 I don't want to go to college with student loans I'm going to try to get scholars
15 - you're probably the smartest one listening.
American Patriot great job!! Keep it up!
Spectro im sorry you have to worry abt the money for college. But stay extremely focused in school get the highest grades possible!! When you get into college you can work part time jobs and save save save save
As my father used to say to me, if you don't think a million dollars is a lot of money, try to save it.
Think * - good quote though
@@patrickpayton416 Thanks. I'll be the first to admit my spell checking sucks.
It's a good one, it's so hard to save it yet ppl say having a million at retirement it's nothing.
In soviet russia, million dollars save you.
This is awesome
literally had this exact conversation with my twin brother yesterday. I told him 100 dollars per month for 40 years is 48000 dollars, but at a 12 percent return that's 1,176,000 and he said " yea but right now 48,000 is a livable wage but in 40 years 1.1 million is not a liveable wage so I'm not doing that." I was really at a loss for words and didn't know what to say. I just sent him this video and told him to watch from 6:30
People like that will regret when they have to keep working through their golden years
Hahaha
My daughter is 15 and started a small part time job this year to save money for school expenses. She asked me to help her open a retirement account to place a portion of her new, small income into future savings. I gleamed with pride. It always amazes me that broke people are always the loudest. Friends were making fun of us because we were doing this. We don't care what they think. We feel that learning to save a portion of what you make for the future is a skill that needs to be practiced just like any other. Learning to be financial independent and secure is an important lesson.
No, those aren’t real friends. That’s probably envy and jealousy. Good for your daughter! She’s on her way
This stuff never gets old.
Maybe “savings rate” being the #1 indicator is because the savings mentality translates over to EVERYTHING else in life. Savings is all about preparing for the future. Those with their eye on the future tend to NOT make dumb financial decisions in other aspects of their lives.
Dave is like your uncle that nobody wants to be with but he is the one you know who really cares deeply about you. If I were to be part of his family I will be luckiest nephew in the world!
"It's scary how stupid people are." I love this man.
I am in China and listening to your every word. Thank you for creating a platform that educates and motivates when it comes to money. My 16-year-old niece loves you as well and she's saving her money right now and learning from you. Thank you, Mr. Ramsey.
J. Flaner Hello China from the US!
@@TheToadChild Hello there! Going on month two and I love it! I love teaching and teaching in Asia is the best!
on my way there 80k in savings, 29 yrs old
Ben Chesterman great job.
Excellent for you sweetie!!
Im 30 and I have 80k as well! GOOD FOR YOU!!! That is awesome!
That's awesome man, young man! Keep it up!
Start when you are 18 and throw in $250/month to an IRA or RRSP and when you get your tax return throw it back in. You will be staggered how much you have when you are 30. Then you can dial back a bit to $100 and still have an amazing amount at 65!
Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My parents both spent same number of years in the civil service, but my mom was investing through a wealth manager, and my dad through the 401k. My mom retired with about 4.2 million, but my dad retired with roughly 1.8 million.
This is true. I'm in my mid 50's now. My wife and I were following this same trajectory. Last two years, I pulled out my money and invested with her wealth manager. Not catching up with her profits over the years, but at least I earn more. I'm making money even before retiring, and my retirement fund has grown way more than it would have with just the 401(k). Haha.
It's unfortunate most people don't have such information. I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $21k passively by just investing through an advisor, and I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns.
I definitely share your sentiment about these firms. When I was starting out, I checked out a couple of freelance investors online, so you could do the same. I personally work with “Sharon Louise Count”, and she's really good.
4.2 million is waay better than 1.8milliom however 1.8 million is still an awesome figure.
Scam alert!
Probably biggest indicator is they aren't caught up in financing every few years 40k vehicles and stuck in huge car payments for whole life. They buy a nice modest used car for cash and use it for 8 plus years.
Mark G
Doing the numbers I've spent less than $44k on 5 used cars in 40 years.
Most people I know and work with spent a minimum of $250k in 40 years.
8? Those are rookie numbers. I'm at almost 20.
