10 Genius Things Dave Ramsey Says To Do With Your Money

Dave Ramsey is one of the country’s most celebrated personal finance gurus, a famous radio host, a successful businessman and a best-selling author. He’s also a self-made man who started with nothing and built a seven-figure net worth and a $250,000 annual income by age 26.

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Now in his early 60s, he has spent many of the years between getting even richer by helping other people build wealth of their own. Here’s a look at some of the choicest wisdom and most sage advice that Dave Ramsey has doled out along the way to his legions of loyal followers.

Eliminate Debt Before You Invest

The No. 1 rule of the Ramsey investing philosophy is not to invest a dime — at least not until you eliminate all of your toxic debt, which he considers to be pretty much everything but your mortgage. Ramsey insists that you can’t build wealth when your primary wealth-building tool — your income — is tied up in monthly finance charges.

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Harness the Power of the Snowball Method

Eliminating debt is easy to talk about but hard to do, which is why Ramsey is a longtime advocate of the so-called snowball method. This debt-reduction strategy requires you to attack your debts in order of smallest to largest, allowing you to chalk up quick wins that close outstanding accounts while boosting your confidence along the way. Once it’s time to confront your truly scary debts, you’ll have momentum on your side — plus, you’ll be able to concentrate only on them now that your smaller debts are no longer nipping at your heels.

Build an Emergency Fund Before You Build Wealth

The first half of Ramsey’s top investing rule is to get out of debt. The second is to fully fund your emergency savings before you try to grow your money on the market. Eliminating debt puts you on solid financial ground; but, without enough cash in the bank to cover three to six months’ worth of expenses, you’re just one emergency away from being forced to tap into your retirement account.