The Rachel Cruze Show - The Biggest Lies We Believe About Wealth

Episode Date: December 5, 2022

In this episode, we tackle some common lies and misconceptions about wealth building (and it gets a little controversial). We’ll go over the four biggest lies people believe about becoming a millionaire, address the question of whether or not building wealth is a sin, and reveal the biggest danger to your net worth so you’ll know what to be aware of!   Here’s what’s coming up: ·      The 4 Biggest Lies About Becoming a Millionaire ·      Is Building Wealth a Sin? ·      This Is the Greatest Danger to Your Net Worth   Helpful Resources: Christian Healthcare Ministries Financial Peace University EveryDollar                                                 Sponsors pay the producer of this show, The Lampo Group, LLC, advertising fees for mentioning their services or products during programming. Advertising fees are not based upon or otherwise tied to any product sale or business transacted between any consumer or sponsor. The following sponsors have paid for the programming you are viewing: Christian Healthcare Ministries.   Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices

We live in a culture that is so obsessed about what we have, what we look like, how much money we make, how much money we have, and it ends up being part of how we define ourselves. And that can be very dangerous. Hey guys, welcome to this episode of the Rachel Cruz Show podcast. I'm so glad that you're here. So in this episode, we're going to talk about the lies we've been told about wealth. I'm going to talk to you about the greatest danger to your net worth. Then I'm going to help answer a question I've heard a lot in the first.

faith community. Is building wealth a sin? But first, let's talk about the four biggest lies about becoming a millionaire. Take a listen. We're going to look at the largest study ever done on millionaires. Yep, that's right. Our team here at Ramsey Solutions pulled 10,000 random millionaires across the country. And again, for this, your net worth, their net worth had to be a million dollars or more. So what you own minus what you owe. over a million dollars. And we wanted to see, okay, so where did their money come from? How do they live? What do they look like? And let me just say this. Some of the findings might shock you. So let's dig in to the four most common money myths about millionaires. So the first one is that millionaires are born rich. You know, their trust fund babies. They just are born into wealth and all the wealth stays within just these certain families and no one else can be wealthy. It's all passed down. Well, that's not actually the case.

That is not what the data shows. In fact, in the U.S., most millionaires, about 80% receive $0 in inheritance from their family. Nothing. So 80% are first generation wealthy, where they decided, I'm going to work hard, invest, do things I need to do to build wealth, and they did it.

Only 3% of people received $1 million or more. 3%. And in fact, the majority didn't even grow up with a lot of money. So most of these millionaires today, again, it's not where they came from. And according to the survey, 8 out of 10 millionaires come from families at or below middle class. So that's what's crazy is that majority of millionaires in America today actually worked for their wealth. Again, they're that first generation rich. So they didn't wait on someone, you know, riding in on a horse with a million dollar check. they actually rolled up their sleeves, got to work, and that is encouraging you guys,

because that means the average person out there really can be strategic, work hard, be wise with their money, and win. All right, for the second myth, millionaires have super high-paying jobs. It's like, yeah, it's easy to be a millionaire when you make $3 million a year. Well, what's interesting is that's not the case

for the average millionaire in America. Only 15% of millionaires were in senior leadership roles or C-suite rolls, and almost all of them said that they got their wealth because they worked hard, not because they had big salaries. So again, the ones that actually, you know, have, like, nice jobs where they make good money, they would say, yeah, it wasn't all the money that helped me, you know, gain wealth and build wealth. It was the hard work of getting there in the long-term play, which I think is so, so interesting. And in fact, a third said that they never made six figures in a single working year. Isn't that unbelievable? So you're thinking, okay, so what are these jobs?

Who are these millionaires? What do they do for a living? Well, the most common jobs were accountants, engineer, teacher, lawyer, and in management. So again, that shows that building wealth is not all about the exact money that you make or the type of job you're in. It's about how you manage it. And yes, your income helps, of course, the higher your income, the more money you have to use. but it's more about how you handle it, which makes sense because your habits with money are so important, right? Like if you have bad habits, but then you get a big income, your bad habits just become bigger,

and you have bigger bad habits with money. It's not like it fixes your habits. So what helps build wealth over the long term is you and what you do with your money. All right. Up next is that millionaires spend whatever they want, whenever they want. and that's just not true. So millionaires are very careful about their spending.

