Dave Ramsey Recommends Following These 5 Habits of Millionaires

Could adopting these habits help you get rich too?

Rich people often approach their financial situation differently from people who struggle more with their money. For those hoping to get rich themselves, it might be worth watching what the financially successful people do.

In fact, personal finance guru Dave Ramsey has suggested following five key habits common to millionaires. Here’s a closer look at what they are.

These are the five millionaire habits Dave Ramsey thinks you should be adopting

The five millionaire habits that Ramsey supports are:

1. Read often: Using free time to read allows the wealthy to become leaders and increase their knowledge. Ramsey believes that reading is often a habit that helps people build wealth.
2. Adopt deferred gratification: By making short-term sacrifices, rich people can be successful in the long term. This can include living in smaller homes or driving cheaper used cars rather than focusing on short-term pleasures.
3. Avoid debt: Ramsey thinks it’s a myth that millionaires use debt as a tool, and he suggests that instead of borrowing, it’s best to save money and pay cash for purchases.
4. Budgeting: Ramsey believes that it’s impossible to build a million dollar net worth without living on a budget that provides you with a financial plan to be successful.
5. Donate to good causes: Ramsey actually suggests that the desire to give to others is one of the reasons rich people continue to build wealth even after they have amassed a lot of wealth.

Should we listen to Ramsey’s advice?

Adopting several of these habits can only improve your personal and financial situation. After all, no one has ever been worse off by improving their knowledge through reading. And finding a budgeting method that works can definitely help you make better use of your money by controlling where it goes and making sure you spend it on the things you value most.

But, Ramsey’s advice tends to be a bit too general. His suggestion of avoiding debt may be based more on his own beliefs than on the actual habits of most millionaires. Ramsey is a big believer in avoiding debt, but the reality is that many wealthy people To do use debt strategically.

Ramsey gave the example of Warren Buffett as a billionaire who followed these smart habits because he has a modest home in Omaha. But Buffett took out a mortgage to buy a second home in 1971, rather than paying cash for it, even though he could easily have afforded it. And he did it because, as he explained, he “could probably do better with the money than have him buy the whole house.”

Buffett only put $ 30,000 on the $ 150,000 house he bought. He borrowed the rest and bought some Berkshire shares with the money he does not have spend for the house. The stocks he bought were recently valued at around $ 750 million, which is a far more impressive return on his investment than he would have gotten if he had simply avoided mortgage interest.

This example shows why there is no one-size-fits-all approach to building wealth and why following general rules such as “avoid debt” may not always make sense. Instead, it’s important to consider the opportunity cost of each financial decision you make and design financial habits that are right for your specific situation.