Financial guru Dave Ramsey has been a steadfast personality in the personal finance space for over 30 years. With his nationally syndicated radio program, “Ramsay Solutions,” the best-selling author is a solid proponent for getting out of debt, building a solid emergency fund, and investing.
In Dave Ramsey’s “7 Baby Steps to Financial Peace,” Ramsey indicates that once a starter emergency fund has been established, your debt has been paid, and then a fully funded emergency fund has been established, the fourth step is to invest 15% of your household income on your retirement.
If you would like to more about Ramsey’s philosophy about investing, here are 10 Dave Ramsey quotes about investing that are perfect.
1. “Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can give money back and have money to invest. You can’t win until you do this.”
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- Live within your means.
- Avoid debt.
- Be wise with your money.
Takeaway: Spend Less Than You Earn
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Ramsey is a strong proponent for cultivating discipline and being intentional with spending. He believes that you do have control as to where your money goes and that frivolous spending is one of the biggest stumbling blocks to obtaining financial peace and wealth. Once you gain control of your spending, with the funds that you are able to save, you could put to better use, such as beginning your investment journey.
2. “It is human nature to want it and want it now; it is also a sign of immaturity. Being willing to delay pleasure for a greater result is a sign of maturity.”
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- Don’t impulse purchase.
- Delay pleasure for a greater result.
- Save and plan for your future.
Takeaway: Delay Gratification
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There is no greater way to disrupt our budget than to let our discretionary spending run amok. Instant gratification does little more than destroy our financial future. Whether it’s weekly nights out on the town, buying the latest tech gadgets, or dining out several times a week, in time, these spending sprees could impact your ability to meet even your necessary expenses, such as rent other bills. Instead, Ramsey encourages us to look at the bigger picture and determine what financial goals we would like to achieve. Although saving and investing money today is a sacrifice, it is bound to lead to a more stable financial future.
3. “Your decisions from today forward will affect not only your life, but also your entire legacy.”
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- Your decisions matter.
- Your decisions will pave your life’s path.
- Choose a path that aligns with your values.
Takeaway: Be Mindful
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When it comes to spending our money, many have a short-sighted view. Little attention is paid towards the future. Ramsey believes that our financial decisions have long-term implications. The way we spend, invest, and save have consequences that go beyond our present circumstances. That’s why he advises to be thoughtful and deliberate with your financial decisions.
4. “No one got rich on a government program. Do not choose to be a common man. You can be uncommon.”
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- Take charge of your wealth building efforts.
- Government programs will not make you wealthy.
- Strive beyond just getting by.
Takeaway: Take Control of Your Financial Destiny
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In regards to financial responsibility, Ramsey believes that we need to look to ourselves to get on the right financial path. Today we are inundated with a wealth of information on how to begin our investment journey. There are a plethora of books, courses, and even apps that aim to break down and simplify the complexities common to investing. There is no need to look to the government for help in this matter.
5. “Work is a surefire money-making scheme.”
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- Work can be instrumental to achieving financial security.
- Your job offers a reliable income.
- It’s a more realistic path to financial security.
Takeaway: Work It!
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On the road to building wealth, little attention is paid towards our main income generator…our jobs! Working at our jobs provides us with a reliable, steady income stream that can help fuel our financial goals. What’s more, if your employer provides an employer-matched 401K, you already have a head start in building your financial future. When your employer offers a matching contribution to your 401K, you are essentially receiving free money and an immediate return on your investment. What’s not to like?
6. “I would not pre-pay. I would invest instead and let the investments cover it.”
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- Investing can be a better alternative than pre-paying your debt.
- Your money could grow faster if invested.
- Your investment earnings can earn interest.
Takeaway: Invest!
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Although Ramsey is a strong proponent of paying down debt, especially those with higher interest rates such as credit cards, he may be referring to mortgage debt. Since mortgages have lower interest rates, consumers can choose to not make extra payments and instead invest, if they know they have the potential to earn a higher return versus simply saving on the interest by paying their debt off early.
7. “Your priorities, passions, goals, and fears are shown clearly in the flow of your money.”
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- Your money flows where it matters.
- Your spending reveals what drives your financial decisions.
- Does your spending ultimately align with your goals?
Takeaway: Tell Your Money Where to Go
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The way you manage your money reveals what you value. Financial behavior is indicative of what your current mindset about money is. If you have been actively investing for years, this demonstrates your desire for financial stability in the future. Balance is always the key to a healthy money mindset. Having a budget where all your necessities and financial obligations are met, some discretionary money, and a little to save and invest will pave the way to wealth accumulation over time.
8. “The best time to get control of your finances and start saving for the future is today!”
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- Regardless of your situation, you can take control of your finances now.
- Take the necessary steps, now matter how small, to make your contributions.
- Prepare for your future retirement.
Takeaway: Start Today!
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There is no time like the present to take control of your financial situation. Starting your financial planning and savings now is a key component in allowing funds to grow in the years to come. Thanks to compound interest, your money will grow exponentially over time, increasing the value of your original investment over time. It has the power of outpacing inflation and maintaining the purchasing power of your money.
9. “You must gain control over your money or the lack of it will forever control you.”
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- Make conscious decisions on how you spend, save, and invest, your money.
- Manage your finance to avoid dependence on debt.
- Don’t be financially reactive, be proactive!
Takeaway: Tell Your Money Where To Go
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Taking control of your finances have numerous benefits. For one thing, it’s empowering. As you grow more confident in making financially sound decisions, prioritizing saving over spending, you take a more proactive approach in working towards your financial goals. By managing your money wisely, you don’t have to be concerned about falling victim to financial limitations due to overspending and debt.
10. “Investing should be boring. You don’t get rich quick with a bunch of hotshot picks in the market.”
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- Slow and steady investing wins the race.
- Avoid risky bets.
- Be disciplined and stick to your plan.
Takeaway: Learn All You Can About Investing
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Anything worth doing will take a lot of time, patience, and discipline. It is no different when it comes to investing. Avoid jumping on the bandwagon of any “get rich quick” schemes or any type of risky investments. Although quick profits have been made by others, it is definitely the exception and not the norm. It is best to play it safe and focus on long-term growth, diversification, and managing risk.
Why This Matters
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With the Consumer Price Index rising 3.4% in the last 12 months, inflation is clearly an issue of concern for most consumers in the U.S. The price of goods and services increasing, such as food, gas, and rent, indicating that the U.S. dollar doesn’t seem to stretch as far as it did the year prior. Therefore, money saved in the bank is also losing its purchasing power as it too faces the impact of inflation. One way to hedge against these rising prices is through investing. Stocks, are historically known to outpace inflation. It is through investing that you are able to preserve your financial wealth over time.
If you want to learn more about investing in real estate, take a look at this article.
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