Dave Ramsey is a personal finance expert, podcaster, and an author. The rules of money aren’t complicated. Make more than you spend, live below your means. So why is it still so hard to get right? What are the real keys to building wealth, and how do we stop sabotaging ourselves along the way? Expect to learn why you need to become ruthless to become successful, why Gen Z & Millennials face a uniquely different financial landscape than Boomers or Gen X did, the biggest psychological errors people make when it comes to thinking about wealth and business building, how to build a business you love, Why it’s so hard for people to change their financial behavior even when they know what to do, if Is the cost of living crisis a spending crisis or an earning crisis, and much more… Sponsors: See discounts for all the products I use and recommend: https://chriswillx.com/deals Get up to $50 off the RP Hypertrophy App at https://rpstrength.com/modernwisdom (use code MODERNWISDOM) Get 5 Free Travel Packs, Free Liquid Vitamin D, and more from AG1 at https://ag1.info/modernwisdom Get the Whoop 4.0 for free and get your first month for free at https://join.whoop.com/modernwisdom Extra Stuff: Get my free reading list of 100 books to read before you die: https://chriswillx.com/books Try my productivity energy drink Neutonic: https://neutonic.com/modernwisdom Episodes You Might Enjoy: #577 - David Goggins - This Is How To Master Your Life: https://tinyurl.com/43hv6y59 #712 - Dr Jordan Peterson - How To Destroy Your Negative Beliefs: https://tinyurl.com/2rtz7avf #700 - Dr Andrew Huberman - The Secret Tools To Hack Your Brain: https://tinyurl.com/3ccn5vkp - Get In Touch: Instagram: https://www.instagram.com/chriswillx Twitter: https://www.twitter.com/chriswillx YouTube: https://www.youtube.com/modernwisdompodcast Email: https://chriswillx.com/contact - Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: Why is it hard to make smart money decisions?
Let's talk about both of our favorite topics, Dr. John Deloney. And it's his favorite topic. It is.
Oh, man. What a star, though. I mean, he is blown up. He's brilliant. He's quick. And he's helping a lot of people. We're real proud of him.
I have no idea how I wasn't familiar with him until relatively recently. I guess the internet's a big place, right? But he's great. He came out to see me here in Austin. We immediately had that, did we just become best friends moment. And yeah, he's phenomenal. His insights are great. He seems to have... I'm going to put this. He's got kind of a Ramsey signature to him in a way.
Quite firm, I would say. Sometimes bordering on scary. Moderately intimidating, but also sort of warm and sort of feels like he's doing it. Like a particularly brash uncle that needs to give you the sort of kick in the ass that you needed.
Yeah, that loves you, but will tell you the truth. And that's what we all try to do around Ramsey and portray both of those things. A, we love you, and B, that means we have to tell you the truth for your own good because we care about you and we want you to win. And continuing to do that horrible thing to yourself is silly.
And so whatever it is, whether it's John or any of the rest of us, but John certainly has fallen into that fold, and he is brilliant. He's very articulate. I mean, I'm in the third meeting with him in our – Uh, we're, we're talking about, you know, interviewing and talking about, uh, turning him into a Ramsey personality. And he's so quick on the draw. I went, you can do this.
All we gotta do is put you on with a microphone and start answering questions. He didn't know what it was. And I'm like, look, I've done talk radio for 30 years. You, you draw fire and reholster before the bullet hits him. I mean, it's quick. And so, uh, he, he's really, really good and he does care deeply.
How do you describe what you do? Let's say that someone meets you and they're not familiar with you. You're at a cocktail party or you're at a gathering of some kind. David, tell me about what you do for work. How do you coalesce the myriad of different things that you've got going on?
You know, these days I would just tell them, you know, I'm the CEO of Ramsey Solutions, and we put on a bunch of podcasts and a bunch of curriculum and have a bunch of bestselling books and, you know, YouTube and all that stuff. And I'm one of the people that does all that as well as be the CEO. So it's kind of like that.
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Chapter 2: How do Gen Z and Millennials differ financially from older generations?
How much hope you had during that moment while you were during the real financial strife? Because in retrospect, it's very easy to weave a narrative together of this is why I needed to learn this thing. And look, in the grand arc of my life, I have come into land with much more insight and wisdom. And I can see that for what it was.
This was somebody that was too flashed, that was over leveraged, that was using debt in a way that wasn't efficient. And I paid the price and this is how I've come out of it. But in my experience, during that process, it doesn't feel like that at all. There's no grander purpose to this thing. You're just wallowing in uncertainty and fear and confusion and self-doubt and criticism and... pay.