They're not careless. In fact, almost every single person in the study said that they live on less than they make, and nearly three-fourths of the millionaires have never carried a credit card balance. And these millionaires also said that they spend $200 or less each month on restaurants, which is fascinating.

So they're very intentional. They know where their money's going. And 93% of them use coupons, either all or for some of the time when they're shopping. And also, I love this. They have no problem buying a used car, living in a modest neighborhood, wearing off-brand clothes.

They don't really care about keeping up with the Joneses. Yeah, they don't care because they actually have money. They have money in the bank, and they're like, yeah, I'm good. I'm good. And so what I love about this is that a lot of them have realized that instant gratification, it's fun, but delayed gratification is so much better. You know, what you sacrifice today really sets you up for tomorrow.

They have let their money work for them. So again, instead of spending everything, they've been smart with it, they've invested it, which we're going to talk about in a second. But they let their money work for them. They don't go and just mindlessly spend. So it's really, really refreshing. And the last myth we're going to break down

is that millionaires are made by striking gold. Sometimes we think, well, they had a big break. They had that one, like, single stock, that went crazy. Or they invested in that one piece of real estate. And, whoa, look at them now. But for most millionaires, there was not a get-rich-quick plan. So instead, three out of four of them said

that they just consistently invested over a long period of time, and that was a huge reason for their success. So they didn't risk their money. They took their money and said, okay, how is my money going to work for me? Not like in this, like, you know, single-stock investments

or this opportunity that you can't pass up or Bitcoin or whatever the thing is. It's like, no, what, where is my money going to make money? What has a long track record? Like, all these questions that are wise, you guys? wise, and that is where they put their money. So 80% of them said they invested in their company's 401k plan, and 75% of those surveyed also said they invested outside of their company.

So again, their 401K, this is a big part of it. You know, I host the Ramsey show, and we take calls from people all over the country in all different situations. And there was a lady, she was like 63, and she said, well, I don't know if we should pay off our mortgage. We have $16,000 left. you know, we have $60,000 in the bank, but we're worried because of inflation and all of this, and we're, you know, kind of doing the math and talking through. And I was like, well, do you

have anything in retirement? She's like, yeah, $2.3 million. I was like, what? Two point three million dollars. And I loved it because she's, you know, she's like, yeah, my husband and I, we worked hard, we invested. That's what's in our retirement. And I'm like, that's amazing, absolutely amazing. So as my dad, Dave Ramsey always talks about, the tortoise and the hair, that's the picture of it, you guys. It's not like this quick, oh, we're going to do something flashy, fun and it's going to be like awesome. It's usually slow and steady. It's over time. And when it comes to building wealth, most things that last are done over a long, steady period of time, not just this flash in the pan. So I think all of us is very good news for us, you guys, because here's the deal,

building wealth, there's not like a secret to it. It's not confusing. It's very simple, very straightforward. And even if you don't know where to start, I would recommend sitting down, with an investment professional. I'd recommend a smart vester pro that we endorse here at Ramsey Solutions, but sitting down with someone that knows what they're doing because one of the best ways

for you to build wealth is through investing. And you want someone who has the heart of a teacher that has experience to know what is best for you and your family. So just go to Ramsey Solutions.com and click Ramsey recommends

to get connected to them. All right. Again, I'm glad that it's not a big secret. It's not a big secret. This is pretty much common sense. It doesn't require you to jump through all these impossible hoops, but 10,000 millionaires can show us, hey, here is how you build wealth and wealth that lasts.

And again, it's so much about your habits, you guys. There's so much about you and what you can do. Because if you're not great with money and you spend everything you make, you're not in the habit of saving, you're not in the habit of giving, and you make a bunch of money, you're going to just spend a lot of money.

