What Is The Most Important Part Of Investing Successfully?

[Music] today's question is from gwyndolin in connecticut i'm 21 i've got three thousand dollars in debt which will be paid off by august 1. i came upon your youtube channel i heard you talking about the ben and arthur story where did ben invest the money in a bank or in the stock market does it matter whether i put a lump sum or a little in each month as long as there's two thousand dollars at the end of the month how do i keep the money in the account and should i pay off debt first and can i start saving and paying off that simultaneously a lot going on here gwendolyn well i'm glad you found us on uh youtube so here's the thing the ben and arthur story is not a a story or an actual game plan it is mathematics to show you the importance of compound interest that's all it is it shows you the power of compound interest it shows you how important it is to get started early which is a motivated use because you're wanting to get started early so that's perfect now then that's how that works now what you do want to follow in order to have the results that ben an author had meaning get compound interest working on your best favor your most powerful wealth building tool is your income until you have 10 million dollars and then your most powerful wealth building tool is your wealth it'll start making you more money than you make you but until you've got five to ten million dollars you are the magic sauce kiddo your income is the deal now the problem is in america most people have given their income away to buy crap that they can't afford that they didn't even really want to impress people they don't even really like and so we have a whole bunch of instagram freaks out here running around deeply in debt impressing people that they'll never meet at a stoplight with a car that they can't afford it's one big freaking selfie it's what the whole thing is it's all about presentation and not about fact and actual who we are we lost our soul in the process so the secret gwendolyn is you don't give a crap what other people think that starts it right there because that changes what you wear the purse you carry the trips you go on it changes the car you drive for most people it might change the house you live in it might change the apartment you live in while you're waiting to save up money to buy a house because if all you care about is i'm gonna live like no one else so that later i can live and give like no one else it sets you up in a whole different mindset because see if you don't have any payments and you've got control of your income now you've got money to invest and now you've got money to be generous with and one hundred percent of the people that are generous and invest systematically over a given period of time become wealthy it happens every stinking time but most people aren't generous and most people don't invest systematically over a long period of time because they give all their money to the bank in the form of payments buying crap that they can't afford so we work a thing called the baby steps it's a proven plan it's gotten millions and millions of people out of debt and for that matter probably made several million millionaires we call them baby step millionaires because they work the baby steps and so the first thing you do is get a thousand dollars the second thing you do is you pay off all your debts listing them smallest to largest everything but your house if you've got a house listing the smallest largest paying minimum payments on everything but the little one get rid of everything now you don't have any payments that's a good place to be that's an unusual place to be that puts you in about the top 10 percent of americans right there alone because most people have sallie mae in their spare bedroom most people have a car fleece they've got a payment on the bass boat because they needed a bigger motor those bass were out running them most people buy crap all the time on payments you're going to stop that and you're going to get out of debt once you're debt-free everything but the house and by the way if you do this with great intensity no eating out during this short period of time no vacations during this short period of time so that you can vacation and eat out anywhere you want later you live like no one else so that later you can live and give like no one else then you get to move on to baby step three because you got no payments now you're gonna build a fully funded emergency fund a rainy day fund you know why because it's gonna rain dave you need to be positive i'm positive it's gonna rain you need to be ready it's coming life is going to happen and you need ten fifteen twenty thousand dollars three to six months of expenses sitting there to catch the crap when it comes at your front door and doesn't turn into new debt the transmission's gonna go out your aunt's gonna die and you gotta fly to seattle i don't know what it is something's going to come up and you're going to need some money suddenly that's what an emergency is it's an unexpected event three to six months of expenses now you're at 20 000 or so cash in the bank and you don't have a payment in the world except your house payment how does that feel everybody say great great highly unusual at that point you would be officially weird just having gotten through those three steps then you do baby step four start saving 15 of your income into your retirement accounts roth iras 401ks with matches all in good growth stock mutual funds that have great rates of return and in an average of 15.4 years you will be a baby steps millionaire meanwhile you're saving for your kids college and baby step five and six is you're paying off your house the average person following this plan pays off their house in 10.2 years oh these are actual numbers now you can e listen if you want to get rich quick you got to go somewhere else i can't help you with get rich quick because get rich quick is not reliable there's no shortcut to any places worth going no discipline seems pleasant at the time but it yields a harvest of righteousness discipline sorry maturity sorry see it's so easy to stand out in a world full of people that don't have any of that all you gotta do is just decide you get to decide i'm gonna do this and you just decide no one can tell you what to do nobody can make you do it i can't make you do it you know all this crap dave ramsey said i can't dave ramsey didn't tell you you're gonna do anything you gotta do whatever you wanna do i'm just showing you a path and if you decide to follow that path it is the shortest distance between where you are and some wealth is wealth everything good lord no i'd rather have relationships and health but why not go get both they're both within your grasp doesn't cost any extra to play the game right matter of fact it costs considerably less that is the baby steps and then once you're completely out of that house and everything you will become very very wealthy throughout your life and you'll be in a position to look over and go hey there's a single mom hurting i can buy her a 3 000 car and it's like most people buying a biscuit because if you got three or four million dollars and you write a thousand dollar check you don't feel it if you have three thousand dollars and you run a three thousand dollar check you really feel it see this is what wealth does it gives you margins and options the ability to help other people the ability to change your family tree that's what this is all about so gwyndolin the answer to your question is you follow the baby steps and it's your shortest distance to get to be ben and arthur

Channel: Ramsey Everyday Millionaires

Views: 147,359

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Id: uYYZdJ5Uz9o

Length: 7min 39sec (459 seconds)

Published: Wed Jul 28 2021