Number One Indicator Of People Who Retire Wealthy - Dave Ramsey Rant

earlier in the week I talked about a study that was done by the administrators and retirement plan professionals translation financial nerds did the research and they did research to figure out what the number one indicator of people having money in their 401k is is it the rate of return of their investment is it the expenses of their investment is that the Commission's paid to their broker that keeps them from building wealth is it the fact that they were so smart that they di why'd everything and did it with I'm saying that sarcastically and did it all with no loads because they read money magazine and don't have a brain is it all of these you know false things that float around about investing now I got to tell you if you had asked me with the number one indicator of people building wealth in their 401k I would have said rate of return how much how much return does the investment yield when you're investing in a single stock whether you're investing in mutual funds whether you're investing in you know your because the difference in compound interest on a on a money market account averaging two percent for the last two decades versus a good mutual fund averaging twelve percent for the last several decades the difference in the compound interest on that is astronomical I mean I know the math the curve on that the exponential progression it's called it just blows your mind there's a math person what the difference is so I would have said the rate of return because the difference in the rate of return at eight percent versus twelve percent you'd think that's like 1/4 more it's not it's like double triple more and so it's crazy how much rate of return matters mathematically so had you asked me what the number one indicator of someone retiring with wealth in their 401k and IRA I would have said rate of return and I would have been wrong you know what the number one indicator of people that I brought this up earlier in the week you know the number one indicator of people retiring wealthiest 74% of the indication savings rate translation putting money into the account because all this discussion about mathematics doesn't matter if you don't put any freaking money into your retirement account you become you just become one of these math nerds where you sit around do analysis and discuss the philosophy of the philosophies of the financial planning world whether we do fee-based or is in now there's a conflict of interest when there's a commission and all is bunch off all right ibed up malarkey it's just baloney and everybody gets all the fiduciary responsibilities that's just horse crap when it comes down to it this detailed piece of research revealed something that I I know it and it's a common-sense thing and you kind of when you see it then you go duh but I wouldn't have guessed it to be the primary indicator by such a wide margin 74% of the reason people retire with dignity is cuz they save money they invest money the money that you put in the steadiness and the consistency and the amount of money you put into the account is what causes it so in other words people that put in 1% of their income versus people that put in for 11% of their income it's more than 11 times that they get out of that if they do it 11 versus 1 a lot more because that's what gets the compound interest no ball rolling and I'm just going free Kitab vyas but you know what financial nerds and I'm I got to admit I'm a bit of a financial I'm a lot of a financial nerd I'm a recovering financial nerd that's what I am trying to use wisdom and common sense in the midst of an academically paralyzed industry math math nerds on steroids I mean paralysis of the analysis beyond belief is the financial world because we all sit in class with our little present value calculators and and just you know go bananas with our brain work instead of just going you know what the number one key to helping people if I'm gonna help you in other words get rich for retirement the best thing I can do is get you to save money if I can get you to save money it's the number one indicator that you're gonna retire with dignity because your savings rate if I can get you to do your Roth IRAs get you to do your 401k get you out of debt so that you can do that get your emergency fund in place so you don't go and cash the stupid thing out once it's going because you have an emergency and didn't have an emergency fund keep you from borrowing against your 401k keep you from cashing them out to pay off debt keep you investing in investing and investing and investing and investing and investing and investing and investing investing if I can do that for you as your teacher as one of the people who influences how you think about money I've touched the number one thing that causes you I mean I could teach you about the details of mutual funds and expense ratios I can teach you about how to look at rates of return and track record I can teach you about no load versus load I can teach you about 12 b1 fees we can get out of prospectus and put everybody to sleep and read through a mutual fund prospectus and you drive off the road falling asleep I can do all of that and none of that causes you to build wealth the number one thing 74 percent of the reason that people win with money in their investments is they actually put money into the investment and so $100 a month invested at 12% from age 25 to age 65 is on average going to come out at 12% one million one hundred and seventy six thousand dollars so I said that the other day on the air lady tweeted this morning fabulous tweet she says so I was trying to explain this to a friend of mine and he says yeah but a million dollars isn't gonna be worth that much in 30 years forty years it's a 40 year example now this is the dumbest response that you could possibly give to someone who's telling you now listen to that listen to this someone's telling you $100 a month invested from age 25 to age 65 is one million one hundred seventy six thousand dollars and the idiots response is but a million dollars isn't gonna be worth that much in 40 years let me tell you what it's worth more than you're going to have because you're such a that you look at that example and you go well million dollars is gonna be worth anything so what am I gonna do nothing and when you do nothing with your investing you know what you have nothing because you know what the number one indicator if you having money and well that retirement is that you put some freaking money in the account instead you go well it's not gonna be worth anything and you sit around me welcome what kind of moronic responses that loser responds of course a million dollars in 40 years is not worth what a million dollars is now inflation will eat the value of it but it's gonna be worth a whole heck of a lot more then you're gonna have because you put nothing in because you said a million dollars in worth anything so your example doesn't matter so I'm not putting any I don't want a million dollars because a million dollars didn't cool well no you might need 10 million I'm good with that but you're not gonna have it with that attitude golly it's scary how stupid people are man it's scary it's like here's how you have a million dollars yeah but a million dollars in you owe me that much mean or is it that much now by the way let me help you with that million dollars isn't that much not gonna be that much in 40 years it's gotta be more than you have you that's the answer but you know employed company I can say it on the radio but you're not gonna look at somebody and go you know you're just too stupid to talk to your parents or cousins oh my gosh you know I mean you just really don't do that imply company you don't just sit and look at your friend who's an idiot and call them that unless you're like best friends and then it probably still doesn't work out so but I mean what a moronic statement I'm not gonna save money because there's inflation maybe that's the actual reason you should be saving money because there's inflation because let me help you with this inflation ain't gonna help your social insecurity check because it's not keeping up with inflation yeah try making a great life for yourself on 900 bucks a month and see how that works for you if you order in that cookbook 72 ways to prepare Alpo and love it so don't make moronic statements when people are teaching you about wealth like it's not good enough it's just it's dumber than a grubworm in a box of rocks man I'll tell you what [Music] you [Music]

Channel: The Ramsey Show - Highlights

Views: 1,327,240

Rating: 4.8386989 out of 5

Keywords: dave ramsey number one indicator, dave ramsey number one, number one indicator of people who retire wealthy, dave ramsey retire wealthy, retire wealthy, retire early retire rich, retire rich, dave ramsey retire early, how to retire, dave ramsey early retirement, dave ramsey retirement planning, dave ramsey wealth, dave ramsey retirement, dave ramsey on retirement

Id: Y0cibIa1N38

Length: 9min 41sec (581 seconds)

Published: Thu Feb 26 2015