David Lawrence Ramsey III, popularly known as Dave Ramsey, (born
1960) is an American personal finance personality, radio talk show host,
author, and businessman. He hosts the nationally syndicated radio show The
Ramsey Show. Ramsey has written several books, including the New York Times
bestseller Total Money Makeover, and Entrepreneurship, and hosted a television
show on Fox Business from 2007 to 2010.
Dave Ramsey was 26 years old when he started earning a quarter
of a million dollars a year and by then already had a real estate portfolio of
$4 million. Although, he lost everything two years later.
Today, 60-year-old Ramsey is considered one of the most trusted
financial advisers with a podcast, The Dave Ramsey Show, ranked as one of the
top five talk shows in the United States, with 13 million listeners each week
in over 600 radio stations.
Ramsey also founded The Lampo Group, a personal finance
consulting firm. His money management class started with 37 students, but after
a few years, enrollment had warned more than 350 students.
Following the success of The Lampo Group, Ramsey began
co-hosting The Money Game, a radio show focused on personal finance, with his
friend Roy Matlock. At the same time, he released his first book, Financial
Peace, and got his growing radio audience to help sell it.
Ramsey then launched The Dave Ramsey Show, a spin-off radio
show. People from all over the country call to ask Ramsey a variety of personal
finance questions in each episode.
How did Dave Ramsey make his fortune?
Ramsey began selling property after graduating from college, in
part because he was able to secure financing for his businesses through family
connections at local banks. His real estate portfolio was worth $4 million at
the age of 26, and his net worth was just over $1 million.
But his initial success was fleeting, and he ended up filing for
personal bankruptcy protection at the age of 28 in 1988, due to the acquisition
of his largest lender, to whom he owed $1.2 million, by a larger bank. The bank
required Ramsey to pay off the entire debt within 90 days. Another bank called
him for $800,000 shortly after receiving his first notice of demand. Ramsey was
able to pay off most of the debt, leaving $378,000 in debt.
Since filing for personal bankruptcy in his early years, Dave
Ramsey, now with an estimated net worth of $200 million, has come a long way,
and could be considered living proof that anyone can turn a bad financial
situation around. Ramsey made his first million, lost it, and then quickly
rebuilt an even bigger fortune.
Ramsey is open about his investment strategy. He advises his
followers to avoid investing in individual stocks and instead invest in mutual
funds with long histories of good performance. Its equity investments fall into
four categories: growth, growth and income, aggressive growth, and
international.
Dave Ramsey also has a portfolio
of rental properties in addition to mutual funds. His real estate investment
philosophy is based on buying properties without resorting to debt financing.
Dave Ramsey's 7 Small Steps
Baby Step 1: Save $1,000 in an emergency fund
The baby's first step in Ramsey's plan is to save $1000 in a
savings account. Dave Ramsey's baby steps plan is designed for people who live
paycheck to paycheck, which means they constantly spend the money they earn on
everyday expenses and live from payday to payday without leaving room to save
anything. of what they do.
Baby Step 2: Pay off all debts (except the house) using the
debt snowball
Dave Ramsey's Baby Steps Plan recommends paying off all debt
except your mortgage or other home loan, using what's called a debt snowball.
What this means is that you start with your smallest debt and use the extra money
to pay it off as quickly as possible.
Once you've paid off one of these lower balance accounts,
transfer your balance to another similar account (or add $50 if necessary) to
continue reducing higher balances.
The idea behind Dave Ramsey's baby steps plan is that by
targeting the smallest debts first, people can feel victorious after each
victory, leading them to continue their good progress instead of getting
discouraged because they don't see results. immediately or losing steam.
Baby Step 3: Save 3-6 months of expenses in an emergency
fund
Some people don't think about including emergency savings in
their budget because they can't afford it yet. But if you never have an
emergency fund, then the reality is that your credit cards or personal loans
will be your last resort when the unexpected happens, which means that even a
small problem could quickly spiral out of control and turn into a financial
disaster in no time. full rule. for those who do not have money saved for
emergencies.
Dave Ramsey's Baby Steps Plan recommends saving three to six
months worth of expenses as soon as possible and keeping this money separate
from funds used in other parts of life (i.e. groceries). The reason behind this
strategy is that it doesn't matter what event comes up at work, home, or
otherwise.
Baby Step 4: Invest
15% of your household income for retirement
Dave Ramsey's Baby Steps Plan recommends saving three to six
months worth of expenses as soon as possible and keeping this money separate
from funds used in other parts of life (i.e. groceries). The reason behind this
strategy is that it doesn't matter what event comes up at work, home, or
otherwise.
The key to successful Dave Ramsey baby steps is making sure you
have a safety net in case something goes wrong, because the reality is that
eventually everything will go wrong without any preparation. If something
happens, your credit cards can take care of things while you get back on track
by following Dave.
Baby Step 5: Save for
your children's college fund
In this step, you have paid off all your debts and are now
saving for your children's college fund. Dave Ramsey small steps. This is not
an easy task to do and will require a lot of work on the part of the parent,
but if you start early enough it can be done.
Baby Step 6: Pay off
your house early
These small Dave Ramsey steps will depend on your current
financial situation, but if you're doing the small Dave Ramsey steps, then of
course this is a goal! Paying off the house early means there is no mortgage to
pay and also provides more cash for retirement. This can be accomplished by
refinancing or simply making additional monthly payments.