‘Go Make Some Stinkin’ Money’: Dave Ramsey on Building Wealth on $50K a Year
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Financial expert Dave Ramsey, known for his direct and practical advice on money management, recently addressed a caller’s concern about growing wealth on a modest income on the Jan. 22 episode of his radio show.
The caller, Morgan from Ann Arbor, Michigan, shared her family’s financial situation: a combined household income of $50,000, no debt, but a struggle to find extra money for investments.
Ramsey’s response was straightforward and insightful, emphasizing the balance between income and expenses.
Understanding the Income and Expense Balance
“Either you’re not living on as little as you can, or you don’t make much money,” Ramsey queried at the beginning, before asking Morgan what she and her husband bring in per year. He pointed out that Morgan and her husband are earning below the national average.
For Ramsey, the key to financial growth always involves examining income and expenses. He emphasizes looking at ways to increase income or decrease expenses to create financial flexibility.
The Reality of a $50,000 Budget
Acknowledging the constraints of a $50,000 budget, especially for a family, Ramsey said, “You do not have a lot of room in a $50,000 budget.” He commended Morgan for managing to stay debt-free but stressed the need for finding ways to increase their income for more financial breathing space.
The Trade-Offs for Financial Goals
One of Ramsey’s key points was about trade-offs.
“The problem with hitting goals is not what you’re willing to do to get there; it’s what you’re willing to give up to get there,” Ramsey advised. He suggested that achieving financial goals might require reconsidering plans to stay at home or finding ways to balance work with family responsibilities.
Setting Specific Financial Goals
“Realistically, I mean probably $500 to $1,000,” Morgan responded when Ramsey co-host Ken Coleman asked how much extra per month would make a difference.
Emphasizing the importance of having a tangible goal, Coleman advised, “Get that number in your head…what do we have to do to come up with an additional thousand?”
Exploring Ways to Increase Income
A significant portion of Ramsey’s advice focused on increasing income.
“Go make some stinkin’ money,” he urged, suggesting that Morgan and her husband could collectively find ways to make an additional $1,000 per month. This could involve freelancing, taking additional classes, or considering a career change.
Long-Term Planning and Career Growth
Discussing long-term planning and career growth, Ramsey encouraged Morgan’s husband to consider his future.
“What am I doing when I’m 36 that I’m making 100,000 instead of 50?” Ramsey posed, highlighting the importance of career development and skill enhancement for increasing earning potential.
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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