The Rachel Cruze Show - How to Be a Millionaire on a Low Salary

Starting point is 00:00:05 So did you know that it's actually possible to become a millionaire without ever making a large salary? It is true, you guys. And I recently came across a video that went viral of a parking lot attendant whose net worth was $500,000 and growing. And he was just working an hourly job with pretty much an average salary. So it's very hopeful out there. And we're going to dive in and talk about this subject because I really do believe that anyone can build wealth over time, and become a millionaire with the decisions they make with their money right now. And to prove it, we're going to look at some incredible stories from the Ramsey Show callers that have called in to talk about this very thing.

Starting point is 00:00:43 Now, before we get started, make sure to like and subscribe to this channel and share it with a friend who comes to mind and needs some of this encouragement. All right, you guys, so let's start off with our first caller, and this was Jessica, and let's see how she did it. Jessica is in Mobile, Alabama. Hi, Jessica, what's your net worth? Yes, hi. 2.3. Good for you. And give me a little breakdown by category.

Starting point is 00:01:08 1.2 is in investments and 1.1 is in real estate and tax liens. Okay. Good for you. All right. And how old are you? 52. 52. And how much of this did you inherit? A hundred thousand from my father's death in 91 and 200,000 for my mother's in 21. All right. Now, your best year on working income and your worst year at working income. The worst was 12. Okay. What do you do? I'm a chiropractor. Ah, okay. What do you attribute this net worth to at 52 years old? What would you say the secret sauce is?

Starting point is 00:01:48 Being so scared to be poor again. I was poor until I was 40, and I didn't ever want to go back there. I want to rinse out my Ziploc bags anymore. I want to buy new ones. Wow. So once you started making money, you just lived on. very little and saved and invested the rest. Totally. And so what you will see, though, when you dig into stats around millionaires, is that actually 79% of them do not inherit anything. And I would say even in her case, you know, sure, that helps for sure what she inherited. But what you do with that money, if you have any inheritance, again, shows the habits of your life and your money.

Starting point is 00:02:24 Is it going to be wasted? Or are you going to use it to actually help your life and your future? And so the idea, again, that she kind of just worked on average, right? 80 grand was the most she ever made, and she is killing it. All right, for our second caller, here is Brandon. Brandon in Lubbock, Texas. Brandon, what's your net worth? 1.2 million. Cool.

Starting point is 00:02:47 Give me a little breakdown by category on that, Brandon. Most of it is real estate or home with acreage and shop. And some farmland is right at about a half a million. And then we have a safe. savings investments, IRAs, college funds, just regular retirement savings is $345,000. And then I have farm equipment and truck that conservatively estimates worth about $200,000 if you were to sell it all today. Gotcha.

Starting point is 00:03:16 And then the rest of it is just cash in the money market at the bank, $170,000. Cool. How old are you? I'm 44. Good for you. What was your best year that you've income-wise since you've been working in your worst year since you've been working? Well, worst year was being in farming.

Starting point is 00:03:35 There's some years that were pretty lean. Had down to net operating loss a couple of times. And then the best year, it's been the past couple of years, have been around 100 or 120,000. Okay, cool. How much of this did you inherit, by the way? I did not inherit anything. My grandfather did let me use his older equipment when I started,

Starting point is 00:03:56 and he basically, over time, gifted that to me, but it was older and not worth a lot, but it did help immensely getting started. Yeah. But yes, yeah, that's the way to do it. Just start slow. Be real careful with expenses. Be careful with lifestyle creep. It's easy to have a good year, a couple good years.

Starting point is 00:04:15 You start increasing your lifestyle, and then you have a drought or failures and so forth. And then it's pretty easy in your world to have a combine that costs more in your house. That's absolutely right. He did not have any inheritance, but he really avoided lifestyle creep. And I think that is one thing that is so easy to do is as your income grows, you take that margin and use it for yourself, right? And that's not a bad thing. But I think being intentional that it doesn't just all go to spending and going to things

Starting point is 00:04:47 that go down and value. But use some of that and say, yeah, I'm going to give a little bit more, save a little bit more, and enjoy some of it. But again, it's not this like, hey, I'm going to make this much. more, so that means I'm going to spend that much more. So that lifestyle creep is real, and he did a great job kind of taming that and using his money well, and he's killing it too. So great. But before we talk about what's most surprising about these calls, I do want to tell you about one of our sponsors, delete me. Want to know something that absolutely blew my mind? Well, one third of the U.S.

