The Rachel Cruze Show - Who Really Wants to Be a Millionaire

Episode Date: April 8, 2024

💵 Sign up for EveryDollar today. Create a free budget!   Show Description Sometimes making more money creates more problems—but reaching your financial goals is still worth it. Today’s episode covers all the things you wouldn’t expect about millionaires. From investment habits to frugal car choices, you don’t want to miss it!   In This Episode ·      Things People Don’t Know About Millionaires ·      Become a Millionaire Making Less Than $60,000 ·      4 Sneaky Problems With Making More Money   Next Steps ·      🧐 Learn how I invested my money in 2023: https://www.youtube.com/watch?v=49hhHXAMFqo ·      🤯 This single mom paid off $180,000 of debt: https://www.youtube.com/watch?v=P-FebWGJjWw ·      💻 Start your wealth-building journey with Financial Peace University: https://www.ramseysolutions.com/ramseyplus/financial-peace?gad_source=1&gclid=Cj0KCQjwwYSwBhDcARIsAOyL0fiqS0Xl9cnP74k0AoehKs8PjbdhfdkF6m8OcsuqAxEQxq_QBlswI1saAgqcEALw_wcB ·      ✅ Find out which Baby Step you’re on and what to do next: https://www.ramseysolutions.com/dave-ramsey-7-baby-steps?gad_source=1&gclid=Cj0KCQjwwYSwBhDcARIsAOyL0fj4T77fPCb9M4N8vAYj2V5GaI3YD3ALZi57RHLo7tiGYX_O0sKPozIaAs0sEALw_wcB   Offers From Today's Sponsors 🏥 Learn more about Christian Healthcare Ministries.   Listen to More From Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership Learn more about your ad choices. Visit megaphone.fm/adchoices

Do you want to know the number one secret to success according to the average millionaire? It's not an inheritance. It's not a very high salary. It's investing. And if you have zero debt and consistent income and you're making good choices, sky is the limit. 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 talking all about millionaires. We're going to chat about some of my favorite stories for millionaires making regular salaries of $60,000 or less. Then I'll talk through some difficulties that come with making more money and how to navigate them. But first, I want to dig into what money habits today's millionaires are practicing.

Take a listen. You know, one of my favorite things about my childhood were all of the movies that were on TV. Okay, if you remember the movie, blank check, I was obsessed. So if you're a fellow 90s kid, you'll get it. We were all very jealous of the main character,

Preston Waters, because he got to write $1 million on a blank check and then spent it however he won. And he bought a house that looked like a castle and it was full, you know, with like toys and games. There was a pool. He had a limousine and hired a chauffeur named Henry. He basically became a millionaire overnight and still had money left over to keep buying things on his wish list.

And I recently got to thinking how a million dollars in today's world doesn't get you a castle and a limousine. So thanks to inflation. and the housing market and health care costs and just, you name it, it costs a lot more to live in 2024. And being a millionaire used to seem impossible for the average person or like when I was a kid, right, a millionaire. But now we know that's not necessarily true that it's impossible.

So before we take a closer look at today's real-life millionaires, let's just talk about the money habits that got them there. And I would say, just be prepared to be surprised. Because if you stick around to the end, you're going to see what majority of millionaires admit is their number one secret to building wealth. So first and foremost, let's talk about what a millionaire actually is because it doesn't always mean that you have a million dollars just sitting in your account all the time. So we always talk about net worth millionaires. So net worth millionaires is what you own minus what you owe

equals over a million dollars. So again, that could be actually an assets like a house, for instance. And a few years ago, Remsey Solutions did a national study of millionaires where we surveyed over 10,000 millionaires. And you guys, the results were just fascinating. Because like I said, when I was a kid, you assume a millionaire, you know, we're just blowing all this money on clothes and shoes and cars and vacations. But according to this research, the average millionaire is actually living a pretty modest lifestyle when it comes to their financial choices. And the more you think about it, the more it actually makes sense, because money makes you more of what you already are. And it's not necessarily the dollar amount that puts you in a solid financial position, but it's the habits that you build over time and the consistency of those habits.

