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This is a famous rant from Dave Ramsey saying that saving $100/month and investing it from age 25 to 65 (or any 40-year span) nets you a little over $1 million.

He thinks almost anyone can do it.

Who wants to try?

Edited 1 time(s). Last edit at 07/09/2019 04:28AM by shoptastic.

Can you make me 25 again?

@Niner wrote:

Can you make me 25 again?

lol. Me too!

You can start at any age and still make good progress, though. He routinely councils 50+ year olds to save...even 70 year olds. It's never too late! You can always have more through disciplined saving and spending.

Also, it's never too late to teach one's children either!

Edited 1 time(s). Last edit at 07/09/2019 12:15PM by shoptastic.

I watched Dave this morning. If just a small fraction of his commenters follow his advise, they will have profited beyond their wildest expectation. On many occasions over the years, I have stated that it is not what you earn, but what you do with that money. I always use the following example: If your income is $100,000, but you spend $105,000, you end up in the hole.

Wishing us all prosperity and joy.

It sounds great until life changes everything. I was on my way to having a nice retirement, when I became my mother's full time caregiver in my early 50's. I had to stop working and live on what I did have saved. I went through my savings. Have a family event happen and it can wipe you out.

Ramsey is correct in that wealth comes from thrift plus investment. Sure, you might invent the next outrageously successful widget or you may have an inheritance or you may win the lottery, but if you haven't learned thrift plus investment you are likely to blow through those funds as well. I personally know a number of millionaires and they have all acquired the bulk of their wealth through 401k and 403b retirement plans that automatically took a small amount from each paycheck and there was some employer match. As they saw their wealth grow, they began other savings and investment vehicles.

Over the last 50 years the stock market has returned a little more than 10% per year on average--this is if you stayed invested through all the upturns and downturns in quality stocks. In the past if you knew nothing of the markets you were encouraged to purchase mutual funds that had a manager handling the investment of your funds, for which a fee was charged usually up front to buy the fund and then a smaller fee annually. These days you can purchase "index funds" (also called ETF) which are buying into a portfolio of stocks that mirrors the index. So you can buy the 'DOW' as stock DIA, the 'Nasdaq' as QQQ and the 'S&P 500' as SPY. Many of the discount brokerage houses are allowing you to purchase these ETFs with no transaction fees. This makes it feasible to make systematic small deposits to a brokerage account and even buy these index funds one share at a time.

My family and others I know made their money by buying Real Estate in the best locations and never selling.
My uncle came from Europe with no education and worked as an upholster and saved every penny, until he was able to buy his first apartment building for $11,000, then he bought another...when he passed he left one to each child, and now in San Francisco in the Marina district they are getting $6,000 a month for a large one bedroom.
Life is good for some, and watching your dollars is the way, or investing in real estate, but of course, those days are over. We also started a trust (college) for our daughter when she was seven and never sold the stocks and paid for college, so thank G__, when we pass, my daughter will be fine, well worth the sacrifice. I do think it more difficult today with the cost of housing, cars and living expenses, it takes two checks to get by from what I see and am told.

On August 14, 1935, the day FDR signed SS into law, the Dow closed at 128.27. Had it been set up as a privatized program, with the money invested in Dow stocks, nearly everyone would retire in good shape, there would be no SS funding crisis, the multi-trillion dollar SS liability would not exist, and federal entitlement programs would not be devouring such a large percentage of the federal budget. As it is, payroll tax money is transferred to the general revenue fund and replaced with a special bond created for the purpose and issued by the Treasury Department only to the SS Administration. These bonds pay 2%. This is the SS "Trust Fund" and this is the return that, by law, you get on your SS "investment". As an aside, the Fed's inflation target is 2%, which means that if they hit their target, you break even in real terms. When they miss on the high side, you lose money on your SS retirement account.

So yes, it is up to you.

@Irene_L.A. wrote:

My family and others I know made their money by buying Real Estate in the best locations and never selling.
My uncle came from Europe with no education and worked as an upholster and saved every penny, until he was able to buy his first apartment building for $11,000, then he bought another...when he passed he left one to each child, and now in San Francisco in the Marina district they are getting $6,000 a month for a large one bedroom.
Life is good for some, and watching your dollars is the way, or investing in real estate, but of course, those days are over. We also started a trust (college) for our daughter when she was seven and never sold the stocks and paid for college, so thank G__, when we pass, my daughter will be fine, well worth the sacrifice. I do think it more difficult today with the cost of housing, cars and living expenses, it takes two checks to get by from what I see and am told.

Glad to hear that, Irene.