Thank you!! I needed these videos. I just signed up for my jobs 401k at 10%. I've been here for 2 years already and am kicking myself for not taking advantage.... But im 26 so better late than never. Thank you Ramsey
Not to worry. You're still starting early enough. Over the next few years, try to get that savings rate up to 15% as Dave suggests. (Maybe increase it by 1% a year?) Although I'd begun saving a little in an IRA before then, I, too, started saving in my company's 401k plan at age 26 (at, I believe, only 5% to begin with, so you're already ahead of the game), and my balance is looking great 12 years later. You will do just fine, I think. :)
Your still in your 20s you still got time ✊🏾✊🏾
I'm so thankful for the place I'm interning at. I can't afford to contribute because I'm trying to cash flow as much as possible until I finish college, but they automatically match 4%. It's not much, but I'm glad to be ahead of most other 21 year olds when it comes to retirement.
You still have plenty of time. Some people are twice your age and haven't saved anything. Have a saving plan and do your best to stick with it for a long time.
I did 40 percent for the past five years. I learned to not miss the money, plus I paid very little federal income taxes. Basically, I lived on what my Social Security benefits might be someday. I wish I'd done that my first 20 years as I'd be well into the millions by now, not that I'd know what to do with that kind of money as don't really need it - now anyways. When I'm 85 I'll need it. Students in school should be taught basic finances and investing.
i was taught to save 50% of my income from my first job at age 14. because my birth family died early, before age 50. i decided i wanted to retire at age 45. at age 27, i really began to dump as much into savings for that goal. i also bought gold. during this time i married, had two children, served in the US Air Force. because all that cash was behind me, when Murphy and his bag of nasty stuff showed up, i was ready. i was medically retired after my plane crashed. my husband decided he loved somebody else. cancer came calling at age 40. 1/1/2000 was my last day of work, ever. because i’d saved 50% of all my income, i got my military retirement. i became a stay at home mom, by default. G-d killed off the cancer, i just lost a portion of a brain. the upside, i paid cash for my children to go to law school and medical school. my home is paid for. so at 57, i actually make more per year than any year i actually worked! it can be done. my children have followed my example and are well on their way to living a nice life. i don’t know what their dad has planned for, but they won’t have to care for me.
Jobelle Collie Wow, Awesome!!! Bless you!!!
Jobelle Collie 0p0p
Jobelle, God bless you... you're a $ ROCKSTAR!!❤
u are one brave survivor
You're a badass.
Simple fact. It took me five months to save over 1,500 in two savings accounts. Not because of the interest rate. Because of the money I was putting in them instead of the fast food places.
I did a quick calculation. $1,000,000 in 2015 was worth about $2.2 million in 1985. So in the year 2045 it may be worth $480,000. With 0% growth.
I will take that over worrying about how i'm going to eat tomorrow in the year 2045!!!
Dave is right!!
+wood brass and glass just give up then.
Yeah but a 1000000 dollars ain't gonna be worth that much lol!
+terminaterjohn no he said it correctly. with a 4% inflation rate, x amount of money 20 years ago is worth less today if it received a rate of return lower than the inflation rate.
which is why you need to retire with atleast 4 million plus in future
You also have to factor in that you didn't invest $1MM to get a $1MM in 2045, you've invested a fraction. so even if you get $200M..guess what, you're still on top.
I want to retire with DIGNITY! Thank you Dave!!
In 1990 I got a new job that offered matching up to 5% in your 401k, so on day one, I did 5% plus the works 5%. Every time I certified on a position I would get another raise but I put half of it into my 401k. I did this because I knew I was NOT a good saver, but I never saw this money to spend it. Before I knew it, I was putting in 17% + my employer's 5% total of 23% into my 401k. Now I have a pension, social security and 2/3s of a million dollars in my 401k, which I moved it to something safer. And that was before I heard of Dave Ramsey. Oh and I'm DEBT FREE!!! Thanks Dave!! Oh I forgot, I retired 7 years ago at 56 yrs old, own 2 houses, paid off both my kids student loans, play golf 4-5 times per week.
The person saying being a millionaire 40 years from now won't mean much is absolutely right. That's why I'm saving to be a double millionaire instead!
TheGlideIsHere it's better than nothing!!! I'm saving for double that too!
My retirement isn't that far off......I'm aiming and on track for 1.6 million, perhaps 1 or 200k more. 1 Million would be doable, but I'd rather live a little better than just good enough.
I love this comment!
If you aim at nothing you hit it every time. Dave is 100% correct!
@@DigitalHaze65536 I agree. The sad part is that all the people who do this will end up paying for all the now elderly people who did not.
