Personal finance expert Dave Ramsey says rich people make decisions with long-term thinking, while poor people often act on emotions and short-term concerns.
Discussing the mindset of wealthy people and the importance of good decision-making on "The Ramsey Show," he said that consistently making wise choices eventually leads to wealth. Ramsey believes wealthy people look at how their purchases, actions or decisions will shape their lives five, 10 or 15 years down the road.
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‘On Track to be Broke'
Ramsey highlighted the results of a study conducted by Ramsey Solutions and his former team member and personal finance author, Chris Hogan, that examined how ordinary individuals managed to build significant wealth over time.
"People who have wealth, keep wealth, and build wealth have a long-term planning window," Ramsey said. "People who are broke live, ‘Woohoo, thank God it’s Friday!' If you have a short planning window, you are on track to be broke. If you have a long-term planning window, you’re starting to think like rich people, and if you think and act like rich people, you get to become rich people."
Ramsey pointed to the mindset gap between the wealthy and the poor, saying rich people have wills in place and start planning for their children's college as soon as they are born.
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"Poor people have fights when they die over nothing because they don’t have anything, but everybody still fighting like a bunch of hillbillies," Ramsey said. "You know, we’re just gonna have a big redneck fight here, mama died, and we’re gonna fight over her three things that she had on the windowsill, because there’s no will."
‘You Can't Live Your Life That Way'
Ramsey said rich people think decades ahead while poor people think in "10-minute blocks" of time. He urged his listeners to conduct a quick assessment of key areas like their credit reports and insurance to see whether their long-term thinking is "dialed in."
"If your whole life is a ‘oh God, it’s Monday,' that’s going to make you poor. You can’t live your life that way. The way to break that is to start looking out longer-term with all your decision-making."
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