I don't know anything about real estate, nor do any of my family members, but we have family who know a lot about stocks. That's always been a topic of conversation in our house.

@Niner wrote:

Can you make me 25 again?

One thing I would add is that people are living longer these days.

Think of John McCain's mom, who has outlived him to be 105 or 106 years old I think.

Even starting at age 65 through age 105, one can make that million!

It's never too late to do better. That's what Dave Ramsey always teaches and says to people in their 50's, 60's, 70's, and up when they call into his show. But, even in practical terms, you never know if you'll have another three decades or so more of life than expected or not. Humans are progressively living longer and longer.

You might NEED that extra money later too. So, it's a great habit if one is able to do it.

I don't follow folks like Dave Ramsey and others who have gotten rich telling other people how to get rich. Here's news. I already AM RICH. Although our combined income brings us just into the upper middle class financially, my husband, kids and I are absolutely rich. We have each other, a great extended family, friends, a worn but comfortable and happy home, and room around us to do what we want. We are all strong and healthy and have abundant opportunities. We are rich in the most meaningful of ways.

You are forgetting that many people over 65 are no longer part of the work force. And age discrimination is running rampant in the workplace, with many people being forced to retire earlier than planned and unable to get another job due to their age. Age discrimination is against the law and unethical, but believe me, it exists (and not just in this forum). I do know that it's hard for people to put money away when they unable to get a job or are living on social security, have fixed incomes, and perhaps have expensive medications and other health issues. Or they are like Johnb974, who posted above that becoming his mother's caregiver wiped out his retirement savings. Additionally, I know of a few people who suddenly in their late 60s found themselves raising their grandchildren due to their own children being unable to care for them, and some have had both their adult children and their grandchildren move in with them, which is a heavy and expensive burden to bear. So, the idea that the average person in their later years, regardless of their potential longevity, will be able to put much money away is unlikely.

I have been fortunate enough to do well with my investment portfolio so when my golden years arrive I will be fine, but many other people might not.

Sandy, that is great but is not mutually exclusive to building savings/assets for your kids' education, your retirement and for emergencies. Sure folks like Ramsey and Ormand and others make money by lecturing and writing books, but that doesn't mean they are wrong. They rather are emphasizing what you should be able to figure out with common sense. The fact is that only a decade ago many families were hurt badly because they had little or no reserves when the recession hit. We should have learned but even today the estimates are that 40% of Americans don't have enough cash reserves to cover a $400 auto repair and many more don't have health insurance so an accident or illness could send them into bankruptcy. If these folks can persuade their readers/listeners to look at their finances seriously and find ways to save for their futures, I won't resent that they got rich any more than I resent a farmer or fisherman making a living. Somehow Americans seem as reluctant to look at their financial health as they are to plan for their own demise by having a will drawn up.

The concept of 'becoming a millionaire' does not motivate me. I am not unmotivated, though. As long as I do something good and well with my little bit of disposable income and invest at my little rate, I am satisfied. I have a few personal money goals, but they are not just a number. They are purposes and uses of money.

I may be a dolly downer but I hardly believe starting to save at 65yrs. will bring you a million dollars...Wishing it were possible, but knowing it's not. People with money always tell you the "easy way" and everyone can do it....
the poverty level says not.

Once, I read a little ditty. It went something like this: tithe ten percent, save ten percent, and spend the rest with thanksgiving. This is small potatoes, but it's the principal of the thing that counts...

@panama18 wrote:

On August 14, 1935, the day FDR signed SS into law, the Dow closed at 128.27. Had it been set up as a privatized program, with the money invested in Dow stocks, nearly everyone would retire in good shape, there would be no SS funding crisis, the multi-trillion dollar SS liability would not exist, and federal entitlement programs would not be devouring such a large percentage of the federal budget. As it is, payroll tax money is transferred to the general revenue fund and replaced with a special bond created for the purpose and issued by the Treasury Department only to the SS Administration. These bonds pay 2%. This is the SS "Trust Fund" and this is the return that, by law, you get on your SS "investment". As an aside, the Fed's inflation target is 2%, which means that if they hit their target, you break even in real terms. When they miss on the high side, you lose money on your SS retirement account.

So yes, it is up to you.

Tell that to the people who lost everything when the market crashed in 2008. Tell that to the Bernie Madoff investors. Even though the SEC said he was fine, until it all collapsed.

@johnb974 wrote:

Tell that to the people who lost everything when the market crashed in 2008. Tell that to the Bernie Madoff investors. Even though the SEC said he was fine, until it all collapsed.