We started sorting out our mess late at 44 years of age. Fast forward 9.5 years combined with these principles and we've turned it around. Now we have no debt, a mortgage free house and 260k NZD invested so far. Small bites of the elephant, frugal living and consistent investing wins in the end.
I am a full time student and still manage to save more than everyone else in my family who all earn over 50K per year. ( i do live out of home too ). I don't get it how people can't see this issue.
thanks mate :)
every situation is different.. Don't compare yourself to individuals , compare yourself to the mean
Another great video. Hope I am done with mortgage within 10 years (400k). Keep a small part in my retirement account. Best advice I got: Pay yourself first! Now all money which goes away and not increase my invest/safings hurt. :)
@@Blubbha Do you have children? i have a 250K mortgage and hope to be done in 25 yrs. I need to double down on payments for sure, but how are you doing it in 10?
@kirk McAllister the best way is to increase your income. You can only cut your expenses so far but your income doesn’t have an upper limit. If your wife doesn’t work get her back into the workforce once the kids are a bit older. That second income will help a lot with the mortgage, just put it all to paying down the debt and watch the number drift down to zero.
I started late because of a financial mistake with credit debt got out of debt. Started in my early 30s. Took max match on 401k 6%. Every year took half raise and put to saving. I'm turning 58 at 16% hitting just shy of a mill and put 2 kids through college. If I had started in early 20s estimated I would be at 2 mill. Thats what compounding can do. Please listen to dave.
Put freaking money into your retirement account!
SoulBaron how you do a retirement account from which bank?
Ramon vargas You open an IRA through Fidelity.
Chris Garner a pe a ba da a pe de pe
Ok Boomer
@@suad01 Ok loser
The piece of research in this video backs up what Dave has been saying all along...your biggest wealth building tool is your income. When you have money and budget, your savings rate will be the beneficiary.
I appreciate this Dave. Unfortunately, you tend to encourage people to pay off their student loans and their mortgage before they contribute to their 401k's. People have to do both. You shouldn't wait until you're 36 years old to start putting money away toward retirement. The earlier you start, the better off you are.
Preach... it gets so old hearing people say, “well with inflation..... it won’t be worth half of what it is now...” garbage
He's not wrong; at all! I started mine last year and personally contributed 3.5k. Between compounding interest and employer matches, I ended the year with 8k! No joke! I just switched jobs and they won't let me start contributing again for another 2 months so it's driving me crazy! My goal is to be able to retire by age 40.
+The Megan Experience You can always invest in an IRA (Roth or Traditional), while you wait for your job to start letting you contribute to your 401-K.
I have to do research on this. I forgot what I am contributing to my 401k
avburns
Heck that Roth IRA should be maxed out each year automatically.
Also taxable savings and other investments each year like qualified dividends and tax free muni bonds.
Don't just do the 401k only.
You need to be able to have options to blend your income during retirement.
Get with a broker! Don’t always depend on “the job”. The job won’t depend on YOU.
@@avburns .... Fyi... I only do "Roth IRA" now. In the old days they only had Traditional IRA's which we did. Once we start taking that money out, we will have to pay taxes totaling apx. $350,000.00. Currently, your children can inherit your IRA's, so with a Roth IRA there earnings would not be taxable. (I think that is what I'm understanding, but those politicians are talking about changing that but you still benefit.)
The Megan Experience.... Unless you are really rich, I encourage you to continue to work after age 40. Just find something you love doing. Money flies out the window faster than you know. You may develop health issues and insurance doesn't cover everything unless you pay a lot for insurance coverage. Investments can go south. (I know people that had bonds that went defunk... over $600,000.00 gone from there retirement funds.) Good luck.
Every now and then I listen to you just to check if I am doing right things financially…
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ruclips.net/user/DaveRamseyShow
Hi Dave. Please respond if possible...I have found that people have that negative attitude because they DO NO UNDERSTAND the basics of saving. If people do not know how to do something they will resist it out of fear of not knowing...it's a downward spiral until they learn how step-by-step..
Mario Navarro I had a subscription to MONEY magazine. They bashed Dave in a multi page article, then in the very next page, tried to tell people what credit cards were best for them. That killed their integrity with me.
Credit cards are actually a tool that responsible people can use to save 3-4% on their expenses and sometimes even more. Dave's retirement strategy is out of the 1980's. It simply doesn't work in a time where over 1/3 of working-aged Americans aren't a part of the labor force because of no/poor job prospects.