That's all you're going to do. You know, you don't have these other muscles. So always be giving, be saving, and be spending. You want to do all three things with your money. But you also want to be able to say, hey, I'm going to create these good money habits, and I'm going to do this over a long period of time because that consistency is what builds wealth. And also, you can learn more about this study in Dave Ramsey's book, Baby Steps, Millionaires, because there are more and more and more ideas around this.

that is so important. So make sure to check out that book. We haven't really dug into this before, but I kind of just want to hit it head on because I am a Christian. And so there is a lot of, you know, chatter out there at times that they're like, well, if you're a good Christian, you wouldn't have money or you wouldn't be preaching about money.

You're a prosperity. And it's not all about money. And Christians shouldn't have money. And it's like all these, all these, like, attitudes out there. And I'm like, you know what? Let's just like hit it right on. Okay? And I'm not a theologian.

I did not go to seminary before. So take everything I'm saying with a grain of salt because I want you to actually read and research on your own as well. Don't take what I say as complete truth, even though it's what I believe. But go and investigate as well because one of the principles that I live by is that I use scripture to look through life, right?

It is my lens at which I look through life. And money is one of those things. And here's the deal, you guys. There are more scriptures on money than heaven and hell combined. There is a lot that the Bible says about money, and it often involves a lot of layers, so you really do.

You want to study it well. So again, if you're curious, I would really recommend you go dig in for yourself as well. So first and foremost, I want to say that money itself, you need to understand, is amoral. Money is not good, money is not bad. Money does not have morals.

It just sits there. It's a piece of paper. right, cash. It's just like a $100 bill. It's just sitting there. But when you put it in the hands of a person, then we decide whether we use it for good or we use it for bad. But some people have put morals to money and they've said, well, money is evil. That sheet of paper is bad, bad, bad, and if you have a lot of that paper, you should feel really bad about yourself because you're an evil person. And that's not true at all. And again, if you look through it through a religious, spiritual lens, and again, for me, through Christianity, when you look at the Bible, there are a lot of

scriptures about money, but none of them say that specifically. In fact, we see the opposite. We actually see a lot of examples in the Bible about incredible, faithful men and women who have massive wealth that they do pass down, and they are completely devoted to God. They are some the most godly people, you know, even if you're not a Christian, you've probably heard of Abraham, maybe Joseph, Job, Solomon, Lydia, all of these people in Scripture have wealth, and they actually do it, they honor God with that wealth. And so I think one of the biggest misconceptions that I hear and one of the verses I hear thrown around all the time is that, well, money is the root of all kinds of evil. It says that in 1st Timothy. And actually it's not what it says. In 1 Timothy chapter 6,

it says that the love of money is the root of all kinds of evil. Money is not evil. The love of it is, though, and that is true. That gets us in trouble, right? When it does become your God, it's the thing you worship, it's the thing that you think is going to bring you life. And it's the only focus you have is just money, money, money, money, money. And yeah, that's going to point you towards a pretty empty and an evil life because it's not. That's not true. But it's the love of it that makes it dangerous, not the money itself. So you want to be really careful with that. In another verse, I hear people throw around that I've heard many different scholars and theologians

and sermons on this one. And everyone has different opinions on it. But again, a scripture that is quoted a lot. In Luke, it says, indeed it is easier for a camel to go through the eye of a needle than for someone who is rich to enter the kingdom of God. So people kind of stop there and like, well, I guess that means we should all be poor.

And that's not the case. And in fact, I'm thankful that. That's not the case. That's not what that scripture actually means, because we're going to go on and hear more in the context of it. Because here's the deal. If that was true, then all of us in America are screwed because we all have the top 1% of the world's wealth. So if that passage was true, that means all of us that make any more than $34,000 a year that we're considered wealthy in the globe. Like, that is wealth. So then that means none of us get to go to heaven? No, that's not true. What you need to realize is that there is a passage right after that that actually points to the point of that other passage.

And the point of it is God's grace. So right after Jesus says, it is easier for a camel to go through the eye of a needle than for a wealthy man to enter the kingdom of God. It says right after that, they who heard this said, then who can be saved? But he, being Jesus said, the things that are impossible with people are possible.

possible with God. So actually, it's not a passage about condemning wealth. It's actually showing that Jesus is the only way, the only way to get to heaven, not through someone's own efforts, but by grace alone through Him. That's what that scripture is talking about. And people just focus on that one, but you have to read the rest to get the context. And I think that's what's so difficult is a lot of people, even in the Christian community say, well, they just pick out one verse and they use that. And it's like, no, it wasn't in context. You got to see it all. You've got to study it to really know what's going on. So, again, there's hundreds of these verses we could go and pick through. But those are the two that I hear quite often people say that are not correct. They even misquote it. It's not even true.

