Speaker 1: Everybody's trying to fix their finances with a math formula,
Speaker 1: and if you were doing math, you wouldn't be in
Speaker 1: credit card debt. Hey everyone, welcome back to On Purpose,
Speaker 1: the number one health podcast in the world. Thanks to
Speaker 1: each and every single one of you that come back
Speaker 1: every week to listen, learn and grow. Now you know
Speaker 1: that I'm on a mission to serve you and help
Speaker 1: you build incredible lives three sixty degrees. And one of
Speaker 1: those things is to focus on areas where I can
Speaker 1: bring in experts who have incredible insight, research and years
Speaker 1: of experience so that I can share that with you.
Speaker 1: And this person is someone who have followed for a
Speaker 1: long time. He's someone that I've wanted to have on
Speaker 1: the show for a long time. I feel extremely honored
Speaker 1: and grateful to introduce our guest today, who is none
Speaker 1: other than Dave Ramsey, an eight time number one national
Speaker 1: best selling author, personal finance expert and host of The
Speaker 1: Ramsey Show, heard by more than twenty three million listeners
Speaker 1: each week. If you have not subscribed already, make sure
Speaker 1: you do. He's appeared on Good Morning America, CBS Mornings,
Speaker 1: Today's Show, Fox News, CNN, Fox Business, and many more.
Speaker 1: Since nineteen ninety two, Davis help people regain control of
Speaker 1: their money, build wealth, and enhance their lives. He also
Speaker 1: serves as the CEO for the company Ramsey Solutions. Welcome
Speaker 1: to the show, Dave Ramsey, and today we're talking about
Speaker 1: his new book, Baby Steps Millionaires, which I highly recommend
Speaker 1: you go and grab a copy of. We'll have the
Speaker 1: link to order it in the caption and in the comments. Dave,
Speaker 1: Welcome to the show. Wow, I'm on the Jay Shetty Show.
Speaker 1: This is awesome, ma'am. You're a big deal. Thank you
Speaker 1: for having me. It's the other way around for me
Speaker 1: to me you're the big deal. So I feel really
Speaker 1: grateful that you said yes. And you know, for me,
Speaker 1: supporting my community having great financial health is a really
Speaker 1: important part of my mission. And who better to go
Speaker 1: to than news, So you know, I'm really grateful that
Speaker 1: I get to connect my community with you. I'm sure
Speaker 1: many of them are ordery listeners anyway. But Dave, you know,
Speaker 1: let's let's start learning a bit more about you and
Speaker 1: your journey. I want to hear about when Dave wasn't
Speaker 1: the financial expert that he is, Like, what were your mindsets?
Speaker 1: What was your relationship like with money, when it wasn't
Speaker 1: where it is today. I grew up in a household
Speaker 1: of entrepreneurs, and so they taught us that you can
Speaker 1: do it. All you've got to do is leave the cave,
Speaker 1: kill something, and drag it home. I mean, there's that
Speaker 1: you can go out there and make something in this world,
Speaker 1: and that the free enterprise system is not broken, and
Speaker 1: it's tough, it's hard, but you can do it. And
Speaker 1: so I believe that, and I still believe it. And
Speaker 1: I went and got my real estate license when I
Speaker 1: turned eighteen, and when I graduated from college, I started
Speaker 1: buying and selling real estate, and starting from nothing, I
Speaker 1: got rid, at least by a kid from Antioch, Tennessee standards.
Speaker 1: I ended up with about four million dollars with a
Speaker 1: real estate and a little over a two million dollars
Speaker 1: or a little over a million dollars net worth. I
Speaker 1: was making a couple of hundred thousand dollars a year now,
Speaker 1: that's in nineteen eighty two, twenty thousand bucks a month
Speaker 1: from the neighborhood I grew up in that's called rich,
Speaker 1: and so we were having a blast. But I'd borrowed
Speaker 1: too much money. And the short version of the story
Speaker 1: is the bank got sold to another bank. They called
Speaker 1: our notes. We were doing flip this house before Chip
Speaker 1: and Joanna were born, and so you know, we the
Speaker 1: bank called our notes, and we spent the next two
Speaker 1: and a half years of our life losing everything we owned.
Speaker 1: We were sued and foreclosed on, and with a brand
Speaker 1: new baby and a marriage hanging on by a thread,
Speaker 1: we had the opportunity to start over after bankruptcy, and
Speaker 1: it was it was brutal. It was brutal, It was
Speaker 1: gut wrenching, it was life defining, and it was at
Speaker 1: the time the worst thing that had ever happened to
Speaker 1: me at all, the worst trauma to not be able
Speaker 1: to keep your word, to your integrity, just crushed by
Speaker 1: your stupidity, and it was I come from an honor culture,
Speaker 1: and it's just it's a horrible thing. And so obviously,
Speaker 1: now thirty years later, I realized it's the best thing
Speaker 1: that ever happened to me because I learned a whole
Speaker 1: new way of looking at money. I realized that borrowing
Speaker 1: money was a bad plan. And we've since been able
Speaker 1: to put lots of data to that, and millions of
Speaker 1: lives to that idea, that the idea of if you
Speaker 1: don't have any payments, you've got money and you can
Speaker 1: build some wealth. And so we began a debt free
Speaker 1: life at twenty eight years old and I'm sixty two,
Speaker 1: so it's worked out pretty well. That's incredible, Dave. I mean,
Speaker 1: as you said, you've been talking to people about their
Speaker 1: money for thirty years on the Ramsey Show. You've given,
Speaker 1: you know, help so many people over those decades. Are
Speaker 1: you hearing new financial problems today or is it the
Speaker 1: same ones repeated over and over again. Is there a
Speaker 1: new challenge, a newish or are we stuck in a
Speaker 1: similar mindset over the last three decades. There's the problem
Speaker 1: and then there's the symptom. The symptoms are always new.
Speaker 1: You know, a bitcoin I get rich opportunity, right, that's
Speaker 1: a new symptom. You know, There's been all kinds of
Speaker 1: symptoms pop up over the years that are different. There's
Speaker 1: a period of time where credit card debt was the
Speaker 1: most awful thing on the planet. Then there was a
Speaker 1: period of time where student loans are the most awful
Speaker 1: thing on the planet. And you know, the thing that
Speaker 1: is holding down the middle class, the thing, there's crushing
Speaker 1: families and these kinds of things. And then there was
Speaker 1: a period of time in two thousand and eight when
Speaker 1: the mortgages were failing and the real estate market failed,
Speaker 1: and so we've seen all these things, but they're basically
Speaker 1: those are all symptoms and underlying all of that, again
Speaker 1: it very similar to your insights, is the idea that
Speaker 1: principles have been violated. When you violate principles, you're going
Speaker 1: to get these symptoms. They'll have all kinds, are different
Speaker 1: colors and looks to them, but they're the same root cause. Dave,
Speaker 1: you know you've talked about this a lot through your book,
Speaker 1: through your work, through a number of your books, about
Speaker 1: how we don't really get educated on these ideas in school,
Speaker 1: and you must find it shocking that across thirty years
Speaker 1: that hasn't massively changed. What is it that you think
Speaker 1: we're missing out on at school? What are the key
Speaker 1: principles as you were mentioning that you need to learn
Speaker 1: at school, or that you need to learn to start
Speaker 1: so that you can have a healthy relationship with your
Speaker 1: finances and money. Well, there's a level of mythology that
Speaker 1: has been spread about money in our culture, that was
Speaker 1: spread with an agenda. Frankly, it was all if I
Speaker 1: was a bank, I would teach everyone that they needed
Speaker 1: a credit score. And the reason I would teach them
Speaker 1: they need a credit score, and the way to get
Speaker 1: a credit score is to borrow money from me and
Speaker 1: pay it back to me so that you can raise
Speaker 1: your score. So you can borrow money from me, so
Speaker 1: you can pay it back to me, so you can
Speaker 1: raise your score. So you can borrow money from me,
Speaker 1: so you can pay it back to me, so you
Speaker 1: can raise your score. It's a great plan if you're
Speaker 1: a bank. And so, but then it was put out
Speaker 1: there that now the FCO score is like biblical truth
Speaker 1: or something, and it's not. It was a it's a
Speaker 1: banking program to get people to borrow money. But now
Speaker 1: and so what's happened with some financial literacy programs in
Speaker 1: schools is that they're going to teach you to build
Speaker 1: your FICO score because that's been accepted now as norm
Speaker 1: rather than as rather than actual fact. Well, it's accepted
Speaker 1: it's fact, even though it's not a fact. And so
Speaker 1: what we've done is what we have. I mean, our
Speaker 1: antidote would be to say, okay, we're gonna teach people
Speaker 1: to live on a budget and how to do a budget.