+Synapse2k I disagree. Any system can be loopholed and exceptions exist to every rule. That being stated, the nature of a credit card is to give a person access to things or experiences she cannot or is unwilling to pay for when the money is due. During the last 20 years, the credit industry has received a third of its revenue from fees, interest, and penalties charged for lines of credit. It is statically impossible for that high percentage to be coincidental. Using credit as a means to make or save money will put you one step closer to earning that Ph.D in DUMB.
I use credit cards for every purchase for convenience and to get the cashback bonus. I've never paid a penny in interest or fees.
"Your parents are cousins." Ha! I choked on my lunch when I heard that! Lol!
lol xD
shout out to my parents
That's actually pretty common in much of the world.
@@nolongeramused8135 i agree lots of tribes out there !
“Its scary how stupid people are!” Lol classic line Dave 👍
And all too true! Even scarier when stupid people go to the polls...
I love Daves rants , he,s spot on and a good bloke doing his best helping people to realize there potential to get somewhere in life and retire with a healthy safty net no matter what age you are you can still do something rather than sitting on your diddly squat.
Read Dave’s books in high school. Retired at 24 a millionaire. Drive a Porsche. Golf with and listen to wise old people. Savings rate 75%. No debt. ROR 18%+.
Thanks Dave! 💰 😊
Been following Dave since the early days. It's payed off big time.
Hasn't taught you to spell.
Every dollar not spent is a dollar saved. Every dollar saved is a 100% return.
don't knock money magazine. the info I learned from that mag when i was 21 (I'm 45) made me rich. I learned the rule of 72 (look it up) and I made a giant commitment to saving and investing in index funds. My wife is a big time exec at a top 3 wall street firm and I have a degree in finance and nothing either one of has learned over the past 24 years has topped the power of the rule of 72 - money doubles every 12 years at 6%....Forget about big returns, if you focus on never getting a negative rate of return, and averaging 6% will be enough to make you rich if you just commit to dumping in the cash.....
I know, he's so arrogant sometimes it shocks me.
He makes money from advertising tied to high fee mutual funds. If you really want to talk about a "study" you can see how much high fees cost you in the long run. He is a smug, arrogant SALESMAN. That is it.
Cory Blevins you know this for fact?
I am only an old country boy, but after listening to Dave for 2 decades and following his advice, I have yet to meet anyone that has actually tried following his advice that becomes worse off. When I started listening, he was on less than 100 radio stations, but I have followed it pretty diligently and managed to average better than the S&P, net fees, and I am just a stupid truck driver. Some of us would just like to thank him for laying out a simple way to win.
Vanguard is hard to beat. a mix of large cap, mid cap, small cap and international index funds, along with cash and a short term bond fund would work for most people. the exact balance would depend on your age, investment time line and tolerance for risk. Vanguard ETF's would work just as well. Good Luck.
I started with nothing and am now comfortable. My path was similar to Ramsey's. If I had followed his path exactly, I would probably have 5x as much by now.
TL;DW
"74% of the reason people retire with dignity is because they save money."
No, its SAVINGS RATE. Saving as much % of income and investing it in index funds dictates how well you will be in life.
moral of the story.....more work less studying. not saying that you shouldn't study because it is vitally important, but 100% studying and 5% action will not yield much! Thanks Dave!
You guys could include charts and excel spreadsheet snapshots throughout the videos. I know finance like Dave and visual charts and spreadsheets that help people visualize things like compound interest can help to see how powerful they are over long periods of time. Good stuff Dave! Consistency is key to achieve long term wealth. I'm shooting to become a millionaire by age 30. Got 5 years left and I own a business worth around 60k-70k so far. Going to start investing and selling real estate this next spring too.
Did you got your first million yet?
just curious how is your business doing?
I am a huge financial nerd.
“Your parents are cousins”…. Dave your killing me! Thanks for the laughs!!! Keep up the great work.
Sweet Home Alabama
This guy is hilarious! 🤣🤣🤣
What’s interesting here about the 100 a month comment not being worth anything due to inflation is the 100 is never adjusted for inflation. Now run the numbers with 100 a month for year one then every year increase that 100 a month by 3%.