So let's take a closer look at today's real-life millionaires, and let's talk about the money habits that got them there. So here at Ramsey Solutions, we always talk about the seven baby steps. And that's your starter emergency fund of $1,000, getting out of debt, bumping that starter emergency fund up to three to six months of expenses, funding retirement, funding kids college, paying the house off early, and being completely debt for, and just keep investing in building wealth and being generous. So this is kind of the plan that we talk to people about because it really gets them in this position of control with their money, getting out of debt and building wealth.

Now, on average, the first three baby steps are completed anywhere from a few months to maybe a few years depending on the factor of debt that you have or the amount of income that you have coming in. But once you reach baby step four and you start investing 15% of your income into retirement, that's a habit that you can gradually improve on over time. while you're also tackling other money goals, like, again, paying out the house or saving for kids

college. And we've found the majority of millionaires reach millionaire status slowly over time. And on the flip side, when you look at people who come into money overnight, it's almost never sustainable. And this is the reason why so many people who end up winning the lottery, they end up filing for bankruptcy or even famous athletes that get like a huge bonus. They sometimes go broke over the next couple of years because some people don't always know how to manage the amount of money that they're given. And those foundational habits have to be in place when it comes to building wealth and to be successful and responsible. Again, doesn't mean that you're overdoing it, but it's this idea that you're experiencing small wins and you create those good

habits. So let's look at what an everyday millionaire actually looks like and what they're spending their money on. So let's look at the cars they drive. So here are the top 10 car brands that millionaires are driving. You ready? Toyota, Honda, Ford, Lexus, Subaru, BMW, Accura, Hyundai, Lincoln, and Buick. Okay, so again, you sometimes think, like, oh, it's like Lamborghinis and all this stuff, but you actually see, no, they're actually very reasonable cars. Now, listen, it's okay to go and splurge on a nice car. When you actually have the money to do it, I am all about it.

My husband, Winston and I, we have a minivan in our garage. He has a pickup truck, you know, so there are things that we've done that we're like, okay, we're going to make that decision on the minivan instead of getting the nice SUV, especially when our kids are little and they're going to destroy it, and it's going to be disgusting. So again, you're making these decisions when you're looking at the practicality of your life, not just the status. But if that carlifts surprises you, then you might be blown away the top five careers that produce the most millionaires.

Engineer, accountant, manager, attorney, and teacher. And I know we all know that teachers are superheroes, but the fact that there are on the top five list of millionaires is absolutely amazing. And again, I'm not saying teachers don't deserve to make more money because I'm all in support of that, give them all the money because they're just amazing. But what I'm saying is that the habits that are created with people of that career actually help them when it comes to their money. It's amazing. And if you have zero debt and consistent income and you're making good choices, sky is the limit when it comes to what you can achieve. But do you want to know the number one secret to

to success, according to the average millionaire. It's not an inheritance. It's not a very high salary. It's investing. Yes. So according to people who are walking the walk, investing in the stock market early and as often as you can, gradually allows you to increase your net worth because you're naturally increasing contributions over time. Again, and three out of four millionaires say this is one of the biggest reasons that they are successful when it comes to money. So if you combine, you know, with paying off a house, if you combine investing, then you are well on your way to be a millionaire

when it comes to your net worth. And my friend George Camel, he did this in 10 years, you guys. Again, with the right tools and steady set of habits, he's doing it. And while you're at it, go to everddollar.com and start your first budget, because this is one of the best ways for you to keep track of your spending and sticking to a monthly budget. So you can get started today for free.

Right, you guys, so we're kind of busting the old bubble, which I think has been popped for a long time for a lot of us that a millionaire doesn't mean living in castles and riding around in a limo. But it really is being in control of your money and having this level of security that's a beautiful, beautiful thing. A 2023 Yahoo Finance Survey found

that nearly 68% of Americans earn $60,000 a year or less. So this just proves that despite what social media is telling you, the average person is not making six or seven-figure salaries on average. So today, I thought it would be encouraging, it may be a little fascinating, to take a look at some of my favorite millionaire stories from The Ramsey Show that proved to you that you can win with money making an average salary. So if you haven't heard of The Ramsey Show, historically, it was the Dave Ramsey Show. And that's where my dad would host a radio show every day, five days a week, all over the country. And then it's shifted a few years ago to the Ramsey Show. There's other hosts, including myself.