Speaker 1: We're going to teach them to live on less than
Speaker 1: they make, concept Congress can't grasp. We're gonna teach them
Speaker 1: to to be generous, outlandishly generous, and we're gonna teach
Speaker 1: them to save and invest in the power of compound interest.
Speaker 1: And these things are agnostic to the banking community, and
Speaker 1: so we don't have to infiltrate the lending community and
Speaker 1: the people the pieces of the financial industry that have
Speaker 1: an agenda into this curriculum. But basically, a lot of
Speaker 1: teachers have been indoctrinated by the culture that this is
Speaker 1: the way you have to live. You're always going to
Speaker 1: have a car payment, you have to have a credit card,
Speaker 1: you can't be a student without a student loan, and
Speaker 1: then they bring that into the classroom because they personally
Speaker 1: have been taught this. But when you back it out
Speaker 1: and say, well, the teaching is with an agenda, then
Speaker 1: you have to stop and go there's a villain in
Speaker 1: this story. And so instead we need to be teaching
Speaker 1: the basic premise of common sense. And the good news
Speaker 1: is we've actually gotten our high school curriculum, and about
Speaker 1: forty eight percent of the high schools in America so far.
Speaker 1: So we're waking up a few people here and there.
Speaker 1: We're causing a bit of a ruckus, But certainly the
Speaker 1: banks and those kinds of folks are not happy about
Speaker 1: that because we're teaching people not to borrow money. I
Speaker 1: actually had that experience. So I grew up in a
Speaker 1: house where my parents never wanted us to be in debt,
Speaker 1: So I didn't even know what a credit card was,
Speaker 1: quite frankly, growing up, and we only ever used debit cards.
Speaker 1: And so when I moved to the United States from
Speaker 1: London and I went to buy a car, they wouldn't
Speaker 1: give it to me because I didn't have a credit score.
Speaker 1: Now I had enough money to buy that car, maybe
Speaker 1: ten twenty times if I wanted to, but they wouldn't
Speaker 1: let me because I didn't have the credit score. And
Speaker 1: so I had to get into this habit of building
Speaker 1: up that credit score in the same way. And that
Speaker 1: was massively different for me because I just never been
Speaker 1: in that mindset. So when you say that, it resonates
Speaker 1: with me very strongly because I just couldn't imagine ever
Speaker 1: feeling like I owed people well that I was buying
Speaker 1: things with money that wasn't mine because of the way
Speaker 1: I'd been raised around it. I mean, what's the craziest
Speaker 1: financial situation that you've ever heard on the show? Like,
Speaker 1: what's something that really blows your mind? And you go,
Speaker 1: and this is crazy For Dave Ramsey, the line that
Speaker 1: we always use, and it's true, is I haven't borrowed
Speaker 1: money in thirty years, so I don't have a credit score.
Speaker 1: Mine's undeterminable or zero. And so the joke is and
Speaker 1: it's it's the truth. If I go down to her
Speaker 1: local apartment complex and there's a sweet little twenty six
Speaker 1: year old apartment manager that is corporate has told her
Speaker 1: what to do, and they require a FICO score to rent,
Speaker 1: I can't rent an apartment there. Now, I'm a multi millionaire.
Speaker 1: I can write a check and buy the complex, but
Speaker 1: I can't rent an apartment there. Now, that's that's just
Speaker 1: as and I that's just ridiculous. And so that that
Speaker 1: illustrates the absurdity of this as far as the crazy
Speaker 1: stuff on the show. Oh my goodness, I mean we
Speaker 1: do we do three hours a day for twenty for
Speaker 1: thirty years. Now, I mean it's We've had crazy on
Speaker 1: parade at times. And the thing I have to try
Speaker 1: to do laugh because I've done so many stupid things.
Speaker 1: I've got a pH d in d unb was when
Speaker 1: somebody calls with something stupid, we just laughed together. I mean,
Speaker 1: I'm not shaming them, but oh my gosh, I mean
Speaker 1: people with it just I mean I had a guy
Speaker 1: with a million dollars in credit card debt one time.
Speaker 1: How do you do that? I mean that was like
Speaker 1: a full time job to pull that off. And we've
Speaker 1: had lots of people with hundreds of thousands of dollars
Speaker 1: or student loan debt and they just get themselves in
Speaker 1: all kinds of stuff. And so, you know, you get
Speaker 1: stupid on steroids and it just explodes, It gets exponential,
Speaker 1: and it's really you know, it's it's crazy humorous because
Speaker 1: it's so absurd. But you know, also while you're talking
Speaker 1: to him, it's just sad because they're completely trapped and
Speaker 1: how am I going to get this? Uh, this young
Speaker 1: dentist that's in one of our documentaries, it's got a
Speaker 1: million in student loan debt and how am I gonna?
Speaker 1: How am I gonna help him get out of that. Oh,
Speaker 1: it's just heartbreaking. Yeah, I mean those stories as you said, like,
Speaker 1: I love that you create this open, welcoming space for
Speaker 1: people to feel heard, feel seen, and like you said,
Speaker 1: we've we've all made mistakes. But then at the same time,
Speaker 1: I really how you give very specific strategic advice for
Speaker 1: people to get out of those places. Now, your new book,
Speaker 1: Baby Steps Millionaire, like what I really love about and
Speaker 1: what I want to do on this podcast because I
Speaker 1: want to kind of touch on each of the chapters
Speaker 1: because whenever someone has a book out and I deeply
Speaker 1: value books. Books have changed my life. I believe they
Speaker 1: absolutely transformative. They start incredible journeys. I believe yours is
Speaker 1: going to do this for so many people. It already has.
Speaker 1: But with this book, your first chapter is called can
Speaker 1: Anyone Be a Millionaire? And I think a lot of
Speaker 1: people grow up with the feeling that they will never
Speaker 1: be one. They're not planning for that, and they don't
Speaker 1: even think about that. I would say that I grew
Speaker 1: up with that mindset too, because of the family that
Speaker 1: I was raised in and the people I was raised around.
Speaker 1: Tell us a bit about that question and why you
Speaker 1: take the approach you do to that. Answering that question, well,
Speaker 1: it's an important place to start because it's one of
Speaker 1: the reasons we wrote the book. We've got a group
Speaker 1: of in America I call them hope stealers, who are
Speaker 1: saying that it's impossible to win. Now, it's impossible to win.