Surprised he thought it was rate of return. I'm quite good at saving and investing but I didn't think it was terribly difficult to guess that savings rate was the most important factor. This is actually my mantra when I give people advice. Too many people try to focus on being great investors when it is a lot easier and more impactful to be a great saver.
I know people who frequently go to the casino and/or play the lottery. And they usually say "you cant win if you dont play". Better them than me, but I feel the same way about retiring with multiple streams of income!
A million dollars is also plenty if you're living debt free, own your home etc etc
I would also think that age at which you start saving plays a huge part in it. I started when I was 25 and I will have at least 4-5 million when I retire. And thats on a pretty low income. But I see so many people who are 35 and still have nothing to show for it and have never even considered their retirement, let alone increasing their contributions to it.
What's low income for you?
Dave's point is valid because as the decades pass you naturally increase how much you save regularly. So, the best way to approach this is to save regularly NOT A FIXED DOLLAR AMOUNT but rather a PERCENTAGE of your monthly pay. Save 15- or 20-percent of your monthly pay in a good growth mutual fund (or income fund) and you'll do just fine.
The ones who retire wealthy are the ones who answer the following question: "Why should I save money for retirement when I could die tomorrow." in the following way:
"What if I don't die tomorrow?"...................
Vern Shein
💯 some things are just simple.
@@Kenya1984 lol
Because government..
Yea! Nothing in, nothing out. So true. I worked as a R&D Chemist but, was ( and knew) that I was not at all financially astute. Still my company offered a good 401K and every time I got a raise I put it in my 401k. Now had I been more astute, more aggressive , I would have probably done much better. Still, I did much better than I though I would do. Not rich but, my savings income is better than my SSA. You sound just like my Dad. I continually th and God for me having a father who tried to teach me about money and many other parts of life.
Retirement in early 50s....this is a very big red flag when you have saved enough $$
On my way. 23 years old and about 100k invested 🙏👑
Great perspective Dave. Save early and often.
Our current SR: about 50%. Our bring home income:$52k/yr. Mortgage is $650/mo.
I actually read a comment where a lady said "having a job is making someone else rich". Now that's about the all time stupidest thing I've heard. Choosing EBT over working.
She means having a job vs. owning a business, not being unemployed
@@weemeemoo Nope. She had already made it clear that people are "owed" a certain level of income. The remark was simply an ad on about how unfair it is to have to work. I worked for forty years and don't recall having made anyone rich.
My mom is 76, lives in squalid poverty, she never invested
I think ramen is more cost effective than alpo. I would start there first.
haha. true.
and rice.. lots of rice. Mix it in the Alpo if needed.
Raman is good. Put an egg in there!
@@davidl248 yessss! Yum.
@blah blah Only use half the season packet to reduce the salt 👍
31 married with a six month old daughter. We have no debt and $1.3 million. I really think we would need $10 million to realistically change our lives on what we do day to day. We could have my wife stay at home and slow down the savings path. I truly believe that time is the only thing in life that matters. I want to reach the escape velocity and play with our daughter when she is young. I have done everything in my power to increase our net worth. We didn't spend anything on a wedding, cars, clothing. However, we did build a new house. Money is just a tool to buy a time.
Love this dude!!!!
He's got me killing it!
My 401k analysis was not based on putting money into the plan. My plan was to reduce Federal income taxes to a lower rate(12%). In order to do that in 1989, I had to put 16% of my income into the 401K. That also gave me a 3% company match on the first 6%. This tax plan when executed placed 19% of my income into a 401K for the 20 years that I worked there. When we were laid off after sale of the company, I learned that I would reach my retirement goals if I just let it grow for the next 21 years until retirement. As long as I did not touch it until retirement, I would not need SS or the pension that I earned. So yea, the number one thing about saving for retirement, is the actual initial savings part.
Here’s the other thing, not mentioned here, why wouldn’t you keep your contributions up to date with inflation?
The number one indicator is people who work hard and are consistent in life with emotion and challenges and work their way up the corporate or entrepreneurial ladder AND know that buying things (including travel, yes, travel), won't make you happy. Happiness is found in self and doesn't require purchasing things. Shown me the man who knows he doesn't need to buy things AND consistently keeps a job with a growing salary and you're showing me a wealthy man.
I love your show Dave!!