That you really want to see because here's the deal as well, that when you have a good perspective of money, if you are a Christian and you say, okay, I am not the owner of this. I believe everything that God has given me from my job to my house, to my money, to my marriage or my kids, like everything that he has given me, I am to manage for him. That he is the owner and I am just the manager. And when that view is shifted in your mind, it also changes the way that you handle your money. So again, if a Christian says, well, all this is mine, I'm going to hold on to and do whatever I want and they start to become selfish and greedy, yeah, that's where money gets dangerous. And you have to be very, very aware of that.

that's why scripture constantly is talking about giving and generosity and opening your hand and saying, God, it's not mine in the first place. I'm here to manage it for you. And I think that it is a beautiful thing because God gives us blessings to faithfully manage so that we can care for our families. We can care for others. We can actually enjoy the money as well. Scripture talks about that. And so again, we don't want to be scared of money or ashamed of money. We can actually use it as a tool to do and incredible, incredible things. So again, there's a lot we could talk about on this topic, but I just constantly was hearing all these rumblings, and I just want you to know where I'm coming from, as a believer, as a Christian, teaching you guys to build wealth and to win with money, because scripture also says you can't serve two masters.

You can't serve God and money. And when you are in debt, you're living paycheck to paycheck, you're living beyond your means, you're constantly giving into instant gratification, and you can't sleep at night, you can't function, you're stressed out. there's a point that money becomes such a burden to you that some would say, yeah, it's hard.

It's become a God to you because of how much mental space it's in. So that's one reason I want you to have freedom from it so it doesn't have control over you. So I know this was a little bit of a different episode, but I'm so thankful to do it and so thankful that you guys were watching this because I don't want that to feel intimidating and I don't want you thinking, oh gosh, well, the Bible says, you know, that all this is bad because that's not true. That's not true. So I love kind of saying, hey, that's a lie. Let's hit it with the truth because I think it's really, really important.

Your net worth is not your self-worth. But sadly, our net worth, it is a number that we have in front of us, right? Our money has numbers to it. Your debt, your income, like there are numbers attached to your money. Where other parts of your life, that's not the case, right? Like I could say, I'm an awesome wife. Marriage is so great right now. There's not a number to that.

I can't be like, I'm like at a 95 or something. Or I could tell you, I screamed at my kids again this morning to get ready for school and I'm running around. I was not a good mom this morning. 32. Like there's not a number for that, right? But your money, there is a number. And that's what ends up defining us because it is a number right in your face. And that number can carry a lot of emotion for people.

It can on one side carry a lot of embarrassment, a lot of shame, a lot of regrets, a lot of exhaustion, a lot of hopelessness. and then for some people on the other side, that number carries a lot of pride, a lot of keep trying to keep going, keep going, keep going, keep going, this unhealthy drive just to get more, more, more because you find your value in that. So either way, I just want to nix it. Again, your net worth is not your self-worth. So what is your net worth? Let's talk about that.

Your net worth is what you own minus what you owe. So it's the total value of your assets. So if you have a house, car, investments, cash, any of that, which you own, minus what you owe, all of your liabilities. So mostly debt, credit card debt, student loans, your mortgage. And so you calculate that number. And that number, what you own minus what you owe, is your net worth. So let's just do a little example here of my made-up friend, Sam. So we'll look at Sam's assets.

So she owns a home, a valued at. at $210,000. She has a 401k with $60,000 in it. Her car is worth $15,000. She has $7,000 in savings. She has $2,000 in her checking account. All of that added up, Sam has $294,000 of total assets.

Now, what does she owe? She has credit card debt up to $12,000. She has student loan debt of $35,000. She has a mortgage of $175,000. She has a car loan with $10,000. She has medical bills that equal $1,000. So all of her debt or her liabilities added up to $233,000. So when you look at what she owns, again, her assets of $294,000 minus what she owes $23,000.