Starting point is 00:05:17 population's background info is now public. So for 115 million of us, our info is just out there for anyone to find. And this is stuff like our names and addresses and phone numbers, personal details, I mean so much. And that is why I love and use Delete Me, because they find and remove your information from hundreds of data broker websites that buy, sell, and trade your personal data. So take control of your online privacy with Delete Me. Individual DeleteMe plans are as low as $9 a month. So sign up today at join DeleteMe.com slash Rachel for 20% off or click the link down in the description. All right. So there was one similarity between these two callers that really stood out because did you notice that they had, I would say, pretty like average careers, if you

Starting point is 00:06:03 will, I mean a chiropractor and a farmer. And they didn't earn crazy high salaries either. So believe it or not, average careers are actually common among millionaires. And the largest study of millionaires ever, data revealed that the top five careers for millionaires were engineer, accountant, teacher, manager, and attorney. So when you look at this again, it's not like these flashy big careers. my attorney is kind of nice. We'll be honest with that. But in general, you guys, I mean, you look to see, okay, the habits of the person with the money they make is everything. So you don't have to make a crazy big salary, you know, or be like a venture capitalist or

Starting point is 00:06:43 it's like wild. So again, investing overtime consistently is what it is all about. And if you're not currently investing, maybe you're hearing about this for the first time. This is a subject when it comes to your money that is so key about building wealth. So once you are debt-free, everything but your mortgage and have a fully funded emergency fund of three to six months of expenses, then you want to start investing 15% of your income into retirement. So when you are investing your money, what's happening is compound interest. So when you put money in the markets, what it makes that year, the return that it makes, you know, it's anywhere from like 8 to 12% depending on the year, but let's say 10%, you make 10% of your money. And then if you never even add

Starting point is 00:07:24 another dollar to that investment, then the next year you make 10% on not just what you put in, but also with the 10% growth you had the year before. So it just ends up compounding over time, which is phenomenal. And if you consistently keep putting money towards all of that, your money continues to grow. And it is one of the best ways to build wealth long term. But it does take some discipline. And you have to have the margin in order to invest. Because a lot of people are like, oh my gosh, I mean, I don't have enough money with my income to cover my basic needs. So getting yourself in a financial position where you don't have debt and all those payments are freed up, you have a great cushion of savings in the bank,

Starting point is 00:08:03 and then from there you're really in a great spot to start investing. And we have a great tool called the investment calculator that you can check out. I'll put a link down below, but you're able to put in some numbers and actually see this in real time. Okay, so if you take the national average salary, it's kind of in the mid, you know, 60,000s, if you will, and you invest 15% of that every single year from age 35 to age 65. With compound interest, you're going to have around $1.8 million in retirement. And during that time, you really only contributed 16% of that, so $290,000 of your own money. Everything else is compound interest. That is the beautiful thing about it. And if you think that that's amazing, what if you started even sooner? So let's say you started at 22 years old and you

Starting point is 00:08:47 invested the same 15% of that $65,000 salary, just 13 years earlier, you would have $6.9 million at retirement. You guys, I mean, that's over $5 million of an increase in the example before. So that is the power of starting early. So the consistency starting early is what is so, so key. So get yourself in a position to be able to do that because it is one of the best ways to build wealth long term. So by now, you start feeling really empowered that you can do this and becoming a millionaire,

Starting point is 00:09:17 is actually easier than you think. It does require some discipline over time, but anyone can do it, and that's the amazing thing. So if you're wondering if it's the right time for you to start investing, then take the get started assessment to find out more about the baby steps, which is going to help you get in a position to invest. So I'll put that link in the show notes. All right, you guys, remember to take control of your money

Starting point is 00:09:38 and create a life you love.

The Rachel Cruze Show - How to Be a Millionaire on a Low Salary

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