People misunderstand about inflation, I do not think Dave should have got on that guy. This is the reason people do not save. I think in these times it is easy to give up. When you don not have some one to show you to do so. Yes you should save money in a investment vehicle. It is better than nothing, people do not know money is a tool. You can use it for good or bad. You could be in debt or pay off your debt and save for the future.
Dave is correct that saving rate is paramount. However the fees you pay MATTER! Why he can't just say, 'Savings rate is very important, also buy index funds with no load and an expense ratio under .3%'. Because that isn't too much information to convey in a 10 minute video.
Only reason to mock people who like to keep the fees low is because you are getting part of those fees that we are supposed to pay and not think about.
This is my issue with Dave. Gives good saving and getting-out-of-debt advice but his investing advice leaves something to be desired
Agreed. Conflict of interests.
Exactly!!
Lol, that wasn't the point. He mentioned pretty clearly that saving was only %74 of the issue. The other %26 speaks for itself.
I’m just now seeing this and all I have to say is that I love Dave’s sweatshirt!
But Robert Kiyosaki says savers are losers! Kiyosaki and all the other get rich quick liars that have ever been or ever will be won't tell you the truth like Dave did right here.
Drogo Baggins Robert Kiyosaki said that saving just for the sake of saving is pointless unless you invest the money
He's also talking about a different cashflow quadrant in my opinion. He's talking to the Bs and Is and Ramsey is talking to the Es and Ss and what they can realistically do.
what you need is MLMs, that'll get you there
fsmoura 😂
The reason that the number one factor for having a great retirement is the amount of money you put in is because of the multiplying affect of compound interest. The multiplier might be 50, 60, 70, or 80. In other words every dollar you put in might be worth 50-80 times more at retirement.
Omg.....I spit my coffee out. "Your parents are cousins".....I laughed so hard.
Sometimes the most obvious answer is the one that is right in front of you
I invest and it still bothers me when he said 12%. I can invest and don't agree with this number at the same time.
Which balanced diversified portfolio will give you 12%?
seriously
Reheapification I've had a retirement plan through my employer, and have maintained an average of 14.8℅ since 2009 when I started it.
Yes it is a bull market during the period right after the crash up until now. I am talking about the long term performance.
I am too. One of the funds available has maintained 11% since the 1940s, so why is 12% so unheard of?
Reheapification don't diversify too much. Read the intelligent investor by Benjamin Graham, just find few good companies and stick with them.
It’s crazy I just realized with my bill check I save 25% and with my free check I save 75%. And I have a 401k where I put in 6%. I guess I’m on track if I keep it up. I’ve been doing that for years now so it’s natural and normal to me and my family. We are not missing anything and I still enjoy the fruits of my labor.
,,It's scary how stupid people are'' 😂 love it, so true
Anyone who says $1million isn’t worth what it used to be, I always say I’ll take it from you if you don’t want it.
I would have answered this differently. The number one indicator of people who retire wealthy? Being able to give back in time and money.
MSG Jim Volstad
US Army Retired
VA Volunteer
Audie Murphy VAMC
That's what I'm looking forward to. Being able to help people with my money the way that people with money have helped me.
***** please explain in more detail....I don't think this explains how one BECOMES wealthy at retirement age. Rather, it explains what one can do if they do become wealthy at retirement.
Yes it's frightening how people are careless and play with their own lives thank Dave for the insight calls God bless
Dave is probably the single greatest contributor to personal finance in our times. But doesn't his point go without saying on his one? Obviously, you have to put something in the account. Nothing is possible without the initial and subsequent contributions.
All my real estate is debt-free, and my cashflow is tremendous. Dave Ramsey is right 👍💰💰💰
Thanks Dave!
Always pay yourself first and live slightly below your means.
Whether you’re buying stock or trading, there’s never been a better time to invest and make the most either on short or long term basis. Stocks are being sold at great discounts so buy as much as you can and wait for the rebound. I have made a few rather modest investments in individual companies like TSLA, NASDAQ, AAPL alongside BRK-A..i trade as well using the right strategies, I use a financial advisor/broker, it definitely made an impact on the size of my portfolio. Only the thick skins get rewarded in these times!
I’ve got similar picks but mine has NVDA..good choice
I’m not very sure about the market due to volatility and I’m more focused on short term and following a news about an investor who grew huge profits in few months, my question is, what strategy can I apply to make this from the current market?