That means her net worth is $61,000. So, again, I tell you that number because I think it's very important for you to know that, not to identify who you are, but for you to know where you're at financially. Again, knowing your assets, like how much is in your investments, how much is your car worth, how much is your house worth? Like, knowing that information is good. And then also, I want you to know what you owe if you owe anything, because it's going to be part of getting out of debt. You have to know that number and say, okay, here are my liabilities, here are all my debt, and actually face it. So some people don't even want to know their net worth because it's going to

stress them out. But knowing, it actually gives you power to start making changes in your money habits. So again, with this, though, this concept, it's a great motivator just to know what it is for the knowledge aspects. But what ends up happening is we become obsessed with that number. And that number starts to determine who we are. And that's where it gets really, really unhealthy. So for Sam, my imaginary friend, that number sure can affect her options in life, right?

If she has payments every month, all of that. but it has zero power to add or to take away from who she is. And your self-worth has to be rooted in things that you believe and things that you value. And this is really important. And I would recommend you guys to really think about this, to know where am I valued? And I would also challenge you not to put your value in something that can be taken away. If your value is in a job that you have and it's gone tomorrow, who are you? if it's in a role that you have in life and that is taken away, then who are you?

If it's in what kind of car you drive and it's taken away, who are you? So when you eliminate all of that to put your value of who you are into things that cannot be taken away, gives you power to yourself to have a level of peace and to have a level of contentments. And so, like, for me, as a Christian, I'm like, my value is that I'm God. I am a child of God. Everything else can be taken away, but that is the truth of where I rest. Not saying that that would be really hard if everything was taken away. And I'm like, oh, no, I wouldn't send my kids, no.

But if that all happened, right, like where does my value rest? And so I would really, really challenge you guys, think about that. And again, the problem, the conflict comes in is that we live in a culture where our value now is put into so many other things. It's put into cars and vacations and houses. jobs and salaries and your net worth. So it's a really good thing just to examine you guys, to really, really examine and to say, okay, I'm not going to put who I am by this number that's in my checking account or this number of debt that I owe because it's not who you are. And when you

start to believe that, then that really does. It disintegrates your heart and your soul and who you are. And so you just want to be careful, again, that if you've made big mistakes with money in the past, that this feeling of that you're worthless or regret all of that, you have to leave that aside because your past mistakes are not who you are in the future. And on the flip side, if you've won with money and you've done awesome, if that becomes your only goal in life, then that starts to build a pride and a level of security that's really dangerous that you have to be aware of as well.

So again, this money idea is really important. Money is a tool to be used. I don't want it to take over your life. but we also want to make sure that it does not define who you are. So some of the steps that, you know, I kind of walk through in my own life with this is truly finding that contentment piece. Like contentment is huge. It has such great gain in your life when you are content.

And I think it starts with gratitude, being thankful for where you are and what you have. It's also having a level of humility. And I love, C.S. Lewis says that humility is not thinking less of yourself, but it's thinking of yourself less. when you actually can look up and the world is not centered around you and you actually see people around you and your time and your relationships and your money and there's a level of generosity there. That, to me, breeds contentment.

And I talk about all of that in the contentment journal where we spend 30 days in gratitude, 30 days in humility and 30 days in contentment. I think this is such, such important work, such important topic. So if you want to check out the contentment journal, I will leave a note, a link in the description. so make sure to check it out. I am. I'm really passionate about this because I think it's really, really important.

Building a solid financial foundation that we talk about a lot on this show from the numbers of the emergency fund and getting yourself out of debt, like all of that, investing 15% of your income, like all of that is such an important financial foundation. But there's also a sole foundation that you want to be working on as well,

and that's who you are. So remember you guys, your net worth is not your self-worth. Oh, it's powerful stuff and something we all need to be reminded, constantly because of the world that we live in. Well, thank you guys so much for listening to this episode. If you have not subscribed to this podcast, make sure to hit that follow button. And if the spirit leads, you can leave a review. And as always, make sure to take control of your money and create a life you love.