Speaker 1: There's too many systemic problems, there's too many things that
Speaker 1: are broken in the culture and in the economy that
Speaker 1: the little it's the ultimate line, the little man can't
Speaker 1: get ahead thing. And yet I kept running into millionaires
Speaker 1: everywhere who were first generation. They started with nothing, they
Speaker 1: did not inherit their money. And then I started running
Speaker 1: into them that have followed our baby steps. That's why
Speaker 1: we named it baby Steps millionaires that became millionaires. And
Speaker 1: so I thought, I've got this, all this data and
Speaker 1: anecdotal evidence both on one side that it is possible,
Speaker 1: and I've got these hope steelers out here telling people
Speaker 1: they can't do it and stealing their hope. And so
Speaker 1: I thought, well, you know, the first thing we got
Speaker 1: to do is we have to fix that. Because it's
Speaker 1: the old Henry Ford line. If you think you can
Speaker 1: or you think you can't, you're probably right. And so
Speaker 1: you know you have to. And I'm if I think
Speaker 1: I can be in the NBA, I'm wrong. I can't. Okay,
Speaker 1: there's a chance I don't have the physical skills. I'm
Speaker 1: an old guy with a pot belly. It's not happening, right,
Speaker 1: So that's ridiculous. But when it comes to overtime, can
Speaker 1: I have a successful marriage even though maybe in your
Speaker 1: past there's not one in your family tree? Over time?
Speaker 1: Can I raise good kids even though in most of
Speaker 1: your family tree no one turns out? Can you break
Speaker 1: that chain? And if you don't believe you can, you
Speaker 1: won't take the steps to do the hard work to
Speaker 1: be successful in that area, that compartment the department of
Speaker 1: your life. And money's no exception to that. And money's
Speaker 1: particularly weird in the spiritual in that in this area
Speaker 1: of belief, because it just it will run from you.
Speaker 1: You can't catch it. You know, if you don't believe,
Speaker 1: because you won't do that, you won't do the sacrificial things.
Speaker 1: You won't live like no one else so that later
Speaker 1: you can live and give like no one else. There's
Speaker 1: no reason a farmer would ever go out and toil
Speaker 1: in the sun and plow the field and get the
Speaker 1: stumps out and the rocks out and then put corn
Speaker 1: in the ground. If he didn't think corn was going
Speaker 1: to come up after he did that, that would be absurd.
Speaker 1: Only a crazy person would do something that they don't
Speaker 1: think is going to turn out. And so you have
Speaker 1: to believe first. And so what we try to do
Speaker 1: is we try to bring emotional behavior data of other
Speaker 1: people and math and any kind of a lens I
Speaker 1: can get you to look through to make you believe
Speaker 1: that you can do it. I know you can do it,
Speaker 1: but I've got to convince you you can do it
Speaker 1: before we can move into the tactical steps. Yeah, and whatever.
Speaker 1: Some of those what would you say the mindsets or
Speaker 1: the traps that keep people broke where you are having
Speaker 1: to convince people that they can What are those things
Speaker 1: that keep us in that mindset? I think we become
Speaker 1: number one who we hang around with, there's any question
Speaker 1: about that. So you have to be careful, uh. And
Speaker 1: I'm not talking about being snobbish to someone. We're not.
Speaker 1: I'm nice to anybody. I'll talk to anybody about any
Speaker 1: I'm happy. But I'm talking about your crew, the people
Speaker 1: that are your inner circle. Who do you hang with
Speaker 1: your income is going to approximate. There's over time, your
Speaker 1: physical condition. If they if they're all overweight, you're gonna
Speaker 1: be overweight. If they take if they take care of
Speaker 1: their bodies, you're gonna take care of your body. If
Speaker 1: they have good marriages, you're gonna good married you. You're
Speaker 1: going to become who you hang around. You even gonna
Speaker 1: have an accent like they do, you know, and you're
Speaker 1: gonna read the books that they read. And so number one,
Speaker 1: you need to get yourself in a community of people
Speaker 1: who are achievers, who believe it can be done, who
Speaker 1: understand it's tough, and I'll encourage you when you're having
Speaker 1: a hard one game. I mean some of us have
Speaker 1: had a hard couple of years here, A lot of
Speaker 1: us have, you know. And so you gotta have guys
Speaker 1: and gals in your corner that say, golf champ, you
Speaker 1: got this, you can do it. I got your back, man.
Speaker 1: And so that's so much different than growing up in
Speaker 1: a neighborhood where my parents were saying you can do this,
Speaker 1: but a lot of kids I ran around with their
Speaker 1: parents were saying, well a little man can't get ahead.
Speaker 1: You're always going to have a car payment. You're stuck.
Speaker 1: People like us, you know, people that have a Southern accent.
Speaker 1: They're Hillbillies and rednecks. We don't get ahead. We just
Speaker 1: we just we just uh, you know, give the middle
Speaker 1: finger salute to the man and we move on. And
Speaker 1: you can do that from any racial background, any cultural background.
Speaker 1: There's a group of people that that declare themselves stuck.
Speaker 1: Then there's also a group of people within that same
Speaker 1: community and that same tribe. It's a smaller group that
Speaker 1: declare that it's possible to be free, it's possible to prosper,
Speaker 1: it's possible, and it's victims or victors. And the neat
Speaker 1: thing is that once you begin to kind of get
Speaker 1: that inside of you, anyone can just make that choice.
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Speaker 1: percent off Masterclass. I think you're spot on. I think
Speaker 1: you're absolutely right, And you know, I know what that
Speaker 1: feels like, because that's the culture I grew up in.
Speaker 1: I grew up around that culture that didn't believe and
Speaker 1: that often saw money as evil or we always believe
Speaker 1: that people who had money must have done something sketchy
Speaker 1: to get it, or they weren't really living a life
Speaker 1: of integrity. And so that was the mindset that was
Speaker 1: built up for a long long time that had to
Speaker 1: be massively unlearned and unraveled. And I wish I had
Speaker 1: you at that time. I didn't, but you know, I'm
Speaker 1: glad that we do today. I think you mentioned spiritual
Speaker 1: and belief. And what I really appreciated about the book
Speaker 1: is the book is filled with knowledge about how to
Speaker 1: handle your finances, but at the same time, it has
Speaker 1: Bible verses that can enlighten the readers too. And I
Speaker 1: wanted to ask you that, why did you think it
Speaker 1: was important to talk about the Bible and you know,
Speaker 1: the Word of God as well as talking about finances,
Speaker 1: Like what was the reasoning behind that? I was fascinated
Speaker 1: by that. Yeah, that's always sometimes it's off putting for
Speaker 1: some folks, obviously, and so I try not to be
Speaker 1: over the top. It's not a Christian manual on finance,
Speaker 1: but the Books of Wisdom in particular, or the Proverbs.
Speaker 1: It can be applied regardless of your faith, regardless of
Speaker 1: your background or your belief system. Wisdom's wisdom. I've been
Speaker 1: Franklin said something, you know, it's okay, you can you
Speaker 1: can kind of look at that. I think that's possible, right,
Speaker 1: And he's not in the Bible, But I mean, you
Speaker 1: see what I'm saying. So, but what we've discovered about
Speaker 1: personal finance, and I discovered this years and years ago
Speaker 1: the hard way I kept when I was doing counseling
Speaker 1: and coaching with people when I very first started, I
Speaker 1: would go in and fix all of their budget and
Speaker 1: negotiate with their creditors a set of payments that would
Speaker 1: fit within their income. And they were about to file bankruptcy,
Speaker 1: but we stopped their foreclosure. We got them on a
Speaker 1: plan with their bank and were right on the edge.
Speaker 1: We pulled them back from the edge and said, Okay,
Speaker 1: now work this plan, and then I would see them
Speaker 1: six weeks later. I'd say, how's the plan going? We
Speaker 1: file bankruptcy? What I did ninety hours of work to
Speaker 1: get that to where it would? What do you mean
Speaker 1: you file bankruptcy? And I started realizing it wasn't math.