Van Hall Try looking at trading from a long term perspective, still we do have quite a number of stocks which can grow 20-30% in 2020! although I use an FA if you invest now I’m sure you’ll get some great returns long term👌🏻
Anita Frewman But do you mind leaving your consultants info or preferably I can leave mine I don’t mind?
Van Hall Suree but I can’t leave her number here so you’ll have to google her the way I did, her name is Lucy Maria Koss. Look her up and goodluck with your stocks !!!
How people think is the number one thing keeping them from becoming wealthy.
Dave is right, learn how to save, 👌
Truth! So thankful I found you Dave. God 🙏 Bless!
This video is straight forward good advice. Nice job Dave!
Just when I’m about to get a pay bump next month this pops up in auto play.. thanks Dave!
I put $750 every 2 weeks in my 401K.
Dave Smith just make sure 90percent is in cash
how are you saving more than than the IRC limit of 18K in 2017 and 18.5k in 2018?
John Lowe
I contribute around $800 every two weeks into my 401k.
My contribution hit $18k in November and stopped so I'm getting extra $800 take home pay until next week then it starts over for 2018.
Another thing is company match continues to the end of the year so my total 401k contribution for 2017 is $26k.
Once I turn 50 my total 401k contributions will be around $31k a year because of catch up.
For the past 15 or so years I have been putting the $18k into my Roth 401k which is after tax and so will the catch-up amount at 50 years old.
Company match only goes to before tax.
Larry Boatright
If he has self directed 401k 90% cash isn't good.
All through the Great Recession and housing crash even though my account dropped in value i was still getting more than $40k a year in reinvested dividends on top of annual contributions.
So my 401k was growing at least $66k every year since 2008. That's over half million. Then you have compounding and the stock price back up since and still growing.
That's why I currently have over 1.3 million in my 401k.
I don't have all mutual funds like Ramsey but even they are better than 90% cash.
Thanks for this video. It made me think of my rental properties in a new light. In ten years with inflation rents will go up. My mortgage will stay the same. So my cash flow will increase with inflation.
Only reason I enjoy analysis of anything is because it enables me to execute with confidence.
People in general seem to have insecurities about execution, and they are causing harm by not doing anything.
Im doing it and it feels good, im way behind but im making progress...Thanks for the encouragement!
Where do you get 12%? I just went through Vanguard's funds and I can't find any using a 10 year time horizon and I can't find any.
12% is a number that if you are lucky you will get over some period of time. He's talking as if he can get it over 40 year period which will be a major challenge. Number one reason people succeed in investing in 401(k) plan is to actually put money into it. Of course that is the case. However, he was incorrect in stating 11% invested steadily into it will be more than 11 times as much as putting 1%. It is exactly proportional so 11% vs 1% is going to end up being exactly 11 times as much. As usual, he has fuzzy math.
I suppose he isn't the only one that doesn't include inflation. Most money books neglect to mention any inflation in their illustration. I also want to know when a person actually commented on his lack of inflation, if that person actually used that as an excuse to not invest. The reason people don't invest usually is because of confusion and misinformation. It is just as harmful for people to invest with too high of an expectation as it is to not invest because of too low of an expectation. I for one knew the issue of inflation thus I planned for it. In fact, inflation itself compounds so if you get 10% investment return and 3% inflation, it actually is less than 7% after inflation. 1.1/1.03 = 1.06796.... about 6.8%. Even fewer books cover inflation in that detail. Because we are in a low return environment, the impact of commission and costs and drags like inflation are even more important than it has been in the past. I know Dave's response is that I'm splitting hairs but we're in a world of index fund having expense ratio of 0.05% so in that context, the difference is significant especially over a longer period of time.
He states in this video that $100/month for 40 years gives $1,176,000 then commented it is average annual return and not compounded. Actually, the returns using compounded return of 12% return is $1,176,477.25 so he is incorrect again. So he did mean compounded yet after a lot of critics stated 12%/year was not realistic, he stated it is not compounded. The problem is that simply arithmetic average is not something you can take to the bank unless the returns are absolutely stable. Once it goes up and down, the arithmetic average return will always be stated higher than compounded (or geometric) return and the divergence can be huge depending on the fluctuation of the market. I'm surprised he has a finance degree. This is something he ought to have learned by the time you graduate from high school.
Getting the return to be 10% which is still probably high, 40 years of investing $100/month will be $632,407.96.
