Yahoo Finance Dave Ramsey Claims Anyone Can Be A Millionaire Even Making Just $77,000 A Year And Never Getting A Raise — Insists 'It's Really That Simple'
On June 14, financial guru Dave Ramsey posted on TikTok, asserting that anyone can become a millionaire.
Ramsey noted that the average household income in the United States is $77,000. He explained that investing 15% of that income in good stock mutual funds at a 10% return from age 30 to 65 could yield $3.6 million. His caption stated, "It's really that simple but it's not easy. If it was easy, everyone would be millionaires."
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In the video, Ramsey reiterated this calculation, emphasizing that even if one is "half wrong," they would still be in a good financial position. He added, "By the way, let's look at the assumption on this. This person makes an average household income and for 35 years they did not get a raise."
The comments on the post were mixed. One user expressed skepticism, saying, "After taxes and expenses, good luck saving 15%." Another questioned, "Save 15% before or after tax? That matters."
In the comments, users clarified that saving before taxes through a tax-advantaged account like a 401(k) means the 15% isn't taxed immediately. However, some argued that taxes would eventually be paid and could be higher, especially if left in an estate. A commenter noted that if children inherit an IRA, it might be taxed at 32% to 40%.
Another user shared their personal experience, stating, "I save 20% after taxes on a $37,000 income. I'm 25. I'll be a millionaire by 55 staying with this, and I don't even feel that frugal. I still spend $500 a month on wants. A simple life is key."
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However, considering the average household income of $77,000, it is essential to look at typical expenses. According to Zillow, the median rent in the U.S. is approximately $2,125 per month, which amounts to $25,500 annually. Additionally, the average car payment is about $563 per month, totaling $6,756 annually. These two expenses alone account for $32,256 per year, not including other essential costs like utilities, groceries, health care and education.
Given these expenses, saving 15% of the average household income, about $11,550 annually, can be challenging for many families. The feasibility of this plan depends significantly on individual circumstances, including existing debts, cost of living in different areas, and personal financial management skills.
Consulting a financial advisor can be a crucial step in maximizing your investments and ensuring you're on the path to becoming a millionaire.
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This article Dave Ramsey Claims Anyone Can Be A Millionaire Even Making Just $77,000 A Year And Never Getting A Raise — Insists 'It's Really That Simple' originally appeared on Benzinga.com
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