Speaker 1: Math wasn't the problem. The problem with my money is
Speaker 1: the guy I shave with. If I can get that
Speaker 1: guy to behave he can be skinny and rich. Oh
Speaker 1: my gosh, he's a problem. And so we start realizing
Speaker 1: personal finances eighty percent behavior, only twenty percent head knowledge
Speaker 1: and behavior is a spiritual thing. I'm an evangelical Christian,
Speaker 1: so for me, I immediately gravitate to the Bible as
Speaker 1: a spiritual instruction. And there's twenty five hundred scriptures dealing
Speaker 1: with money. So whether you're a Christian or not doesn't
Speaker 1: matter to me. The reason I'm bringing that up is
Speaker 1: it's an indication of This is a set of behaviors
Speaker 1: and a set of views, a set of beliefs, a
Speaker 1: spiritual walk that influences your behavior, and your behavior creates
Speaker 1: your outcome. It's everybody's trying to fix their finances with
Speaker 1: a math formula. And if you were doing math, you
Speaker 1: wouldn't be in credit card dat Yeah, well said, and
Speaker 1: I'm so happy that you do that as well. I
Speaker 1: know you know from my work the traditions I studied.
Speaker 1: Spiritual traditions is such big inspirations to me, and I
Speaker 1: find so much validity and timelessness in how they apply
Speaker 1: to today's modern day challenges. Dave the chapter two and
Speaker 1: chapter three to talk about what a baby steps millionaire
Speaker 1: is and how to become one. Can you define to
Speaker 1: us the difference between a millionaire and a baby steps millionaire,
Speaker 1: because I think this is something that a lot of
Speaker 1: people struggle with. Well, first, it's good to just say
Speaker 1: the definition of a millionaire is not a Dave Ramsey definition.
Speaker 1: This is an accounting definition. Personal finance has been taught
Speaker 1: for decades before I was born. This is a it's
Speaker 1: a math formula. It's a very simple formula. Assets minus
Speaker 1: liabilities equals net worth. What you own minus what you
Speaker 1: owe equals your net worth. When you're worth is one
Speaker 1: million dollars or greater? When what you own minus what
Speaker 1: you owe is one million, or you're a millionaire. Well,
Speaker 1: I don't feel like a millionaire. It's not a feeling.
Speaker 1: I don't believe anybody out to be a millionaire. It's
Speaker 1: not a moral construct. I don't think that's enough. It
Speaker 1: might not be, but it's still a million. It's still
Speaker 1: what's there. This is a math formula and when you
Speaker 1: reach that. The way you're a billionaire a thousand million
Speaker 1: is if your assets minus your liabilities. It's not your income.
Speaker 1: You can make a million dollars a year and not
Speaker 1: be a millionaire. You can make thirty thousand dollars a
Speaker 1: year and be a millionaire. So it's a it's a
Speaker 1: net worth, balance sheet transaction. It's an accounting function. It's
Speaker 1: not up for negotiation. Now we can discuss all kinds
Speaker 1: of things about what a million is and whether it's enough,
Speaker 1: and the moral construct around it, those kind of that's
Speaker 1: a that's a fair discussion to have, but first you
Speaker 1: got to admit and just say that is a millionaire.
Speaker 1: I just don't feel I don't care you are a millionaire.
Speaker 1: You know, I talk to a guy a day on
Speaker 1: my show. He just paid off his house and it's
Speaker 1: worth nine hundred thousand dollars and it's gone way up
Speaker 1: in value. He's out of Denver and the market shot
Speaker 1: way up, and he goes, it doesn't I don't feel
Speaker 1: like a millionaire because he got several hundred thousand in
Speaker 1: his four oh one case, so he's got a net
Speaker 1: worth of a million dollars. I say, it's not a feeling,
Speaker 1: and he goes, I don't feel like I earned it.
Speaker 1: It doesn't matter. I don't care where you got it.
Speaker 1: It's still a million. It's still that's you got to
Speaker 1: really get back to that. So once we do that,
Speaker 1: then we say, all right, now, then where do millionaires
Speaker 1: come from? And several years ago we did the largest
Speaker 1: study of millionaires ever done in North America. My friend
Speaker 1: Tom Stanley, who's passed away now, did a book in
Speaker 1: nineteen ninety two called The Millionaire next Door, and he
Speaker 1: studied millionaires in nineteen ninety two, many years ago, and
Speaker 1: his sample size and the research was seven hundred and
Speaker 1: fifty millionaires, and the people who did not like the
Speaker 1: conclusions of his study used the sample size to criticize
Speaker 1: and say it wasn't valid. Now, those of us that
Speaker 1: no statistics know that's a would samplicize that that you
Speaker 1: know that that's it fits the numbers. But so we
Speaker 1: decided as a pr part of the study to do
Speaker 1: seventy five hundred millionaires ten times what was necessary to
Speaker 1: be statistically significant. Seven or fifty is statistically significant, and
Speaker 1: then we just went overboard and ended up doing ten thousand,
Speaker 1: one hundred and sixty seven before we were done. So
Speaker 1: we've we've done the largest study. And here's what we found.
Speaker 1: Seventy nine percent of America's millionaires airtight research data. Not
Speaker 1: a feeling, not a political agenda, not your broke brother
Speaker 1: in law's opinion at Thanksgiving, not how he feels about
Speaker 1: rich people, none of this data. Seventy nine percent inherited
Speaker 1: precisely zero wow, eight out of ten. Five percent more
Speaker 1: inherited a small amount like fifteen hundred dollars or five
Speaker 1: thousand dollars mathematically could not have possibly made them a millionaire.
Speaker 1: Another five percent inheritance substantial money like one hundred thousand,
Speaker 1: two hundred thousand dollars after they were already millionaires. So
Speaker 1: five and five and seventy nine, we're at eighty nine percent,
Speaker 1: nine out of ten of America's millionaires did not become
Speaker 1: millionaires because of an inheritance. Wow, so that's a millionaire.
Speaker 1: And I'm running into these guys everywhere in thirty years
Speaker 1: of doing this, and it's screaming at me, this is possible.
Speaker 1: And they're not rocket scientists, they're not rock stars. They're
Speaker 1: not one percent of the millionaires in America. You would
Speaker 1: know their name, meaning that they're on TV, or they're
Speaker 1: a rock star, or there an NBA or MLB or something.
Speaker 1: You know, they're in that. But one percent, ninety nine
Speaker 1: percent or a teacher and a policeman, you know, and
Speaker 1: they're number one category or number one career was engineered.
Speaker 1: So then we started hearing from people. I've been teaching
Speaker 1: this stuff for thirty years, getting people out of that,
Speaker 1: getting them on a budget so that they can invest
Speaker 1: in their four one case so they can pay off
Speaker 1: their house. And they were following our baby steps and
Speaker 1: becoming millionaires. So we had first generation millionaires everyday millionaires,
Speaker 1: we called them. And then we had millionaires that had
Speaker 1: become millionaires following our process, and that process is called
Speaker 1: the baby steps. So that's it's a nuanced subset of
Speaker 1: what a millionaire is too much talk. But that's the deal,
Speaker 1: not too much talk at all. That was brilliant. I'm
Speaker 1: so glad you went there, not too much talk at all.
Speaker 1: I think, you know, that's fascinating, first of all, the
Speaker 1: fact that you did to study. Second of all, I
Speaker 1: think when you hear that, everyone's just surprised because you
Speaker 1: just assume that everyone is a millionaire is either a
Speaker 1: you know, a tech founder, or a celebrity or a musician.
Speaker 1: And you know, I think we have perceptions, as you
Speaker 1: rightly said earlier, around wealth. What are some of those
Speaker 1: key steps If someone's in their twenties right now or
Speaker 1: in their thirties and they're like, I want to be
Speaker 1: a baby steps millionaire. I don't want to walk through
Speaker 1: the seven steps, because I know they're beautifully laid out
Speaker 1: in the book. What are some of the first things
Speaker 1: that they need to start thinking about, Dave, let's go
Speaker 1: back to and say out loud, the tech person or whatever.
Speaker 1: The stuff we're teaching will not make you a billionaire.
