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Chapter 1: What is the purpose of the Baby Steps Millionaires theme hour?
Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studios, it's The Ramsey Show, where we help people build wealth. Do work that they love and create actual amazing relationships. Jay Warshaw, Ramsey Personality, is my co-host today, and you are listening to a Baby Steps Millionaires Theme Hour. A lot going on in that title.
We're going to be taking calls from people who have a net worth of $1 million or greater only. You are welcome to call if that is you. The phone number is 888-825-5225. You are calling because we want to interview you and learn a little bit about your wealth, how it got there, where it came from, and where real millionaires come from.
There's a lot of mythology out there about where wealth comes from. It's all inherited.
Chapter 2: What myths about wealth and millionaires are debunked?
You have to be a rock star, a country music star, a sports figure in order to be a millionaire. Only crooks become millionaires. All wealthy people are crooked. They stole their money. All these other absurd mythology items that are running around the culture that people believe, and the problem when you believe them is it makes you think it's not for you.
And the purpose of this show is to show you the truth. Where do millionaires really come from? By talking to real millionaires. I don't want to talk to your broke brother-in-law. I know he has an opinion and he votes wrong. We don't even need to ask him. Okay. I want to talk to real millionaires, people who've really done it. A millionaire is by definition a net worth of $1 million or greater.
Your net worth is an accounting figure. It is not a feeling. It is not a moral construct. Your net worth is what you own minus what you owe equals net worth.
Not a salary.
It's not a salary.
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Chapter 3: How is net worth defined and calculated?
It's not an income. It's definitely not your freaking FICO score. And so it's really just your assets minus your liabilities, the net of those two things, the net worth of those two things. When it is greater than $1 million, you are by definition a millionaire. Well, $1 million isn't enough. This is not a discussion of that. This is a discussion of do you have a million-dollar net worth?
Mm-hmm.
Well, it's not a real million-dollar net worth unless it's all in cash. No, you're wrong. That is not the definition. If you want to define something as a cash millionaire, that's fine. But real estate counts. Any asset that can be sold and turned into money counts. That's called an asset minus any liability, any debt that you have. Net, net, net is a million dollars or greater.
You're a millionaire. Mark is in Chicago, our first millionaire. Hey, Mark, what's your net worth?
Hi, Dave.
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Chapter 4: What factors contribute to becoming a millionaire without inheritance?
Thanks for having me on. $2.9 million.
Very good. Give me a little breakdown by category. How much in each of the different things?
My retirement is about $1.6 million. Other savings outside is about $1 million. And my house is worth about $0.3 million.
$300,000 house. Okay, cool. How old are you?
65.
Good for you. And how much of this $2.9 million did you inherit?
$100,000.
Okay. At what point did you inherit $100,000? How wealthy were you when you got that?
Probably was worth a little over a million dollars at the time.
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Chapter 5: What is the importance of discipline in achieving financial goals?
Yeah. So is it a correct statement then to say you are not a millionaire because of inherited money?
That is correct.
Okay, good. So what was your range of income in your working life, your worst year and your best year working?
Averaged about $90,000 when I started after I graduated from undergrad. My starting salary was $12,600 a year. And then probably within the last couple years before I retired, maybe about $180,000.
Good for you. And what was your career? uh certified public accountant cpa good good so i assume you have an accounting degree for your degree yes what was your gpa um 3.5 okay cool good and then and then i went on after a couple years to get my master's in taxation ah very good very good are you a book reader or a tv watcher
um neither to be honest with you more reading uh obviously the tax law and the changes and so on that counts and and uh some of the trade journals okay all right so what advice would you give to the 25 year old cpa out there that's listening can they still become worth three million dollars when they're 65 if so what should they do well you need to have some goals in life and
That's what I started out. I had some goals, and then you figure out a plan to achieve those goals, and you stick with it, and you need discipline. Without the discipline, it's not going to happen.
Yeah, okay. Did you have fun in your life? I mean, did you go on vacations and enjoy nice things, or did you live in a cave and collect lint?
No, no, no, no, no. We had fun, and one of the plans that I had when I graduated was
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Chapter 6: How do millionaires view debt and financial management?
From undergrad, one of my goals was to own racehorses, which after saving for a number of years, I've been able to do, and that's still part of the fun in our life besides traveling.
How many horses do you own?
Right now, I own 50% of one standard bred.
Wow. And that horse would be valued at what?
Right now, she's probably worth about 20 grand tops.
Ah, okay. All right. So that's truly hobby stuff. Excellent.
Well, no, no, no. It's a traded business. We try to make money at it. I know. I know.
But it's not. If you told me it's a half-million-dollar horse and you owned half of it, I'd be out of 2.9 million. But, I mean, your share is $10,000. So, yeah, this is fun. It's fun is what your point is.
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Chapter 7: What advice do millionaires have for young adults starting their careers?
Yes.
Yeah. Good for you, man. I'm proud of you, hero. You went out and did it. Live the American dream, man. It can be done, Jayde.
I mean, he started making $12,000 a year. I love that. When he started his working life, that's just amazing.
Yeah.
I mean, I know it was a different time, but golly.
Yeah, it was a different time, but it's not a different time now. And he made 180. Okay. So, I mean, so how did he become wealthy? What do you say? Steady.
Slow and steady.
Slow and steady.
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Chapter 8: How do personal values influence financial success?
Discipline, personal discipline.
I got to believe he was debt averse.
Yeah. The largest study of millionaires ever done in North America, done here at Ramsey, airtight research, had outside research firms looking over our shoulder to make sure we weren't getting into some kind of confirmation bias or violating some methodologies because we're really good at research, but we wanted to be triple sure. This is airtight research.
In other words, if you don't agree with the conclusions, you're what's known as wrong. Okay? 79% of America's millionaires did not receive a dime of inheritance. That's 8 out of 10. Another 5% received a small inheritance like $5,000. Another received a substantial inheritance like Mark of $100,000 after they were already millionaires.
5 and 5 and 79 is 89% of America's millionaires are mathematically not millionaires because of inheritance 9 out of 10 times. You know what that says to the rest of you? That you can do it. And you should do it. This is the Baby Steps Millionaires theme hour on The Ramsey Show. Jade Walsh, all Ramsey personality is my co-host today. This is a Baby Steps Millionaires theme hour.
Ken is in Los Angeles. Hi, Ken. What's your net worth?
Hey, Uncle Dave. It is so awesome to be talking to you. I can't believe this is happening.
You too, sir.
Thank you. My net worth is, thank God, it is $1.5 million.
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