Professional financial strategist Dave Ramsey has revealed that ordinary Americans can become millionaires by consistently investing in growth stocks and paying off their homes.
Between November 17, 2017, and January 31, 2018, his company, Ramsey Solutions, surveyed more than 10,000 millionaires across the country, which he said was the largest survey of its kind.
After reviewing the results, Ramsey, who also hosts a nationally broadcast financial radio show, said he identified two simple ways ordinary people can amass immense wealth.
The first key to becoming a millionaire is to routinely invest in growth-focused mutual funds.
Professional financial strategist Dave Ramsey has revealed that ordinary Americans can become millionaires by consistently investing in growth stocks and paying off their homes.
Between November 17, 2017, and January 31, 2018, his company, Ramsey Solutions, surveyed more than 10,000 millionaires nationwide, which it said was the largest survey of its kind.
In Ramsey’s survey, eight of the ten millionaires interviewed said they invested in their company’s 401(k) plan.
Among the millionaires surveyed, 75 percent said long-term investing was one of the main sources of their wealth.
In a video on The Ramsey Show, the financial guru put it bluntly: “There are two things that really get people from their first million to five million dollars in net worth.”
He continued: “The two main things are that they consistently invest in their retirement plans and good growth stock mutual funds, such as 401Ks and Roth IRAs.”
According wise moneyGrowth mutual funds have performed remarkably well in recent years.
If an individual had invested $10,000 in the Fidelity Growth Company Fund ten years ago, that initial sum of money would be worth much more than $56,000 today, representing an average compound annual growth rate of 18.8 percent.
The fund holds some of the most successful technology stocks of the past decade, including Apple and Nvidia.
A smart and prudent investor with a gainful job could have used this fund to become a millionaire, wise money he pointed.
If the Fidelity Fund were to maintain its 18.8 percent growth rate, someone earning $100,000 could set aside 10 percent of his or her salary and invest it in the fund. Over eighteen years, the investor could accumulate $1.1 million.
The second critical step an average person can take to become a millionaire is to pay off their home.
The first key to becoming a millionaire is to routinely invest in growth-focused mutual funds.
“They’re paying off their house,” Ramsey said simply.
According to Ramsey Solutions, the average millionaire paid off his or her home in just 10.2 years.
In 2022, the share of U.S. households without a mortgage soared to an all-time high: just under 40 percent, according to wise money.
Between 2012 and 2022, the mortgage-free homeownership rate increased by an impressive five percentage points.
Property ownership is an important means of acquiring wealth for the average American.
However, in recent years this step has become more difficult to achieve.
The second critical step an average person can take to become a millionaire is to pay off their home.
In 2022, housing costs for about 12 million renting households exceeded half of their income, according to wise money.
With expenses so high, it has become a challenge for the average American to save enough to make a down payment.
This difficulty has been exacerbated by rising mortgage rates. In addition, there is a shortage of housing units. According to church pewThere is a deficit of between four and seven million units.
To make their first million dollars, average Americans will probably find it easier to invest in mutual funds than to pay off their homes.