Warren Buffett, who some say is the greatest investor in all of history, recommends to the average person and to his wife also upon his future death that they simply buy a index fund that captures the entire stock market. He said an S&P 500 index fund would do. There are others like a "total stock market fund" that capture the whole stock market.

It's because he feels most money managers cannot beat the stock market, which averages 9-10% in gains a year over the long-term. He's told his wife to not even buy his OWN fund, Berkshire Hathaway, after he dies, because he won't be alive to pick its stocks. LOL!

A lot of those who lost out in 2008 probably:

a.) sold when the market crashed
b.) were not diversified - Buffett's recommendation prevents this, because you're essentially buying the entire stock market, instead of a single stock...or two...or three...or four. Mutual funds do the same thing (by buying 100's of stocks in the fund to diversify), but he doesn't recommend them, because he thinks most money managers cannot beat the market. So, again, he just says to buy the market through a very broad index fund. That way, you'll average 9-10% over many years. Sure, if you pick a GREAT fund with a great set of stock pickers, you can beat the market...but it can be hard to do that sometimes.
c.) may have been in very risky investments like your Bernie Maddoff example

I read or heard somewhere that if someone shows you investment gains on a chart and they ALWAYS go up year after year after year, there's a good chance it's a scam or Ponzi scheme. Even the best money managers usually have bad years. I remember hearing the Madoff story, I think, where he claimed earned his clients x-dollars every single year. There were like NO BAD years. And I think they were outsized gains too. That could be very suspicious. Following Buffett's advice avoids all of this. You can just buy an index fund representing the entire stock market and invest $100 (or whatever) into it every month.

By the way, I read most of Maddoff's victims have now recovered most of their principal. I think the NY Times had a story on this. Many people invested millions with him. The really sad part is that they are just now getting the principal back only! Had they had the money available to them, they'd have made so much more money over the past x number of years they were without it.

Edited 3 time(s). Last edit at 07/10/2019 06:34AM by shoptastic.

This week I was hungry and impulsed $7.xx at Taco Bell.

I felt guilty afterwards. I could have taken time out to prepare a meal in advance and saved a few bucks.

I heard Dave Ramsey yelling in my head: "There you go again. Impulsing away $20 here, $5 there, and it all adds up at the end of the month. And you wonder where all of your money went!"

Dave Ramsey has wormed his way into your head. He shames, controls, and bullies. Your money is yours to control, not his.All that really happened there was that you made a choice to buy prepared food instead of cooking at home. What did you do with the past time that you now claim you should have spent on a pre-made meal at home? Did you... work? Meditate? Exercise? Commune with God? Sleep? Care for others? Visit nature? Visit a lonely person?

i appreciate that there are ways to save time and money. And... there are so many ways to use and invest time and money!

@shoptastic wrote:

This week I was hungry and impulsed $7.xx at Taco Bell.

I felt guilty afterwards. I could have taken time out to prepare a meal in advance and saved a few bucks.

I heard Dave Ramsey yelling in my head: "There you go again. Impulsing away $20 here, $5 there, and it all adds up at the end of the month. And you wonder where all of your money went!"

I'm glad the only voice inside my head is my own.

This sounds like a Louise Hay thing. "I am the only thinker in my head."

@JASFLALMT wrote:

I'm glad the only voice inside my head is my own.

Sure, we can go with that. I had to google her, had never heard of her before.

@Shop-et-al wrote:

Dave Ramsey has wormed his way into your head. He shames, controls, and bullies. Your money is yours to control, not his.All that really happened there was that you made a choice to buy prepared food instead of cooking at home. What did you do with the past time that you now claim you should have spent on a pre-made meal at home? Did you... work? Meditate? Exercise? Commune with God? Sleep? Care for others? Visit nature? Visit a lonely person?

i appreciate that there are ways to save time and money. And... there are so many ways to use and invest time and money!

I don't know if you've listened to him a lot, shopetal, but most people I've seen will say this about Dave:

He's very tough and he could be a bit rough around the edges, but he's also very loving and sincere. He's like the tough coach or dad, who sees your potential, sees a method of you reaching it, and won't let you make excuses for yourself to cheat yourself out of those high expectations. He genuinely wants to see you do well over the long-term of your life. I TOTALLY would get if someone thought he sounded like a JERK from that single video clip above, though. I probably would too! It's just that I've listened to his show long enough to know it's not the case, imho. It's an isolated rant that doesn't show his softer side. I first thought he was a bully and rude person too. I still think he's rude or rough around the edges at times. But, I see what many others have said too. He's totally sincere and is very well-intentioned. You see it over time from many call-in sessions.

