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Full disclosure: not a Ramsey fan. This seems more like a list of what not to do if you don't want to be poor, rather than what to do if you want to be rich.
"if you make up percentages and include them in your list of wisdom, people are 85% more likely to believe what you are saying"
seriously, how are we supposed to believe all those % numbers that he is putting in there? most studies that you read about these days are a bunch of made up crap.
I agree.
How many "wealthy" did Ramsey actually poll? I can just imagine Paris Hilton's "to do" list.
"if you make up percentages and include them in your list of wisdom, people are 85% more likely to believe what you are saying"
seriously, how are we supposed to believe all those % numbers that he is putting in there? most studies that you read about these days are a bunch of made up crap.
Ramsey used to be a great one for helping people start the path to financial health, but I think he has lost his way with this. Especially after being questioned Ramsey's response was to insult those who disagreed. This was a step I missed in making assumptions myself, and I was wrong to do it. Thanks.
Ramsey used to be a great one for helping people start the path to financial health, but I think he has lost his way with this. Especially after being questioned Ramsey's response was to insult those who disagreed. This was a step I missed in making assumptions myself, and I was wrong to do it. Thanks.
I don't think the author meant to infer that correlation = causation. I didn't take it as the difference between being Bill Gates and being or a welfare queen was listening to audio books during your commute.
I took it as people who accumulate wealth also tend to do these particular things at a greater rate than those that tend to live paycheck to paycheck. I can be "poor" and have a household income of 80k because I have 2 new cars a huge mortgage, etc.
The truly poor obviously have many things to contend with that would stop them from doing many of these things, while the truly rich probably have many things that aid them to be able to do those things.
The way I interpreted the article was your average middle/upper middle class person that ends up accumulating wealth vs. your average middle/upper middle class person that ends up barely making it.
Interesting list. It seems to me there is 1 overarching theme.
The ability think beyond the short-term.
I agree, but when you aren't sure when your next hot meal will be or if you'll be able to pay rent next month, how is long-term thought even possible?
I've been in this position before, anxiety about simply surviving takes over. Just getting to a job every day and doing good work to be able to get food & pay for a roof over your head is paramount to setting goals or getting in a good workout at the gym... The list is pretty common sense to me, and I've never been rich, but I have been exposed to rich people.
The really rich people I know dont buy things all the time. They dont go out buying Coach purses, Armani suits, jet skis, their wives dont spend all day at the mall swiping cards, the men dont spend all day buying sports cars and gambling.....
What do they do? Float in their pool, take their boat (older but good enough) out, play gold and hang out at the Country Club, spend time with family, etc.
What do they buy? Real estate, investments, education for their kids/grandkids....things that MAKE them money, or make their family money.
I don't think the author meant to infer that correlation = causation. I didn't take it as the difference between being Bill Gates and being or a welfare queen was listening to audio books during your commute.
I took it as people who accumulate wealth also tend to do these particular things at a greater rate than those that tend to live paycheck to paycheck. I can be "poor" and have a household income of 80k because I have 2 new cars a huge mortgage, etc.
The truly poor obviously have many things to contend with that would stop them from doing many of these things, while the truly rich probably have many things that aid them to be able to do those things.
The way I interpreted the article was your average middle/upper middle class person that ends up accumulating wealth vs. your average middle/upper middle class person that ends up barely making it.
He states that it is not 100%, but he really does in the paragraph below...
Quote:
This list simply says your choices cause results.
....
There is a direct correlation between your habits, choices and character in Christ and your propensity to build wealth in non-third-world settings. To dispute that or attribute hate to that statement is immature and ignorant.
I also stated that some are what I personally consider parts of a well lived life, and that some are bizarrely vague. I think they are good things to help yourself. However, I don't believe the assertion they have a direct correlation to wealth without something to back it up. I can provide stories of people that match, and don't match, the assumptions based on activities and their wealth...but that is also not good statistical data.
What I feel about it or not, there are refutations that have not been addressed. Weather I like the findings or not personally, the data has really no verifiable source or validation (the origional source dropped the article). Ramsey just says it passes "common sense" and that it is true because he thinks it is true. The failure of common sense is why we have science and data based decision making.