Speaker 1: It won't do it mathematically, It won't. These were millionaires
Speaker 1: one to ten million dollars worth of net worth, okay,
Speaker 1: and so these are that's a lot of money, but
Speaker 1: it's not a billion These people don't have private jets,
Speaker 1: they don't have six houses, they don't have a Lamborghini.
Speaker 1: Those are billionaires that have that. And a lot of
Speaker 1: those are people that are household names, the Gates or
Speaker 1: the Buffets or whatever that kind of thing. And that's
Speaker 1: but that's a different world. In this world, the way
Speaker 1: to get the first one to ten million ends up
Speaker 1: being eighty percent of them, a little about eighty three
Speaker 1: percent of them had two things that showed up almost
Speaker 1: every time. Number One, they funded their four oh one
Speaker 1: k in good mutual funds and their roth iras and
Speaker 1: good mutual funds over an extended period of time twelve
Speaker 1: to seven ten years. That's not that long, but that
Speaker 1: was long. It's longer than five minutes. And let's not
Speaker 1: get rich quick. It's the tortoise, not the hair. So
Speaker 1: twelve to seventeen years during that time, the average millionaire
Speaker 1: paid off their home in ten point two years. And
Speaker 1: so what we've got is we've got a guy that's
Speaker 1: our a gal that's got a million five net worth
Speaker 1: and they of it as in there is a five
Speaker 1: hundred thousand dollars paid for home and a million dollars
Speaker 1: in their retirement accounts. And that's almost all it was.
Speaker 1: Those two things. You know, the power of compound interest,
Speaker 1: building up your emergent are, building up your mutual funds,
Speaker 1: winning in your four oh one K. And just steady, steady, steady,
Speaker 1: never stopping, never panicking when the markets down. Just steady, steady, steady, steady.
Speaker 1: Just keep doing it, Just keep doing it, Just keep
Speaker 1: It's boring. It's not sexy at all. You're not gonna
Speaker 1: be on the cover of Fast Company magazine, you know,
Speaker 1: paying off your mortgage. Nobody knows you did it. It's
Speaker 1: just kind of But here you sitting with a paid
Speaker 1: four house and a million buck, I think you're gonna
Speaker 1: be okay. So that's what most of them did. A
Speaker 1: few of them were farm millionaires, large enough to be
Speaker 1: to mention here, meaning that they not inherited. But they
Speaker 1: were a farmer that bought land, and then they bought
Speaker 1: more land, and then they bought more land, and that
Speaker 1: land in and of itself became worth over a million dollars.
Speaker 1: That wasn't that unusual. We saw several of those as well.
Speaker 1: But what we discovered was process people are the ones
Speaker 1: that did this. Whether they were baby steps millionaires or
Speaker 1: just millionaires. And so the number one career was engineer,
Speaker 1: Number two was accountant, Number three was teacher, Number three
Speaker 1: was teacher, number four was an executive, and number five
Speaker 1: was a lawyer. Mds didn't even make the top five.
Speaker 1: Medical doctors made number six. And now if you count
Speaker 1: even the mds, if you count every one of those, okay, engineer, accountant, teacher, executive,
Speaker 1: and lawyer, every one of those are systems people. They
Speaker 1: believe a set of principles and when you follow those principles,
Speaker 1: you get a result. As you sow, so shall you reap?
Speaker 1: If you plant corn, don't be shocked, corn comes up.
Speaker 1: And every one of those it's a cause and effect
Speaker 1: world that they live in. They believe in systems. They
Speaker 1: believe in processes. Figure out the system, work the system.
Speaker 1: You build a bridge this way, it stays up. You
Speaker 1: do a lesson plan this way, the student learns. You know,
Speaker 1: every one of you know, there's a you follow us
Speaker 1: set of decorum and laws and processes. In court or
Speaker 1: the judge put you in jail for contempt, you have
Speaker 1: to and so all of these are processed people. So
Speaker 1: it turns out it's a process. You spoke with something
Speaker 1: really brilliant. It's not sexy, it's not quick, and it's
Speaker 1: not what it looks like on Instagram, on social media
Speaker 1: and the pictures. I feel like half the battle is
Speaker 1: building that discipline, muscle, that habit, that pattern of consistent focus.
Speaker 1: What is taking us away from that? How do we
Speaker 1: build that muscle? Because it sounds like to me, that's
Speaker 1: what's blocking us. We wanted to be sexy, we wanted
Speaker 1: to be fast, we wanted to look at said in
Speaker 1: wait and you're like, wait, wait, wait, it doesn't look
Speaker 1: like that at AOL. You know, I think it's disturbing.
Speaker 1: The wonderful things about social media are obvious. The wonderful
Speaker 1: things about the Internet are obvious. We're able to do
Speaker 1: this interview this way. It's obvious. It's a fabulous convenience
Speaker 1: and everything. The downside is is that we're creating generations now,
Speaker 1: even up into my old generation, of people who have
Speaker 1: the attention span of a gnat. I mean, they can't
Speaker 1: stick with anything, and in order to do something of greatness,
Speaker 1: it requires a steady application over a period of time.
Speaker 1: The old days of a craftsman going through years of
Speaker 1: apprenticeship in order to be world class at something. Now
Speaker 1: we want to just snap our fingers and instantaneously be
Speaker 1: able to do this because we carry this magic wand
Speaker 1: around in our hand that if we push stuff, push
Speaker 1: a button, stuff shows up on our porch. I mean,
Speaker 1: it's magic and anything we want you can do. You
Speaker 1: can get anything you want on this thing, very very quickly.
Speaker 1: It's you can't even have a good argument because you
Speaker 1: can get the answer to the problem out there. And
Speaker 1: you know, we used to sit around have fights at
Speaker 1: dinner and our family and argue about so whether somebody
Speaker 1: was right or not. Now somebody goes and looks on
Speaker 1: the internet and finds the answer and well, George's just wrong,
Speaker 1: Henry's right, you know. And it's just so this attention
Speaker 1: span thing is a problem, and really what that is
Speaker 1: underneath without shaming someone or trying to shame a whole generation,
Speaker 1: I'm not doing that, because there's people within each generation
Speaker 1: that don't do this or that break free from it.
Speaker 1: Is it's emotional maturity. The ability to delay pleasure is
Speaker 1: a sign of maturity. That's what grown ups do. Children
Speaker 1: do what feels good, Yolo, you only live once quick
Speaker 1: Instead of like I'm going to sacrifice to get a
Speaker 1: greater outcome. I'm gonna live like no one else so
Speaker 1: that later I can live and give like no one else.
Speaker 1: I've got to have the moment, at this moment that
Speaker 1: is a childish expression of any area of your life.
Speaker 1: It will destroy your marriage, it will raise horrible children,
Speaker 1: you know, it'll mess up your career, and it certainly
Speaker 1: will mess up your money. Short term thinking that get
Speaker 1: rich quick has never worked at any time in the
Speaker 1: world as an ongoing, provable, sustainable process. It's always and
Speaker 1: that's where the tortoise and the hair Esop's fable comes from, right,
Speaker 1: And so we gotta stick with this idea. And that
Speaker 1: even includes our generosity. You know, we were starting to
Speaker 1: talk about generosity, and the generosity with these folks, with
Speaker 1: these millionaires that we studied is a steady thing, like
Speaker 1: their savings is a steady thing. They're not trying to
Speaker 1: have this one big event that says, look at me,
Speaker 1: how generous I am. Instead, they're fairly quiet about it,
Speaker 1: almost absurdly quiet and anonymous about it, and they steadily
Speaker 1: give in to something that they believe in. If they're
Speaker 1: a Christian, they're going and giving a tithe at their
Speaker 1: local church. If they're Jewish, they might also be tithing
Speaker 1: at their synagogue. You know, regardless of your faith background,
Speaker 1: there's not a religious background on the planet that does
Speaker 1: not have a steady giving rhythm as a part of
Speaker 1: its teaching. Every one of them do, because it's how
Speaker 1: you build character. And when you're giving, it's almost impossible
Speaker 1: to not become grateful. And as you become grateful, the
Speaker 1: next thing that happens is you become more and more content.