So I just want to kind of get a sense, let's say that somebody, hopefully not bankruptcy for a million dollars, tuned up to an amount of a million dollars, but somebody's going through a bit of a rough time and you're like, look, This is a way to try and reframe that difficulty right now psychologically so that you can start to see things with a little bit more equanimity.
Now, I wonder how much you were capable of doing that at the time and how much this is you retrospectively realizing that it was good for you.
It ebbed and flowed at the time. And so I distinctly remember standing in the shower sobbing with it so hot in my face I could barely stand there because I did not know what to do. I was so scared I couldn't breathe. And I have a wife and a brand new baby and a toddler and
and the poor woman thought she married sir galahad and turns out it was goober and i stand there feeling like a complete abject failure our water and our electricity to our home with two babies got cut off i mean it was unbelievable uh so yeah it like i said it not i not only went broke it broke me but i i was so scared i couldn't breathe and then
I'd walk out in the sunshine and find some little deal, find some little thing and go live the next day, a little vitamin D, and go to church. And the pastor would be inspiring. I'd have a good moment in prayer where I felt like God was talking to me. You're going to be okay. I distinctly remember we filed bankruptcy in August. I mean, in September, September 23rd of 1988. I was 28 years old.
I'm 64 now. But I can remember like it was this morning in August, about 30 days before we filed, I couldn't sleep. And I got up at 4 o'clock in the morning. And the kids are asleep. Sharon's asleep. And I was sitting in my little recliner. And I had some books stacked there that I was reading. I had a Bible sitting there. And I was just crying. I was scared.
And I thought, okay, God, you're going to have to help me because I don't know how to do this. and I randomly opened my Bible, and it fell open, and I just started looking down the page, and there was Romans 5, and it says, Rejoice in your tribulations. And I looked up at heaven, and I said, I don't think so. Wow. And because...
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Chapter 3: What are the biggest psychological errors in wealth thinking?
I think if I plant this corn this way, I've never done it before, I'm actually going to get corn. So I'm going to plant the corn. You know, I think if I, okay, the debt snowball, I'm going to list my debt smallest to largest, pay minimum payments on everything, but the little one, attack the little one. It's not mathematically correct. Well, actually, technically is, I'll tell you in a minute.
But it's not, you know, what about the highest interest rate? Shouldn't we pay that off first? No, you need a win. So you believe you need to get the locus of control straight. You need to get a sense of agency, a sense of I can control the controllables. I am actually driving this bus. I am not a victim of the culture. I can actually control and I can actually pay this stupid car.
You pay off a little $500 credit card. You go, okay, that's one down. Maybe let's try it again. And then you'd pay off a $1,500 and then boom, you knock out a $3,500 motorcycle payment. And then, you know, and, and as the, the more that more of the proof is in there, the more they get fired up, the deeper they sacrifice, the faster they go. And we all do that.
Chapter 4: Do you need to be ruthless to succeed?
And probability of completion there is much higher than the probability of completion of paying off the highest interest rate first, because it might take three years for you to get a win. And so when you factor in probability of completion, the debt snowball is mathematically superior to doing it the other way. But nobody puts in probability of completion in the mix.
It's psychologically superior, right?
Yes. And people actually do it. They don't do the other one.
That's the difference. Look, I've had a number of conversations. Richard Dawkins was one of the people that I had this conversation with. And... I tried to explain to him why trying to force people either out of faith or into whatever worldview it is that he wanted through raw, what he would consider rationality,
is fundamentally uncompelling because what you're telling people to do is to deny the thing that's most real to them, which is story, narrative, persona, legend, archetype, and rely on the thing which is most unreal to them, which is statistic, probability, We have no sense of that. And I think that you have, I really appreciate the first I learned about your debt snowball.
You're right, mathematically, in raw spreadsheet terms, mathematically suboptimal. But as soon as you fold the complexity of a human and our motivation system into it, it makes way more sense.
Yeah. And again, probability of completion as a result. And so that's what it is. That's why the seven baby steps. That's why the clear path. That's why we went back to that same motivation on the business outline we just did was we're still trying to show, okay, I'm a treadmill operator. Now, when I'd level up on my time management, I get my first team member. I get to move to the next level. Oh.
This is working. This is working. I'm going to, I'm going to work a system. I see a believable system and I'm going to plug into it. Uh, if you go to the gym and you, you, you run for two hours on a treadmill and, uh, and you change your diet and eat sawdust and, uh, crappy food, crappy tasting food, because it's healthy or whatever. Uh, and then you gain weight, you will quit, right?
You would only do those punishing activities unless you're a masochist. You would only do punishing activities in order to win. No discipline seems pleasant at the time, but it yields a harvest of righteousness.
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