More Than Enough By Dave Ramsey Book Review Part 2
Every Sunday here at Ask Mr. Credit Card we review a personal finance book. This week we continue our review of “More Than Enough” by Dave Ramsey.
If you missed the first part of the review, you can read it here:
Chapter 3: Victory Through Vision
When you are a child, vision is like a dream complete with unclear plots and fog. You think, I want to be an astronaut when I grow up, even though you hate to fly. Or, I really have to have a pony, even though you live in the middle of a large city. Or, I will get an A on my math test, even though you haven’t studied.
For a child, vision is a kind of magical thinking about things that might happen in the future if only, somehow, everything goes just right.
Many adults think about their dreams and visions in just the same way as children do: If I’m lucky, if only somehow, everything goes right….
When you have walked with thoe who have real vision however, you understand it simply means sight, very clear sight.
When asked if she knew anything worse than being blind, Hellen Keller once said, “Yes, being able to see and having no vision.”
The ability to see doesn’t mean having 20/20 vision; it means being able to have a clear picture of your vision and how you plan to achieve it.
What is your vision for your own life? Have you taken the time to plan it out? Are you stuck in the rut of survival, living one day to the next hoping that tomorrow will be better? What are you going to do about it?
My vision led me to freelance. I worked hard for two years before I was able to quit my “day job”, but every step of the way, I planned, and I analyzed, and I put all my energy behind that goal.
Because of that vision and determination in my own life, I built a portfolio of work in two years that many people do not have in five years. Anything is possible in your life too! All you have to do is have a clear vision of where you want to go, and set a real plan into motion for yourself.
Dollars and Vision:
Why do you need vision? To start with, it affects income. Studies of people who earn $100,000 a year or more and have maintained that income level for years revealed an interesting character trait. These six-figure earners all think in five year blocks (or more) of time.
They are very unconcerned about today except for how today is a building block toward their vision, which may not be fully realized for another twenty years.
They think long term in all decisions.
Six figure earners think about the long term implications of every move they make and don’t make those moves unless they move them one step closer to their vision.
These are happy people not because they have six figures to spend (although that doesn’t hurt) but because temporary pain is just that: It is temporary.
If you think long term you become a saver and an investor. As an investor with a long term vision you don’t panic when the mutual fund drops because you are looking at what the market has done over ten years and not what today brings.
How many of us allow our inner child to control our decisions? And by inner child I mean exactly what Ramsey detailed in the quote above: The part of us that magically wants things to happen, without the work, or the sacrifice, or the goal?
Signs that inner child is at work include: regularly carrying a balance on your credit cards, living paycheck to paycheck, having no retirement accounts or heath insurance, not putting money into an employer-sponsored 401(k), not having a budget….not having a plan.
The folks at the bottom end of the income brackets who stay there tend to share the character trait of short-term thinking, making decisions based on short-term results.
That sounds harsh doesn’t it? Well if you think short term you rent to own your VCR and get ripped off. You pawn items or fall for these jerk cash advance businesses that cash hot checks.
If you think short term you work for the weekend and fall prey to pleasure-based products that in the end steal your pleasure.
If you think short term you don’t save and invest so you can’t build wealth. When you think short term, if you do invest you can’t leave money alone so you end up ing high, selling low, then thinking:”I have the worst luck.”
Luck had nothing to do with it. You simply shortchanged yourself by not carrying through on your vision.
Well I can tell you, these paragraphs alone are making me re-think my financial picture. If anything, I always tended to have a short term approach to my life, thinking no more than about two years in advance.
Given the choice, I much prefer to be in the wealthier group with the long-term goals.
I also agree that luck has very little to do with success or failure. Hard work, vision, and drive are a much better recipe for success.
What about you? What do you feel driven to do? To change about your life? My homework tonight will be working out at least a five year plan instead of a two year plan.
I also want to share with you what I consider to be a few of the very best paragraphs out of this entire book:
Making your vision a reality takes time. It takes the time to calculate how your money could be the power behind your vision. Consider this: You are a teenager who puts $2000 into a Roth IRA on your sixteenth and seventeenth birthdays.
If those two ROTH IRA’s where invested in a growth stock mutual fund that averages 12 percent annual growth, that $4,000 will grow to $1,566,333 tax free at age sixty-six. You realize that you never added any money?!
Vision leads you to wealth. Vision is understanding that investing cable and pizza money of only $100 per month from age twenty to age sixty-five, your working lifetime, will land you at retirement with $2,145,469. That is better than having to that cookbook 72 Ways To Prepare Alpo And Love It.
We have a retirement crisis in America today not from lack of money, but from a lack of vision.
Wow! I really think Ramsey hit the nail on the head with this one!
It is never too late to start investing for your retirement. You might be twenty, you might be fifty, but you are always going to be better off tomorrow if you invest today.
To quote Warren Buffet here:
“The best time to invest in the stock market was yesterday. The second-best time is today.”
What are your current investment options? Do you have IRA accounts set up yet? Are you contributing to a 401(k)?
What will you do with the time you have left between now and retirement? Will you take advantage of your vision and put it into action? Or will you float along, and hope that everything will turn out alright?
Vision Changes Your Family Tree:
If a sixteen year old can retire an millionaire, and a working class saver with $100 a month can retire a millionaire, what could you do? You could change your family tree!
Tens of millions of dollars can be created as wealth for the next generations.
What did the first Carnegie, Rockefeller, Vanderbilt, or Kennedy have when he started broke? Vision.
Vision causes you to face your horizons without stopping no matter how many times you fall.
Vision that is powerful enough to change a family tree is the noblest of trait.
Several years ago, an older lady with a thick German accent called in on my radio show. She wanted to tell our listeners that saving and investing, instead of spending everything, works.
She had come to America just following World War II as a widow with two young children. Can you imagine how popular Germans were in America just after the war? She didn’t care, she had a vision.
She came here with virtually no skills and worked over forty years as a seamstress. She also knew that she had to invest to achieve her vision.
At the time she called me she was retiring, and on a seamstress’s income she had paid for her home and had over $300,000 in mutual funds. Impressive? She also paid cash for both her children’s college educations and gave them each enough to pay cash for their homes.
I had to ask how she had sacrificed all that she obviously had, to achieve the goals she had. Her answer will stay with me forever: “Dave, when I came to America, I had one goal – give my children a chance. I wanted to change my family’s destiny.“
As a parent, I believe that there is no greater goal than to give your children the best life possible. I have a working vision for the life of myself and my daughter – with one more important key that Ramsey doesn’t touch on: I want my daughter to know how to do the same thing too.
That’s the second half of the equation: Not simply providing for your children by building wealth, but teaching them how to do the very same thing. Only then will I know that what I do for her will stick – when she is able to do it for herself a long time before I am gone.
That concludes this week’s review of “More Than Enough” by Dave Ramsey. If you want to read our future reviews you can grab our Free RSS feed so that you don’t miss them.
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