Personal finance expert Dave Ramsey isn’t known for sugarcoating his financial advice, and in a recently uploaded snippet from a classic episode of “The Ramsey Show,” he made a sharp distinction between being broke and being poor—and why one is fixable.
“Poor is a state of mind. Broke is I’m passing through,” Ramsey said. “I’ve been broke, but I’ve never been poor.”
Ramsey said that when he was broke, it wasn’t because someone held him down; it was because he made bad choices. “It was stupid decisions,” he said. “Had I continued to make those stupid decisions, I would continue to be broke.”
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According to Ramsey, people living in North America aren’t stuck economically unless they choose to be. “You’re not held back. You’re a whiner. Okay, stupid,” he said, calling out the idea that external forces are always to blame.
He added that while there are “things in America that oppress the poor,” economic opportunity still exists: “What you plant is what grows. If you plant nothing, the government’s not going to come along and plant something.”
Ramsey also emphasized that personal responsibility is the starting point for financial recovery. “There’s a cause and effect of sowing and reaping in our lives,” he said. “If you live in North America, you are not in an economic climate that holds you down.”
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Ramsey took particular aim at people who play the lottery hoping to escape poverty: “Poor people that are playing the lottery are stupid. You’re stupid.” And when they say “Well, that’s the only way I’m getting out,” he mocked the idea that winning the lottery is a viable plan, pointing out that the odds of winning are so low, it’s essentially a fantasy. “You are 12 times more likely to be struck by lightning twice than to buy the ticket,” he said.
Instead of wasting $35 on lottery tickets, Ramsey suggests investing in a 401(k). “You’ll have $411,000 when you turn 65,” he said. “At 8%, that’s $33,000 a year with never touching the nest egg. That’s $2,500, $2,700 a month.”
His point? Wealth comes from repeated good decisions over time—not luck. “If you plant corn, you’ll have corn. Voila. And don’t be shocked that corn grows,” he said. “If you do rich people habits with money and have rich people mindsets with money, eventually you will be rich people.”