Critical thinking is divorcing what I feel about the conclusion, and what evidence actually supports the conclusion.
When a discussion was started on where the data came from, and the correlations, he just stated people who disagreed were ignorant and immature (provided in the OP's link). People who have the data and evidence behind the conclusions provide the backup for their claims and not just insult people. What I say is there are a lot of issues with where the data comes from, and what it says, and while I would like it to be true (especially because many are easy to do and could help people) I won't simply accept unfounded platitutdes.
I agree, but when you aren't sure when your next hot meal will be or if you'll be able to pay rent next month, how is long-term thought even possible?
Ramsey's list is more relevant to essentially middle-class people, who do have discretionary time and resources, but who could easily mismanage them and descend the socioeconomic ladder, or in the opposite case, seek to rise through application of concerted effort.
Luck plays a crucial role in all cases of success. But some people are better prepared to avail themselves of incipient opportunities. For instance, earning a high rate of return on one’s stock portfolio is strongly a matter of luck. Some people will be diligent about researching company fundamentals, reading annual reports and so forth, plotting long-term trends in return on investment capital and so forth, and choosing stocks accordingly. Others will buy stocks based on tips. Occasionally the latter group would do better than the former; luck DOES matter! But over time, presumably the former group will do better, because they’re better positioned for the implacable laws of probability to tend in their favor.
We should also note the role of culture and taste. Rich people read books not because reading made them rich, but because amongst the affluent, parents are more likely to inculcate amongst their children the desirability of reading as a hobby.
I agree about not placing much faith in specific percentages of how many rich people or poor people do such-and-such. But it stands to reason that the reading of books sees a higher percentage among the rich, than among the poor; a lower percentage of rich people watches TV; a higher percentage eats more nutritious food and exercises regularly; a higher percentage stays informed, and practices human-relations skills. It’s also true that some people who eat right, exercise regularly, read books lavishly, practice lifelong learning and so forth, nevertheless never achieve even a smattering of affluence. Good habits are important, but they don’t completely constitute destiny. And sometimes one fatal flaw (greed, misanthropy, fanaticism) can offset a vast collection of otherwise impeccably effective good habits.
The really rich people I know dont buy things all the time. They dont go out buying Coach purses, Armani suits, jet skis, their wives dont spend all day at the mall swiping cards, the men dont spend all day buying sports cars and gambling.....
What do they do? Float in their pool, take their boat (older but good enough) out, play gold and hang out at the Country Club, spend time with family, etc.
What do they buy? Real estate, investments, education for their kids/grandkids....things that MAKE them money, or make their family money.
That's one of the real benefits of wealth , TIME.
When you get to the point where you earned or inherited enough money that you can make enough passive income or mostly passive income on that lumpsum of money ,where you don't have to work then that is wealth.
Many people will buy the fancy car they can't really afford because they don't understand the concept of investing. You see it all the time people driving cars worth more than their yearly salary, it's nuts. People want the instant gratification.
This is why Ramsey says : "Live like nobody else, and then you can live like nobody else"
Most people are broke and they don't want to defer their gratification. They saw the ad and they want it NOW.
The whole concept that people seem to consider rocket science is:
1. Set a low cost of living for yourself/family
2. Invest the difference between your cost of living and income.
3. When your investments give you more than your cost of living, your rich. But keep working.
4. At this point keep investing, your wealth will build itself exponentially.
5. Hopefully youre getting raises, keep living on a small budget.
6. When youre investments are giving you enough that you can increase your cost of living and live just off of your investments, retire. You never know when your going to die, it could be tomorrow. Dont be gready and wait for "just a little more."
I had an uncle that did this. He lived off of 30k a year and made 90k between him and his wife. By 45ish he had about 3mill and decided to retire. His investments made him about 250k a year before tax and he moved to the keys, bought a house, a boat, and he and his wife drank, played, and sent their kids to college.
On the other hand people will usually make 90k, spend 80k, set aside 10k. Then they will raid the 10k periodically for a vacation or to repair the roof. This leaves them with about 200k in their retirement fund by 65...and they wonder why social security doesnt pay enough....
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