I love this platform because we get to hear from real people. They're real success stories, the success stories as well as the struggles. And so if you want to hear these calls and hopefully maybe encourage you when it comes to your financial success, make sure to check out the Ramsey Show. And if you've never watched a clip of a debt-free scream, which is probably the best, it's where people tell their stories about getting out of debt and they get to scream at the end of the call that they are debt-free. If you haven't heard that, I promise you will want to.

So when people call in to the Ramsey Show every week, again, it usually has to do with their money or they need guidance in a certain area of their life. But sometimes we hear from people who have just been implementing these financial principles and they're able to share all of what they've learned, which is just amazing. And so a few years ago, while we're in the middle of doing our national study of millionaire survey, our research project, where we surveyed more than 10,000 millionaires, Dave took a call from a guy named Dale, and he had a net worth of almost $3 million, and you're never going to believe how he got there.

So here's Dale's a breakdown. He's 69 years old living in Orlando. He has $1.6 million in retirement investments. He has $450,000 in real estate, $260,000 in annuities, a $250,000 settlement from an accident, $160,000 in cash. So all in all, Dale has around a $3 million net worth. But those numbers were not the wildest part, you guys, because my favorite part of the story is that he did all of that by making no more than $48,000 a year.

Yeah, you guys, I mean, that's the highest salary that he ever earned when he was in the military. It was right under $50,000. And he's married, but his wife never worked outside the home or added to their household income. So again, it's amazing when you stay the course and you see the progress like that. Another one of my favorite stories was David the plumber. So David was 70 years old. And again, as you hear these ages, you guys, these are men that have done this, men and women, that have done this over periods of time, right?

so you're hearing the success over years and decades of doing this. So in his case, he's 70 years old in San Antonio, Texas, and has a $1.8 million in retirement through mutual funds. He also owns his home and says that he got there by investing a little bit every single month. Now, this call was several years ago, and today, the average starting salary for a plumber is around $60,000, which is where his average was. and he worked hard and enjoyed his time, but he was really good at what he did, and he was constantly investing, again, in mutual funds over his lifetime, and ended up being in an amazing spot where he was able to retire. So you don't have to make yourself miserable by climbing the professional ladder in a job that you absolutely hate to earn a great income, you guys, and to be able to invest for

the future. So again, it's this hustling of feeling like, oh, gosh, I have to make six figures right out of college and go, go, go. There are people in all walks of life who have different stories, experiencing different parts of the world and their talents and their passions, and they're making an average mid-range salary. But they're still retiring millionaires. In fact, one-third of millionaires that we surveyed never made more than $100,000. And the fact that teachers are constantly in the top five careers of millionaires, it speaks volumes because teachers currently make on average $51,000 a year. So it proves again that when you are in a system of good financial choices and you're making great habits, that is more powerful than having a surplus of cash coming in every month.

Now, if you have a surplus of cash, that's great. If you have great habits, but creating those great habits is where you need to start. So if you stuck around to hear the number one secret to building wealth, it's really simple. Eight out of ten millionaires that we surveyed invested consistently in a 401k throughout their career. And three out of four millionaires say that regular consistent investing is what ultimately brought them success. So it almost is never this get-rich-quick scheme that brings you that financial piece. It is regular people, just like you, developing good money habits over time. And speaking of good money habits, if you've never taken Financial Peace University,

make sure to do it. This is our course that's nine weeks long, and it is so, so helpful. It teaches you the basics when it comes to money. And again, it's for real people that we talk about every single day here on this show, here on the Ramsey Show. So again, just a little encouragement, yes, is having a higher salary. great, sure, but not if you don't have great money habits and you're making the right choices when it comes to your lifestyle and your money. So you guys can do that. Okay, first of all,

let's just address the elephant in the room. The last thing high salary earners at need is to have a pity party thrown for them. And I promise you, this is not what this episode's about. But I do think it's important to talk about some of the inevitable obstacles that you all are going to face no matter what our income looks like. This is everything from lifestyle creep to investment decisions, to home ownership, and just because you get a raise or switch jobs and you start making more money, doesn't mean that all of your problems get easier or go away. In fact, I talk to people all the time who make way more money than the average American and they're still living paycheck to paycheck. So today, I'm sharing four sneaky problems that

