Dave Ramsey is a great resource for a fact-based strategy on creating financial stability and wealth creation. After reading his book, The Total Money Makeover: A Proven Plan For Financial Fitness, I had the following takeaways:
1. Your income is the greatest wealth building asset that you have. You have two choices when it comes to your income: (1) spend it or (2) use it to build wealth by investing. For example, the average American in their twenties has a hefty monthly car payment. If that same monthly payment was used instead to invest in a long term mutual fund, it should create over $4MM in wealth by retirement.
2. Live like no one else if you want to live like no one else. Don't let others that use credit cards for instant gratification discourage you from making fiscally responsible decisions. Don't worry about ‘keeping up with the Joneses,’ because statistics are proving that the Jones's might be broke.
3. In his book The 7 Habits of Highly Effective People, Stephen Covey tells us to “Begin with the end in mind.” When it comes to financial planning, you have to start with an understanding of where you want to be 10, 20, and 30 years from now and use that to drive your spending and investing decisions today.
Money does not create happiness, but it can be used as a resource to give you the freedom and flexibility to focus on the things that will make you happy.