One thing he says is he's much harder on guests who've said that they are long-time listeners vs. those who just started following him and trying to apply the principles for the first time. He feels if you've been a long-time listener, you should know better and it's just will-power (not knowledge) that you're lacking.

Why the guilt over Taco Bell? I felt I could have made it home, which was five minutes away to eat a cheaper home meal. I went out shopping (not ms-ing, but regular shopping) for a few hours and had gotten very hungry. I was hoping to make it home to eat, but couldn't take it and stopped to buy Taco Bell. I think having certain financial goals, I was upset with myself for not holding out. And it occurred to me that maybe having had some crackers or peanuts in a bag with me could have held my hunger in check more easily.

Yeah, not a huge deal per se. But, still. Just a missed opportunity to have saved a bit there.

Edited 1 time(s). Last edit at 07/10/2019 11:51AM by shoptastic.

When anyone does what Ramsey says, and makes money, please share the experience....his money comes from the books he writes and you buy.

I think some people genuinely need to hear what Dave Ramsey has to say because they just aren't money smart to figure their financial life out on their own.

However - I don't and won't ever follow his logic because, although many would say I'm upper middle class, I really don't care all that much for having money in itself. Could care less if I had a bank balance of $1 million. Money flows, it comes and goes and I believe it always comes back to me (which for 37 years it has, so I'm sticking to this theory). I care enough about money to make sure I have enough to fund the things I want to do. Any excess, don't really care about.

It's not a new concept to not spend beyond your means, which so many people do these days. It's a great idea to try and curb frivolous spending. I am not going to be stingy with my money and miss out on some enjoyable experiences, however. I definitely am frugal in my day-to-day life, but I invest some of my money and the rest I save for travel to visit family and to spend on vacations. I have a paid for house, a paid for vehicle, and I have no credit card debt. And, instead of going out to buy a new car, I will drive my 2013 Hyundai for probably another 5-10 years (it only has about 47,000 miles on it anyway).

Most people are going to do what they want to do regardless of what anyone tries to preach to them. The people who could benefit most from listening to this guy probably don't have the discipline to follow his advice anyway.

@nixkit wrote:

I think some people genuinely need to hear what Dave Ramsey has to say because they just aren't money smart to figure their financial life out on their own.

This is, I believe, the real value of a Ramsey or an Ormond. I've heard Ramsey a few times and the emphasis on eliminating consumer debt seems a surprise to many. "I can meet the minimum monthly payments" on a credit card ignores that you are paying 18% or more in interest. I do know of a couple of folks who cleaned up their credit card debt after listening to him and cut up their cards to keep from temptation in the future.

Guilting is not guiding. Shaming is not guiding. Commanding is not guiding. These pressure tactics teach nothing. They are designed to break spirits and wills and squelch any remaining dare to hope for self-determination. A financially challenged person will not improve permanently if they only cave to outside pressure, such as to a boot camp approach. We are not in training to perform military maneuvers! We do not have to live under General Moneybags or Commander Currency. We are only learning about ourselves and studying our relationship with money.

Some people need a clear path and their own space in which to become who they want to be financially. This approach keeps people in control of their situations and gives them freedom to make goals, respond to unanticipated events, seek information from a variety of resources, and otherwise live in a world that revolves around money. The fact that some people do not feel free to explore the financial aspects of themselves is tragic. It is part of dysfunction and often occurs with other issues and conditions involving other people, personalities, and relating styles.*

I disagree with the word curse that someone posted above which states that some people are too stupid to figure out their financial lives without outside assistance. In fact, everyone is born without specific financial knowledge and everyone needs some amount of modeling or money lessons as they go through life! I presume that the poster did not intend to include every person through history in their designation of stupidity.

I prefer an affirmative approach. Some people have a certain financial aptitude. They are not better than others. Some people do not require large sums of money. They are not better than others. Some people incorporate money with values to a greater extent than others. They are not better than others. Some people are still learning in adulthood that which was denied to them in childhood, such as the freedom to think, decide, choose, and experience consequences regarding money. They are not better than others.

* i am painfully aware that some people would like their personal financial standard and accomplishment to be the all-currency standard for everyone on the planet. These folks need help. They do not acknowledge the great variety of financial conditions and possibilities which all kinds of people can create, experience, overcome, endure, embrace, etc. They are the most difficult to reach and to teach, and it is difficult for them to realize that their parts in situations are only parts-- fractions & factors, really-- and not wholes. They are not the be-all and end-all of money or of life. They have money. Is this all they need? Really?????