Financial Freedom

dave ramsey

What is the number one indicator of people building their wealth in their 401k?  Dave Ramsey’s answer would have been rate of return. How much the investment yields.  Whether a single stock or a mutual fund the difference if making 2% on a money market for the last 20 years versus 12% on a good money market account for the last 20 years mutual fund would be astounding This is exponential progression.  The difference between 8% and 12% is just staggering.  You would think between 8 and 12 % would be like a fourth more, but it is more like times 2 or times 3.

Dave Ramsey reiterated his point that if he were to guess on that the biggest factor for driving wealth it would be rate of return and he would be wrong.  The correct answer is to invest in your 401K consistently.

Using Financial Freedom, gets you out of debt, creates an emergency fund so you do not take money from the pot of money that goes into investment every month. If you have an emergency Dentist visit, you need to take that money out of the emergency fund, not your 401k.

So on top of great meteoric rises that can get you to retire by 40, let’s not forget the basics in getting there either.  This may not get you retired by 40, but it can allow you to live comfortably by 50.

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