Dave Ramsey recently shared a video on YouTube shorts where he discussed the two rules he learned from working with wealthy people over the past 30 years.
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These rules, which are that wealth rarely comes from inheritance and that most wealthy people become that way from consistent, conservative investments, are similar to other financial experts’ advice.
For people who want to become millionaires someday, here is more insight into the two rules for millionaires that Ramsey described in his YouTube short. Both rules are straightforward and should be easy for most people to follow if they want to become more financially responsible.
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The Ramsey team conducted one of the largest studies of millionaires which found that very few come from inherited money. Research published in Thomas J. Stanley, Ph.D.’s book “The Millionaire Next Door“ confirms this.
So, while some people certainly inherit money and become wealthy, most millionaires build fortunes on their own. Ramsey regularly mentioned this because many people believe they cannot become millionaires, that it’s something for other people born into wealthy families. However, Ramsey explained that becoming a millionaire is within reach if people follow certain principles.
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In his YouTube short, Ramsey said millionaires don’t engage in “fancy, weird, extremely risky” strategies to build wealth. Instead, he explained they stick to simple investing methods that they understand.
Then, Ramsey shared his own investing strategies. He explained that he invests in growth stock mutual funds and real estate that he buys in cash. These are two types of investments that he understands well.
Ramsey explained that most millionaires only invest in what they understand. This is also advice that Warren Buffett, one of the wealthiest people in the world, believes in. In fact, it’s one of Buffet’s longest-standing investment principles, according to Inc.
The takeaway is that simplicity works. Additionally, most people don’t become millionaires overnight. Rather, most people reach millionaire status after a long period of time where they consistently make smart financial choices.
According to Ramsey, if someone wants to become a millionaire, there are a few steps they need to take. He calls his framework “The 7 Baby Steps.” Here they are in order of how Ramsey recommends people complete them.
