How Dave Ramsey Lost Millions in Real Estate at 28 — And What He Wishes He Did Instead

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Dave Ramsey, a renowned financial advisor, and media personality, holds a compelling life story marked by initial wealth, significant loss, and then resurgence. At the young age of 26, he was already a millionaire, with a $4 million real estate portfolio.

However, his fortunes took a drastic turn, leading to bankruptcy by the age of 28. Today, Ramsey uses his experience to advise others on wise financial management. Here’s a deeper look into Ramsey’s journey and the lessons he wishes to pass on from his early financial missteps.

Born on September 3, 1960, Dave Ramsey’s journey to entrepreneurship began early. Prompted by his father’s insistence on self-reliance, Ramsey ventured into business while still a child, setting up a lawn care business at the age of 12.

By the time he turned 18, he had obtained his real estate license, using commissions from property sales to pay his college tuition. With a family background in real estate, it seemed Ramsey had found his niche.

With the help of connections at local banks, he began flipping properties shortly after his graduation. His initial success was awe-inspiring, amassing a real estate portfolio worth $4 million and a net worth exceeding $1 million. However, this prosperity was short-lived.

When Ramsey’s main lender, to whom he owed $1.2 million, was taken over by a larger bank, the new owners demanded full repayment of the debt within 90 days. A second bank soon followed suit, calling in his $800,000 notes.

While Ramsey managed to repay a significant portion of the debt, he was left with an outstanding sum of $378,000. Unable to manage this substantial financial burden, Ramsey had to declare bankruptcy at the age of 28.

Following his financial downfall, Ramsey turned to Christianity and started reading the Bible. He discovered that the scripture had a lot to say about money. His newfound knowledge and his personal experience with financial hardship laid the foundation for his career in financial counseling. He began to assist others dealing with financial problems and gradually built up a business offering money management advice.

Today, Dave Ramsey advises against the kind of financial practices that led to his early bankruptcy. He promotes prudent money management principles derived from his personal experiences and his understanding of Christian values. One of his main recommendations is to avoid debt, a principle he backs up with Proverbs 22:7: “The rich rule over the poor, and the borrower is a slave to the lender.”

Further, Ramsey advocates for a disciplined and methodical approach to building financial freedom. His advice are things he wished he had done before falling into that debt, distilled into a series of “7 Baby Steps,” which include establishing an emergency savings fund, paying off non-housing debts as soon as possible, investing in retirement accounts, and eventually building wealth.

Ramsey’s financial principles reflect a significant shift from his early financial practices. Looking back, he wishes he had adopted these principles earlier and avoided the heavy debt that led to his bankruptcy.

His story is a testament to the possibility of bouncing back from financial failure and is a guiding light for those seeking to attain financial security and prosperity.

Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.

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