I suppose using 6.8% might be closer to reality that people can understand if a person put $100/month and increased it by inflation and trying to figure out the money at the end of the 40 years in today's dollars. The number is now $248,192.10. It's not bad considering the amount of money put in at constant dollars is $48,000 or about 5.17 times. That still might be too high of a projection but I don't think it is a disincentive for people to save. I think planning should be done with realistic expectation. Otherwise, people will think that because we can get 12%/year return, even if it goes down a fair amount, you can catch up pretty easily later on. So without realistic expectation, the concept of controlling risks also goes flat on the face. It also makes it difficult to compare with other investments which a person may be comparing it against.
The 12% I believe actually originated by the fact that the highest rate of return that can be used for illustration for variable life insurance policy is 12%. If insurance industry can use it as within "reason", he thought he can use it for his illustration and get away with it. As we face lower return environment, more people will criticize this approach. Dave is still not budging from 12% despite huge evidence that his numbers ought to be adjusted for today's realities. He fends off critics by stating a few funds that have done better than 12%/year but those records were set over many decades. The average for the fund in the last decade is less than 6% and both funds he used as examples under performed the market.
Returns are important for sure but you need to be able to get through the declines. The problem is that there's no reliable way to pick winners over losers on similar funds except by cost and tax efficiency especially over longer periods of time. This is why statistically, it is better to use index funds for lower fees, better tax efficiency, etc. for most people. It's Warren Buffet's advice and in fact, the money he is leaving for his current wife is 90% in S&P 500 index fund and the rest in cash.
www.fool.com/investing/general/2013/06/03/dangerous-retirement-planning-advice-from-financia.aspx
www.daveramsey.com/askdave/posts/126808
if you bought fnma few months ago you would have more than doubled your money already. Its going to 20+ dollars a share within 12 months
One of Vanguard's, for instance, shows 16.58% avg. over the last 30+ years.
Francis Ebbecke the S&p 500 has a average annual return of over 16% for the past 10 years
@Jolly-Joy Money you do realize that probably 75% of people who listen to Dave are not good with money right? Dave wants you to invest for retirement. Put money in. Fees and rate of return are not the goal here. Yes, I agree they matter.. but you got to put money in first!
For all the people who keep asking about 12% returns, American Funds has some strong performers.
They have 6 different funds that have lifetime returns between 11.5% and 13.1% and the inception dates of those funds range from1934-1973. There is a little variability between which class of shares you purchase, but they stay pretty consistent overall.
As much i don't like dave at times - he is like one of the only people that don't tease in the title of the video. It isn't bait. The videos do the titles
lol. I literally just heard this yesterday!
"$1,000,000 won't be worth that much in 40 years"
Respond with, "It'll be more than 0."
The truth is, in 40 years, 1 million will be worth somewhere near 300-400k in today's money. Over the last 100 years, the purchasing power of a dollar has declined 99%. What you could have bought for 1 penny in 1917 costs a dollar today.
Better response: Good thing we aren't saving in dollars, but in a % of a company's earnings.
if you look at Dave's example of Ben and Arthur it really hammers in the idea of compound interest snowballing...but in the case of Ben he stops investing and his account is worth more...but with a little knowledge about inflation you would never stop investing if you could
"It's scary how stupid people are" 🤣🤣🤣
Started saving when I was 28 years old and my wife and myself stayed with it. Yes load American Funds because we had no background in investing but learned. That was 1980 and I saved until I retired in 12 she saved until 14 when she retired. We have since divorced but we are financially in great shape and she and I are friends. Invested the max I was allowed in TSP and her 401K when they created those funds. Always lived below our means and sacrificed not eating out all the time or going to movies all the time as our friends would. Not the best clothes and bought used cars most of the time. Now we buy new cars but keep them forever. Yes folks save and save and save.
This is awesome!!! Go Dave!!
The whole point of the 401k or IRA is that you are buying stocks in companies and funds that invest in them as well. Your stocks are an asset because that is ownership in these companies that generate wealth and income. That's why warren buffet said to look at it as how many hamburgers you have. As long as you invest in a commodity that doesn't wither with age or hopefully does well you will be ok. It's having cash that's bad because it doesn't gain any value it just stays stagnant and banks only give you crumbs for them as well.
You've got to feed that monster and watch him grow!!
Yep I’ve run the numbers again and again. I can’t get where I want to be without putting a lot in. Especially early on.