Change is in the air. A new year, a new president and a new moment for it to be your turn to win. I’ve spent the last 40 years studying wealthy, successful people and the principles that made them members of that club. This new day in America is going to be your best chance in a long time to apply those principles and live your dreams.
While I am confident the new Trump administration will improve our economy, it will not make you personally wealthy or successful. The truth remains that what happens in your house, not what happens in the White House, has everything to do with your ability to win and live your dreams. Successful people will tell you the government takes much more than it gives. So, while you can be excited about the new administration’s approach to the economy, you cannot wait passively on the sidelines hoping President Trump will somehow make you wealthy. He won’t. It’s not his job.
As a person of faith, I’m a big believer in prayer. The Bible is very clear that God does not financially bless the lazy, or the incompetent. Praying for your corn to grow while failing to plant any is not a biblical principle nor one of successful people. St. Augustine is quoted as saying, ‘Pray as if everything depended on God and work as if everything depended on you.’ Proverbs 10:4 (ESV) says, ‘A slack hand causes poverty, but the hand of the diligent makes rich.’ My grandmother used say, ‘There’s great place to go when you’re broke … TO WORK!’ God loves you, but He will not make you wealthy unless you follow His commonsense principles.
Knowing that the new administration and even God who loves you are not going to make you successful without your personal diligence and competence, then it’s up to you to take action. Doing the same thing over and over again and expecting a different result is the definition of insanity. It’s time for a change.
Our company, Ramsey Solutions, did the largest study of millionaires ever done in America. The research methodology was airtight, and we had an outside firm ensure we didn’t have any confirmation bias or other issues with our process. The conclusions of this study are based on data, which makes them facts. So, if you disagree with the findings, you are what’s known as wrong.
Normal in America is broke. In the most prosperous society in human history, people are making money and they’re broke.
I unpacked the white paper in my number one bestseller ‘Baby Steps Millionaires,’ and we discovered many things your common sense will tell you and very few things to confirm your childish emotions about what it means to be a millionaire. Eighty-nine percent of America’s millionaires are NOT millionaires because of an inheritance. You can take hope in that fact because it means YOU CAN build wealth and live your dreams.
Millionaires do drive used Toyotas, and they do live on a written plan for their money called a budget. Millionaires are generous. And their purchase patterns indicate they do very little to impress others. Their Instagram highlight reel would be exceedingly boring. They don’t care what other people think. They are not taking a poll.
They are aimed at a goal of financial security and are willing to sacrifice to get there. They read more than they watch TV. They are mostly debt-free and pay off their homes on average in 11.2 years from the time they set their mind to build wealth. While people generally become millionaires at an average age of 50, we discovered a surprising number of young millionaires as well. They contribute to their 401(k)s in good mutual funds like it’s a religion. They agree on their goals with their spouse and work in unity, not separately. And both are emotional adults, no spoiled-child temper tantrums to distract them from their goal.
They like their careers and don’t say, ‘Thank God it’s Friday.’ They don’t say defeatist things like, ‘You’ll always have a car payment,’ or ‘The little man can’t get ahead,’ because they started with nothing—they are the little man! And they are proving every day that you can live on less than you make, and you can build wealth in America today. It takes them an average of 17 years from the time they start their plan to reach a net worth of $1 million. Most of the data sources we find indicate there are over 23 million millionaires in the United States today.
All this data tells us clearly that you have every reason to hope that you, too, can build a good level of wealth in our country today. And yet, normal in America is broke. In the most prosperous society in human history, people are making money and they’re broke.
Fifty-five percent of people who have debt say they lose sleep over it. The average new car payment is over $700. Most people have had student loan debt so long they think it’s a pet. Credit card debt is over $1.14 trillion. The number one cause of divorce is money stress and money fights. Normal is making money and broke. Normal sucks. Time to change. Time for some new habits and principles. Time to try doing what millionaires do. Here are five things you can take right now.
1. Get on a budget
You need a detailed, written plan for your monthly spending. Check out our EveryDollar budgeting app for help.
2. Get out of debt
Your most powerful wealth-building tool is your income, so stop giving it to credit card and car companies in the form of monthly payments.
3. Live on less than you make
Pay cash. If you can’t pay for it with cash, you can’t afford it. You are not in Congress. You can’t spend more than you make and win.
4. Give money away
Be generous. Be a good tipper. Help others.
5. Save money
Build an emergency fund because you will have emergencies, and they will become debt if you don’t. Invest in your Roth IRA or 401(k) in good mutual funds EVERY month.
You work too hard to be broke. Personal finance is 80% behavior and 20% head knowledge. I am positive the American Dream is not dead because I meet people just like you every day who have overcome unbelievable challenges to build wealth. It’s time for a change.
Don’t wait on the White House to fix your house. Don’t wait on the sidelines of your own life any longer.
You have every reason to have hope in—and work for—the American Dream.
Take Control of Your Money: Author Dave Ramsey invites you to join him, George Kamel, Rachel Cruze and Jade Warshaw for the free Take Control of Your Money livestream event January 23 at 7 p.m. CST. You’ll learn, step by step, how to do what millionaires do so you can stop living paycheck to paycheck, create breathing room in your budget and finally start building wealth. You work too hard to feel this broke. It’s time to take action!