Dave Ramsey’s Advice for Millennials Who Want To Get Rich

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Millennials have had a lot of financial headwinds to contend with, from waves of job loss during the Great Recession and COVID-19 pandemic to hefty student loans and rising housing prices. But it’s still possible to become a rich millennial with the right money moves.

A recent Ramsey Solutions post outlined the steps to becoming a millennial millionaire — here’s how to do it.

Know Your ‘Why’

If you want to become a millionaire, you have to figure out why this is your goal.

“No plan can truly be effective without a ‘why,'” the Ramsey Solutions post states. “What’s a why? It’s the thing that drives you. The reason or outcome that motivates you and pushes you to tell yourself over and over again, ‘This is worth it. I can do this.'”

Your why can be anything, from paying for your kids’ hobbies to retiring wealthy.

“Choose a why that helps you stay focused no matter what roadblocks may be up ahead,” the post states.

Start Saving for Retirement ASAP

Even if you’re decades away from retirement, you need to start saving now. Use this time to your advantage.

“Building wealth takes time, but as a millennial, you’ve got a major leg up. Time is on your side,” the post states. “The sooner you start saving for retirement, the younger you’ll be when you hit millionaire millennial status and the less of your own money you’ll have to invest to get there.”

This is due to the power of compounding interest. For example, if you started setting aside $500 a month at age 25, you would have $2.9 million in your account by the time you are age 65. If you started saving $500 a month at age 55, you would only have $105,000 by age 65.

“The earlier you start investing for retirement, the sooner you hit that million-dollar mark,” the post states. “If you wait to invest, you’ll need to invest more each month — which means you need an even bigger income — or invest for a longer period of time — which could mean working into your retirement years.”

Invest Strategically

Instead of keeping money in a savings account — even a high-yield money market account — put any money you don’t need for emergencies into investments. Ramsey Solutions recommends investing in growth stock mutual funds.

“The only investment option we recommend is growth stock mutual funds with a history of strong returns. That’s it,” the post states. “If you start investing when you’re 25, you could hit your retirement goal — maybe even break the $2 million mark — with just $200 a month.”

Don’t Forget To Roll Over Your Retirement Account If You Change Jobs

If you’re a millennial, it’s likely that you will change jobs at some point before you retire. When you do so, don’t forget to roll over your workplace retirement account.

“You should always roll your 401(k) from your former employer into an Individual Retirement Account (IRA),” the post states. “A traditional 401(k) rolls into a traditional IRA. A Roth 401(k) rolls into a Roth IRA. Don’t leave your retirement investments hanging out in a black hole. Put them to work.”

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