Speaker 1: And the more content you are in a totally discontented culture,
Speaker 1: the great advantage you have to build wealth. Dave, that
Speaker 1: is such a fantastic answer. I love how we're talking
Speaker 1: about money, but we're talking about emotional maturity. We're talking about,
Speaker 1: you know, character and developing character and developing patients and
Speaker 1: developing discipline. And you told us earlier how you initially
Speaker 1: came to wealth the first time around, to what was
Speaker 1: considered rich where you were from the first time around.
Speaker 1: How emotionally and mentally prepared do we have to be
Speaker 1: to even be wealthy, Because we talked about the discipline
Speaker 1: and the postponing of pleasure before we get there, But
Speaker 1: then even when you get there, to stay there requires
Speaker 1: a different level of mental and emotional maturity. Talk to
Speaker 1: us a bit about that, because I think that's often undervalued.
Speaker 1: It's a different level of nobility, not in an aristocracy
Speaker 1: sense or a looking down on the little people's sense.
Speaker 1: That's not what I'm saying at all, But this idea.
Speaker 1: What happens is is the people that do this they
Speaker 1: grow into They may be in the acquisition mode early
Speaker 1: and as it goes along, but as the weight of
Speaker 1: the responsibility of the wealth starts to grow on them
Speaker 1: over time, it doesn't seldom happens quickly. Then it flips
Speaker 1: from acquisitions to servant to serving, and they see their
Speaker 1: wealth as an opportunity to serve your spouse. I can
Speaker 1: get her a nice car. I can serve my children.
Speaker 1: They can go to college and we can pay for it.
Speaker 1: I can serve my community and we can open a
Speaker 1: homeless shelter or fund to homeless shelter. I can serve
Speaker 1: the world at large. And the more you start to realize,
Speaker 1: then the more money you're managing, the more people you
Speaker 1: can help, because at a certain point that you can't
Speaker 1: ingest enough stuff. You know, if you eat an you know,
Speaker 1: and I was a kid growing up, I never had lobster.
Speaker 1: That was the red lobster came to town. It was
Speaker 1: a big deal, right, And if I got lobster with
Speaker 1: that drawn butter on my mouthwater and run. Now, if
Speaker 1: I got lobster with that drawn butter, you know, I
Speaker 1: thought that was rich people food. And so, you know,
Speaker 1: I thought rich people ate lobster all the time. And
Speaker 1: so once I had some money, I finally figured out
Speaker 1: if you eat enough lobster, it tastes like soap. You
Speaker 1: can't get enough cars to be okay. Winning does not
Speaker 1: heal you. Becoming wealthy doesn't heal you. It makes you
Speaker 1: more of what you already are. And if you gain
Speaker 1: wealth gradually and build the character as you're doing it,
Speaker 1: it will flip at some point and you will become
Speaker 1: a noble servant of your family, change your family tree,
Speaker 1: of your community. And that's really all money is good
Speaker 1: for after a certain point. I mean, again, you can
Speaker 1: have some nice things, and I'm not against having nice things,
Speaker 1: but your nice things I'll have you eventually they'll eat
Speaker 1: you alive. If that's where you think happiness is, because
Speaker 1: it's not. While winning does not heal you. That's definitely
Speaker 1: a powerful, powerful message for you know, each and every
Speaker 1: one of us to hear, especially because I think society,
Speaker 1: as you said earlier, has actually programmed that feeling is
Speaker 1: that if you win, you don't even well. Actually, we've
Speaker 1: been made to believe if you win, you don't even
Speaker 1: need a healing. We end up seeing these folks that
Speaker 1: are in the celebrity in the spotlight, whether sports figures
Speaker 1: or Hollywood figures or whatever, and they become mass civily
Speaker 1: successful within their craft and financially successful too. But they
Speaker 1: prove out the concept of what we just said. Their
Speaker 1: lives are a mess many times, and they didn't get
Speaker 1: what they hope to get from all of it. They
Speaker 1: didn't get healing, they didn't get a happiness, they didn't
Speaker 1: get wholeness, they didn't get contentment. Quite the opposite, because
Speaker 1: what money does is it's a magnifier. It makes you
Speaker 1: more of what you are. And so to the extent
Speaker 1: you our whole, it's gonna make you noble and serving.
Speaker 1: And to the extent that you are greedy, you're gonna
Speaker 1: be unbelievably greedy. To the extent you have a temper problem,
Speaker 1: you're gonna be a rage a hallock. I mean, you're
Speaker 1: gonna be more. If you're crazy, you're gonna get crazier.
Speaker 1: I mean, whatever it is, it makes you more. It
Speaker 1: magnifies whatever you are. And so it is a it's
Speaker 1: a powerful weapon. It's a powerful tool to be used,
Speaker 1: but it is very dangerous because it's a magnifier. Yeah,
Speaker 1: and that that links nicely to this really important question
Speaker 1: you ask and answer in chapter seven, which is will
Speaker 1: wealth ruin my kids? Right? I think that's a very
Speaker 1: common again misconception. It's a common question. And you talk
Speaker 1: about how sometimes parents actually wait too long to talk
Speaker 1: to kids about money because we kind of things like, oh,
Speaker 1: they're not gonna understand it, they're not gonna get it,
Speaker 1: they're not old enough yet. Talk to us a bit
Speaker 1: about why we have that fear that wealth will ruin
Speaker 1: our kids and how early can you start? And I
Speaker 1: know in the book you talk about the five behaviors
Speaker 1: to raise money smart kids, but maybe if you can
Speaker 1: just touch on one or two of them that you
Speaker 1: really feel is the right time to start and where
Speaker 1: to start. Well, if we go back to our earlier discussion,
Speaker 1: understand that handling money is eighty percent behavior. It's not different.
Speaker 1: And so in the sense that are we have to
Speaker 1: teach our children to behave we have to teach them
Speaker 1: to have discipline, self discipline. They don't have self control,
Speaker 1: that they're they're gonna be a horrible spouse, There're gonna
Speaker 1: be a horrible parent to my grandkid. If they don't
Speaker 1: have self control, they're not gonna be a good employee
Speaker 1: or a good boss, a good leader in their organization.
Speaker 1: And so they have to learn behaviors at home. And
Speaker 1: we can use money as one of the things we
Speaker 1: do that we use to teach them to have behaviors.
Speaker 1: And so one of the things we all had used
Speaker 1: on us and we used on our kids was, you know,
Speaker 1: you have to do your homework and you have to
Speaker 1: get good grades. Well, that's control, self control, and we're
Speaker 1: gonna we'll walk with you, we'll coach you, will help you.
Speaker 1: If you're struggling, we support you. But not doing it
Speaker 1: is not an option you're going to learn to do.
Speaker 1: You know, you have to brush your teeth. You're one't
Speaker 1: have teeth when you're old. You need to brush your teeth.
Speaker 1: That's a good thing. And so you can't just ignore this.
Speaker 1: You have to bathe because that way you'll get a
Speaker 1: spouse later and leave. And so you know you have to.
Speaker 1: We want to teach our kids these things, right, So
Speaker 1: money is the same way, and we teach them age appropriate.
Speaker 1: You know, when you pick up your toys in your
Speaker 1: bedroom and your three, what that really means is is
Speaker 1: that I picked up all your toys and you picked
Speaker 1: up two of them. But I'm gonna give you all
Speaker 1: the psychological and emotional credit and give you a high
Speaker 1: five as the best room cleaner that there ever was
Speaker 1: on the planet. Oh and I'm also going to give
Speaker 1: you a dollar bill to put in your piggy bank.