happen to you when you start making more money. Now, if you are in a tight money season right now, let this just be a little bit of a reality check that the grass isn't always greener. If you are in a period of financial growth, let this be a reminder that it takes work to manage your money wisely. All right, first, let's start with the classic that somehow always makes its way into the family dinner chat. Taxes. And I must say, the boomers have a point, you guys. When you make more money, you genuinely do have to give up more money in taxes. Now, before we get too dramatic here, let's just remember that taxes, you know, generally are supposed to be for a, you know, good thing. They're supposed to like pave roads and pay for our children's public education,

but taxes can put people in a tough financial spot when they unexpectedly increase. So I highly recommend reaching out to a pro or using Ramsey Smart Tax to make sure that you're in good shape when it comes to your taxes. Another sneaky problem with making more money is constantly having more to maintain. So whether it's owning your first home or investing in good mutual funds or buying a car in cash, the more money you have, the more you have to keep tabs on. And it's great to finally be at a spot where you're able to level up your financial decisions and start making good habits when it comes to investing. But then that means it comes with more options, sometimes comes with more risks.

So I'm here to tell you that once you get married or have kids, it still continues. It's not just your car's maintenance that you budget for. It's your spouses as well. And then eventually your kids. more money doesn't always solve your existing problems. It just can create some new, more advanced ones. Now, keep in mind, there's a simple solution to all of this that we're going to talk about in just a second. But first, let's hear about sneaky problem number three. The third challenge when it comes to having more money is getting your finances in order for the long term. So some things you have

to think about putting into place is umbrella insurance, making sure that you're covered all of your assets as someone falls off your front step that they can't just take everything. So, some things. You have umbrella insurance, even into estate planning. You know, the more you have, the more investments, maybe the more real estate you have, you have to pay for lawyers to come in and do it properly and make sure, you know, there's things that are, you know, have to do with taxes and all the things we talked about earlier. Like, there's so much planning that goes in.

A lot of this kind of like over the top of my head, even sometimes for me, of this conversation. But it's really important to be wise because you want to be good managers of your money, whether you have a little or you have a lot. And again, if you have more to manage, there's going to be. to be more details and probably more people involved to do it wisely. The fourth sneaky problem with making more money is that at the end of the day, money makes you more of who you already are.

So lifestyle creep is real, and old habits die hard. If you think back to what you made in your very first job and try to remember your very first salary, what your very first annual salary was. And if you've been working for a while, that number probably looks a lot less than what you're making now, and yet some of you still feel stretched financially. If you're stuck in that paycheck-to-pakecheck cycle, it doesn't matter how much is in your paycheck. Really, your money tendencies are going to be at any income level. So you have to be intentional about changing some of those bad money habits.

And again, all this may sound really simple, but addressing your behavior around money will make a much bigger difference than getting stuck on the rat wheel of just trying to make more and more money. Now, at this point, you might be thinking, well, if it's bad to be broke and it's bad to be wealthy, what am I supposed to do? But listen, the truth is, contentment and stability can be true in both situations. So let's talk about a proven plan that I mentioned earlier. And simply put, it means paying off debt, saving and investing. So if you've not been intentional when it comes to your money, check out the Ramsey Baby Steps. This is everything from saving up for an emergency fund to getting out of debt to investing to retirement,

planning for your kids college, paying off the house. But it walks you through a set of principles that over time eventually will end up changing your habits because of the choices that you have to make. And your behavior change in this is one of the greatest things that you can do. And once you start implementing these principles and you start budgeting and keeping track of your progress month to month on where your paycheck goes, you're going to be golden. And if you haven't been budgeting, make sure to check out every dollar. You can go to every dollar.com and create your first budgets.

Because you got to start somewhere, you guys. And taking control of your salary, taking control of your income is one of the best things that you can do when it comes to both. building wealth. All right, so as you can see, making more money doesn't always solve all of your problems. Remember you guys, your behaviors are key and contentment is priceless. Well, thanks so much for listening to this episode. And if you love this show, make sure to leave a review so we can hear your feedback. It helps us out so much. And while you're at it, subscribe to the podcast. Share it with your friends and family who all want to be millionaires, you know? Just spread the love.

Well, thanks again, you guys, for listening. And remember to take control of your money and create a life you love.