Dave Ramsey Says Your Income Can’t Build Wealth If You’re Sending It To Car Loans And Credit Cards. ‘It’s Almost Impossible Mathematically’
- Personal Finance
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- 6 minutes read
Personal finance expert Dave Ramsey has spent decades helping people get out of debt and take control of their money.
However, in a recent conversation on “Office Hours With Arthur Brooks” podcast with Harvard professor Dr. Arthur Brooks, Ramsey said that many Americans will never build wealth—not because they don’t earn enough, but because they’re sending too much of their income to car loans and credit card payments.
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Debt Keeps You Trapped
“Your most powerful wealth-building tool in your retirement or in your kids’ college fund is your income,” Ramsey told Brooks. “And when you give it away to Ford Motor Company and Citibank in the form of payments, you cannot invest steadily. It’s almost impossible mathematically.”
“No one on [“The Ramsey Show”] when they call in defends credit card debt,” he told Brooks. “they always just tuck their tail, drop their head and are ashamed. No one is happy or thinks that this is wise.”
On the other hand, he said that many people justify new cars as essential purchases. “They’ll defend a car payment, ‘Oh, I had to have a car,’” Ramsey said.
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Debt Steals Freedom, Not Just Money
Ramsey spoke from personal experience. At 26, he had a $1 million net worth, multiple properties, and was earning $200,000 a year. Then the bank called his loans. Within two years, he was bankrupt.
“I built a house of cards and was shocked when it fell,” he said.
The turning point came when he discovered biblical principles about money: living on less than you make, staying out of debt, budgeting, and giving generously. “We immediately started feeling different about it,” Ramsey told Brooks during their interview. “Our emotions started moving. Our spirits started calming down. Because we had been living in terror. The water was cut off, the lights were cut off.”
Focus On The Long Game
Ramsey believes many people make bad decisions because they’re only thinking short term. “The wealthy think how’s this going to affect me long term; 10-, 20-, 30-years out,” he said. “The poor person thinks, and poor is a state of mind, not a number; they think, ‘How’s this going to affect me Friday?’”
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And when it comes to purchases, many Americans are now being pushed into overspending thanks to aggressive financing. “I was buying a t-shirt online the other day for $12, and they offered payments,” Ramsey said. “That’s how stupid it has gotten.”
A Smarter Way Forward
Ramsey’s core message? Budget intentionally, eliminate debt, and think long-term. If you’re trying to build wealth while making $1,000 car payments and carrying a credit card balance, “you’re behind the eight ball from the very beginning.”
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