Speaker 1: Over here. I want to put your peet. I want
Speaker 1: to put that dollar bill on you because I want
Speaker 1: you to emotionally associate work with money. Work is where
Speaker 1: money comes from, and that's absolutely vital. And if you
Speaker 1: can do that, then then you get the ability to
Speaker 1: teach them to save and to spend wisely. You can participate.
Speaker 1: But I'm I'm gonna send a five year old to
Speaker 1: the salt mines. We're not doing that, you know, but
Speaker 1: but we are gonna. We're not when you're fourteen, you're
Speaker 1: gonna do some work, because if you wait till they're
Speaker 1: eighteen to start teaching work ethic, they don't know how
Speaker 1: to do anything. Yeah. And then then some poor soul
Speaker 1: is going to hire them later and they don't know
Speaker 1: how to work. Yeah. And so it's a gradual parenting
Speaker 1: as a gradual process, like so many good things in life.
Speaker 1: And so you know the idea that we're going to
Speaker 1: gradually teach them to work, give, save, spend. And if
Speaker 1: you can teach them to do those things age appropriately
Speaker 1: gradually over time, then they've got the character. They have,
Speaker 1: the the skeletal structure in their character, self control, self discipline,
Speaker 1: the ability to delay pleasure, the ability to set a goal,
Speaker 1: work towards a goal progressively, age appropriately and with some help,
Speaker 1: with some grace when they fall down, with some love,
Speaker 1: but not helicoptering in and saving them, let them, let
Speaker 1: them feel the pain of the of the struggle. It's
Speaker 1: good because that's where it all comes from. Man, you
Speaker 1: get a callous that way. And so then they're ready
Speaker 1: to manage money. Oh, by the way, the last step
Speaker 1: then is that they move from this is how money
Speaker 1: works to now it is a response ability. Money is
Speaker 1: a responsibility. You have to manage money for the good
Speaker 1: of others. You get to participate in some good things
Speaker 1: by managing it. But you're managing it for the good
Speaker 1: of your family, your kids, your grandkids. You're changing your
Speaker 1: family tree. And that's what I did, and that's why
Speaker 1: there's some for you in this inheritance. And a good
Speaker 1: man leaves an inheritance to his children's children Proverbs, and
Speaker 1: so we're going to do that. But you don't get
Speaker 1: that if it's going to harm you, and it would
Speaker 1: harm you if you don't have the scal little structure,
Speaker 1: the muscle tenue in this area to carry it. And
Speaker 1: so when you leave kids that were quote in the
Speaker 1: old days, we used to say so and so was
Speaker 1: a spoiled kid. If you have a spoiled kid and
Speaker 1: you leave them a bunch of money, well they're a
Speaker 1: reality show stared later. That's what they in. That's their
Speaker 1: only skill. And so they can't do anything, and it's sad.
Speaker 1: They're sad humans and they struggle and then they fall
Speaker 1: out down all over the place and everybody's watching them
Speaker 1: do it, and they do it big numbers around them.
Speaker 1: It's awful. And so instead what we want is we
Speaker 1: want you know, this is a family that is a
Speaker 1: family of service, and this money is a responsibility and
Speaker 1: if you view it that way, you will have the
Speaker 1: opportunity to manage it for the good of others and
Speaker 1: for the people of faith, for God, for the good
Speaker 1: of God. We're going to manage it for God's good.
Speaker 1: And so you know, you can have these kinds of
Speaker 1: ethereal discussions, but you had to built the built a
Speaker 1: character along the way. Yeah, what a what a fantastic
Speaker 1: and phenomenal Onza day because I made I did an
Speaker 1: activity recently where I sat down and I wrote down
Speaker 1: all the jobs I've had in my whole life, and
Speaker 1: I was writing down what I learned from each one
Speaker 1: of them. It was a really fun thing to do.
Speaker 1: And I realized that when I was fourteen, I was
Speaker 1: a paper boy in my area. So I delivered newspapers
Speaker 1: in my area and I got paid for it. And
Speaker 1: I remember all the other boys would go and throw
Speaker 1: the papers in the trash. So the organized they started
Speaker 1: giving me more money to do all their streets as well.
Speaker 1: And then I worked at Morrison's, which is our version
Speaker 1: of Walmart. It's a you know, a grocery store, and
Speaker 1: then and then I worked in retail, and you know,
Speaker 1: so on and so forth, and so in the last
Speaker 1: twenty years, I've had so many jobs since I started working.
Speaker 1: And you're so right that I remember paying for my
Speaker 1: first ever phone bill, paying for my car insurance, like
Speaker 1: my parents never paid for those things. I had obviously
Speaker 1: lived in their home and you know, was taking care
Speaker 1: of with shelter and food, but beyond that, any expenditure
Speaker 1: was personal. And I'm so grateful to them for that,
Speaker 1: because it set me up for this understanding of how
Speaker 1: hard it was to make money, how hard it was
Speaker 1: to save money, and how often as a kid I
Speaker 1: was a bad spender and saw zero in my bank
Speaker 1: account and what that felt like from an anxiety point
Speaker 1: of view. They let you fall down, but they never
Speaker 1: let you fall down hard enough that you were permanently harmed. Yes, yes,
Speaker 1: it's just that you learned the lesson. And so that's
Speaker 1: a that's a loving parent. And it's not child abuse
Speaker 1: to teach a child that money is limited. It's not
Speaker 1: child abuse to say no no as a complete sentence.
Speaker 1: It's not child abuse to teach a child to work
Speaker 1: age appropriately so that they can have a sustainable life
Speaker 1: with dignity. It's very difficult to have a sense of
Speaker 1: dignity if you don't have a sense of power over
Speaker 1: the controllables out there, and people that don't know how
Speaker 1: to work have no power over those controllables. Yes, yes,
Speaker 1: very well. Said chapter eight, Dave, you speak about something
Speaker 1: I mentioned earlier. Wealth and the wealthy are not evil.
Speaker 1: You know that has always been a struggle. And you
Speaker 1: had this beautiful sentence in the book which you says,
Speaker 1: equal is not fair, right, equal is not fair? And
Speaker 1: I remember it. I don't know if you've seen this
Speaker 1: is graphic on social media that's going viral a few times.
Speaker 1: It's I don't know who made it, but it's a
Speaker 1: picture of like three people. One's shorter, one's a bit taller,
Speaker 1: and then there's a really tall person and they're all
Speaker 1: standing on an equal sized block to watch some sports,
Speaker 1: and it says equal is It's similar to that where
Speaker 1: it's like equality doesn't work because each of these people
Speaker 1: need a different set of steps to be able to
Speaker 1: see this sport. And as soon as I read that
Speaker 1: line in your book, equal is not fair, I thought, okay,
Speaker 1: that makes sense to me, but to a lot of people.
Speaker 1: That's worrying. A lot of people would rather wealth be
Speaker 1: distributed equally, and you know figuring that out and working
Speaker 1: from that perspective. But walk us through your thoughts on
Speaker 1: why equal is not fair and how we should think
Speaker 1: about that Differently. If you throw the papers, and you
Speaker 1: actually throw them and deliver them to the people's houses,
Speaker 1: and you get paid the exact same as the guy
Speaker 1: who threw them away, that's not fair. You've provided a
Speaker 1: much more service to the community. You had integrity, you
Speaker 1: didn't steal. And the guy who threw them away took
Speaker 1: someone else's papers. They weren't his, and he threw them
Speaker 1: all way. That's stealing. And he didn't follow through on
Speaker 1: his promise, and he was getting paid for a service
Speaker 1: he didn't even attempt to do. That's also stealing. So
Speaker 1: his lack of integrity and lack of service in the marketplace.
Speaker 1: And to say that those two people should be paid
Speaker 1: the same is an immoral statement. Equal is not fair.
