Personal finance guru Dave Ramsey says you don’t have to earn six figures to live your dream retirement life. However, you do have to live your life in a way that supports that goal.
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“Trips to visit grandkids, travel adventures and family celebrations at your paid-for home. That’s the kind of retirement many Americans dream about,” according to a post on Ramsey Solutions. “You don’t have to earn six figures to turn this dream into a reality. But you do have to live and plan today with that goal in mind.”
Ramsey frequently talks about the simple steps anyone can take to build wealth and recently posted on X, formerly known as Twitter, listing the five steps you can take that will make you wealthy.
Have a Written Budget
Ramsey’s number one advice is to have a budget. According to The National Study of Millionaires, a survey of 10,000 millionaires conducted by Ramsey’s team, 93% of millionaires said they stick to their budgets. The study also found that 79% of millionaires didn’t receive an inheritance, and one-third of respondents never made six figures throughout their careers.
A budget is the foundation of any wealth-building plan, Ramsey said, and he recommends telling every dollar where it should go for the month using a zero-based budget. Your income minus expenses should equal zero.
Get Out of Debt
If you have debt, you shouldn’t be setting money aside for savings or investments. Ramsey says that your income is the most powerful wealth-building tool, and you shouldn’t spend your entire life making loan payments. This gives you less money to save and invest for your future.
Live on Less Than You Make
Millionaires don’t all live lavish lifestyles. In fact, Ramsey’s survey found that 94% of millionaires live on less than they make. The average millionaire has also never carried a credit card balance, spends $200 or less on restaurants each month and shops using coupons.
If you’re living beyond your means, in the end, you won’t have anything to show for it.
Save and Invest
According to The National Study of Millionaires, 3 out of 4 millionaires said regular, consistent investing over a long period is the reason for their success. Investing experts Warren Buffett and Benjamin Graham also say that the best way to build wealth is to keep investments for the long term in a strategy known as buy-and-hold investing, Business Insider reported. This can help even out fluctuations in the market
After paying off debt and building an emergency fund, Ramsey says to invest 15% of your gross income in retirement accounts like a 401(k) or Roth IRA.
Be Generous
The final step to having true “financial peace” is having the freedom to give your money to help change the world around you. Ramsey noted that studies have shown that generosity leads to more happiness, contentment and a better quality of life.
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“But when you make giving a part of your life, it doesn’t just change those around you — it changes you,” Ramsey wrote.
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This article originally appeared on GOBankingRates.com: Dave Ramsey Says Making These 5 Moves Will Make You Wealthy
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