Dave Ramsey says this purchase can keep Americans from moving up from middle class How you can build real wealth instead

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Over the course of his long career, radio personality Dave Ramsey has noticed several indicators of Americans’ financial status.

One of these indicators, he said on an episode of The Ramsey Show, could even possibly predict whether a middle class family could manage to break out of their income bracket and become wealthy.

At least, that is what he told Micah, 24, from Washington, DC, when the military man called in during the episode looking for financial advice regarding a potential car purchase.

Micah said he earns $80,000 a year. He already owns a car worth $13,000, but is tempted to purchase a new sports car — a Nissan 370Z — for $30,000 in cash. He admitted this is purely an indulgence and that the new car would be for “play.”

However, he called Ramsey to find out if he should invest the money instead of splurging on a vehicle.

Ramsey let him in on a little secret.

Ramsey’s advice was simple: say no to the second car. As for his reasoning, the finance guru pointed to something he’s noticed over the years: “The way you know someone is going to stay middle class is when they have two very nice cars — that are obvious [sic] $500, $600, or $700 payments — sitting in front of a middle class house,” he said.

Americans borrow an average of $40,927 for new vehicles and $26,248 for used vehicles, according to data from Experian.

The Ramsey Show hosts pointed out the obvious: more vehicles means more bills.

Especially if you are trying to pay off a lot of debt already, you should try to cut down on your car expenses instead of adding a whole other car to your monthly obligations.

You can also cut down on your car insurance costs significantly by comparing rates offered by different carriers near you through OfficialCarInsurance.

Here’s how it works: enter some basic information about yourself and the vehicle you drive, and OfficialCarInsurance will show you rates offered by leading insurance providers like GEICO, Allstate, and Progressive.

You can then compare and select a policy that best suits your needs without putting a strain on your wallet.

What can you do instead to turbocharge your income beyond the bracket of middle class?

Read more: Warren Buffett says you can’t buy time — but real estate investors have found this 1 loophole. See how they’re buying back hundreds of hours a year (for absolutely free)

“If you’re going to build wealth, you have to keep as small an amount as possible going into things that go down in value,” Ramsey said. He explains, a person trying to build wealth over time should have no more than 50% of their income in depreciating assets such as cars.

So, rather than spending that money on a depreciating asset, you should consider putting that money into investment opportunities that will increase in value, diversify your portfolio and earn you passive income — all factors that can help you build wealth.

Real estate is a great option to do just that. There are many ways to get yourself in the real estate game without taking on the extra cost and responsibility of buying or managing a property yourself.

If you’re already an accredited investor, you may want to consider commercial real estate as a way to boost your income and move into the next tax bracket.

First National Realty Partners (FNRP) is a private equity firm that makes investing in commercial real estate convenient and simple by offering white-glove service to accredited investors. The team acts as the deal leader, providing expertise and doing the legwork while streamlining the process.

With a minimum investment of $50,000, investors can use their secure platform to explore available deals, engage with experts, and easily make an allocation.

FNRP has developed relationships with the nation’s largest essential-needs brands, including Kroger, Walmart and Whole Foods, and provides insights into the best properties both on and off-market.

Another way to tap into this market is by investing in shares of vacation homes or rental properties through Arrived.

Backed by world-class investors including Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties, earning a passive income stream without the extra work that comes with being a landlord of your own rental property.

To get started, simply browse through their selection of vetted properties, each picked for their potential appreciation and income generation. Once you choose a property, you can start investing with as little as $100, potentially earning quarterly dividends.

While a new car might be fun, you likely won’t get your money’s worth the longer you have it.

And real estate isn’t the only private asset that might be worth investing in over that second car. The time for retirement arrives sooner than you think, and it’s always a good idea to up your investments to add a cushion to your final years.

So how can you make your golden years more golden? There are other options for saving for retirement outside of a traditional IRA or Roth IRA. Opting for a gold IRA gives you the opportunity to hedge against market volatility by allowing you to invest directly in physical precious metals rather than stocks and bonds.

A gold IRA is one option for building up your retirement fund with an inflation-hedging asset.

Opening a gold IRA with the help of Goldco allows you to invest in gold and other precious metals in physical forms while also providing the significant tax advantages of an IRA.

With a minimum purchase of $10,000, Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver.

If you’re curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today.

You can also diversify your retirement portfolio with alternative investments that have even more cachet than a sports car.

It’s easy to see why great works of art tend to appreciate in value — especially during times of inflation. Supply is limited, and many famous pieces have already been snatched up by museums and collectors.

Investing in art was traditionally a privilege reserved for the ultra-wealthy.

Now, that’s changed with Masterworks – a platform for investing in shares of blue-chip artwork by renowned artists, including Pablo Picasso, Jean-Michel Basquiat, and Banksy. It’s easy to use, and with 23 successful exits to date, every one of them has been profitable thus far.

Simply browse their impressive $1 billion portfolio of paintings and choose how many shares you’d like to buy. Masterworks will handle all the details, making high-end art investments both accessible and effortless.

Masterworks has already sold roughly $45 million worth of art, distributing the net proceeds to everyday investors. New offerings have sold out in minutes, but you can skip their waitlist here.

See important Regulation A disclosures at Masterworks.com/cd

Let’s face it: A new car is fun right now, but living the kind of life you dream about is a thrill that lasts.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.