Speaker 1: It would not be fair for that guy to get
Speaker 1: the same money over time as you got. Now, I
Speaker 1: would never propose that two people doing the exact same
Speaker 1: thing and providing the exact same level of service somehow
Speaker 1: got different because of their skin color or their sex
Speaker 1: or something like that. No, we've got folks of every background,
Speaker 1: every ethnic origin, and everything else on our leadership team,
Speaker 1: and we're completely blind to all that were All we
Speaker 1: want to know inside Ramsey is did you do the job?
Speaker 1: And if you did the job, you get the money.
Speaker 1: And that's how that works. And so that that's the
Speaker 1: that's the only measure. And but to say that that
Speaker 1: that we're going to spread it out across the people
Speaker 1: who did the work, didn't do the work. Who who
Speaker 1: plowed the field or didn't plow the field? Who showed
Speaker 1: up and when the storm came through and got the
Speaker 1: tree out of the road. The other one just sat
Speaker 1: at home and what and you know, and played, you know,
Speaker 1: some kind of game on the TV or something. What
Speaker 1: I mean, that's just communism is what it is at
Speaker 1: its core. It's an economic system. It's not name calling.
Speaker 1: This idea that things are equal. So we have to
Speaker 1: eliminate that number one. Then once we eliminate that, then
Speaker 1: we start to understand what my friend Rabbi Lappin says.
Speaker 1: Rabbi Lappin is an Orthodox Jewish rabbi. We become really
Speaker 1: good friends, because I just love his teaching like I
Speaker 1: love yours. He says that money comes to people who serve.
Speaker 1: That when you serve, your customers give you certificates of
Speaker 1: appreciation with President's faces on them. And so you know
Speaker 1: this idea that evil people prosper. Now, the percentage of
Speaker 1: evil people among the wealthy is about the same percentage
Speaker 1: of evil people among the poor, because again, money makes
Speaker 1: you more of what you already are. You're magnified. And
Speaker 1: so here's the thing you think about it. If you
Speaker 1: got a guy that works on cars, he has an
Speaker 1: auto repair shop, and you go in there and he
Speaker 1: tinkers around on the car and he says that'll be
Speaker 1: one hundred and fifty dollars, and you drive away, and
Speaker 1: the next day your car breaks down again. You come
Speaker 1: back in there, you go, hey, I give you a
Speaker 1: hundred fifty dollars. You can fix my car. He goes,
Speaker 1: I know, but it'll be another one hundred and fifty dollars.
Speaker 1: You know I'm not giving you another und fifty dollars.
Speaker 1: And you go back. Finally you go, okay, this guy's
Speaker 1: a crook, okay, or he's incompetent one or two he
Speaker 1: doesn't know how to fix my car. Now what do
Speaker 1: you do? Do you keep going there and giving the
Speaker 1: guy money? Obviously not no more than that. You go
Speaker 1: tell everyone you know, this guy's a crook, don't do
Speaker 1: business with him. Now does that guy prosper at the
Speaker 1: end of the story. Of course not. He goes out
Speaker 1: of business. Over time, the marketplace will punish him for
Speaker 1: his crookedness. Now take the guy next door. He's got
Speaker 1: an auto repair place. Going there, he looks under the
Speaker 1: hood and he goes, oh, there it is, and he goes,
Speaker 1: you're okay, what do you What do I owe you? Nothing?
Speaker 1: Just remember me when your car really breaks, because I
Speaker 1: just fix it. It's no big deal. And you driveway going.
Speaker 1: I found a guy who fixed my car for free,
Speaker 1: and he actually is honest. This is a unicorn. I'm
Speaker 1: gonna tell everyone about this guy. And then this guy,
Speaker 1: you know, we visit this guy. Now, twenty years later,
Speaker 1: he's got a franchise operation. He's got this color of store,
Speaker 1: fixing cars in fifty six cities across America. He's worth
Speaker 1: eight million dollars and now he's evil. What Yeah, that's absurd.
Speaker 1: The line of thinking here, the critical thinking skills that
Speaker 1: get you to that are non existent. It's impossible to
Speaker 1: be a crook and prosper in a free marketplace long term,
Speaker 1: or to use crookedness as a method of wealth building
Speaker 1: because it actually works against you. So that that's Rabbi's
Speaker 1: you know, that's his line of thinking on that, and
Speaker 1: that's where we go to. So, yeah, there evil people
Speaker 1: that are rich, but I don't know a lot more.
Speaker 1: They're unbelievably kind, generous, grateful, They got more time for
Speaker 1: you than and they'll do anything for any I mean,
Speaker 1: they're just unbelievable humans. And that's the one I know
Speaker 1: a lot more of those than I do. Crooks. Money
Speaker 1: is any moral It's not about money. It doesn't have morals.
Speaker 1: It's about the human being, and when it touches that
Speaker 1: human it reflects who they are. Dave, this has been
Speaker 1: so much fun getting to know you. I've I've always
Speaker 1: watched you from Afar admired you, you know, a big
Speaker 1: fan follower in meet and to sit down with you
Speaker 1: and to have this conversation with you and to hear
Speaker 1: about the depth of these ideas. Right, You're highly strategic,
Speaker 1: methodical people can actually get really functional advice on how
Speaker 1: to change their lives financially. But I love the depth
Speaker 1: and the gravitas with which you do. I genuinely mean that.
Speaker 1: And we end every on Purpose episode with the final five.
Speaker 1: These questions have to be answered in one word or
Speaker 1: one sentence maximum, so there are a quick fire around
Speaker 1: Dave Ramsey. These are your final five. Are you ready?
Speaker 1: I'm ready? Okay, awesome. So the first question is what
Speaker 1: is the best financial advice you've ever heard, received, or given?
Speaker 1: Be intentional? Second question, what is the worst financial advice
Speaker 1: you've ever received or heard? You can borrow your way
Speaker 1: unto wealth? Great answer, very aligned, all right. Question number three,
Speaker 1: what do you believe is the best investment or spending
Speaker 1: that you've ever done in your life? Giving beautiful? Question
Speaker 1: number four, what do you think was your biggest financial
Speaker 1: mistake of an investment or spenditure going deeply in debt
Speaker 1: to build wealth? And fifth and final question, If you
Speaker 1: could make one law that everyone in the world had
Speaker 1: to follow, what would it be? I would require them
Speaker 1: to be generous? It's beautiful, Dave Ramsey. Everyone, if you
Speaker 1: haven't already got the book Baby Step Millionaires, please go
Speaker 1: and grab a copy of the book. If you don't
Speaker 1: subscribe to Dave's podcast, The Ramsey Show, make sure you
Speaker 1: do his podcast lots of other incredible podcasts as part
Speaker 1: of that network as well. Please tag Dave and I
Speaker 1: on Instagram, on Facebook, on Twitter about what resonated with you,
Speaker 1: what you took away. There were so many nuggets of
Speaker 1: wisdom and insight. I love the studies and resets that
Speaker 1: Dave shared. Makes you tag us both to let us
Speaker 1: know because we'd love to see what you took away
Speaker 1: and make sure you keep coming back to on Purpose
Speaker 1: for more insights into your mental health, which includes your finances,
Speaker 1: which includes your fitness, and of course includes your friendships. Dave,
Speaker 1: thank you so much. Any final words for our community.
Speaker 1: Unbelievably honored to be with you. I hope we get
Speaker 1: to do this again and the next time we need
Speaker 1: to just hang out a little bit. I would absolutely
Speaker 1: love that. If you're in La, let me know. If
Speaker 1: I'm in Nashville, I'll let you know. And otherwise I'm
Speaker 1: going to keep supporting from AFAR and we'll definitely do
Speaker 1: this again. So thank you, Dave, and thank you to
Speaker 1: your whole amazing team as well. They've been so helpful.
Speaker 1: Thank you Sir, Thank you m HM