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- [00:06]
A
This episode is brought to you by SmartVestor. Connect with an investing pro near you at RamseySolutions.com SmartVestor Today's question comes from Adam in New Jersey. Dave frequently mentions that teaching is one of the top occupations of those who achieve millionaire status. I have three children in high school, and I want to present teaching as an option for them. My question is, how do they become millionaires on a teacher's salary? Great question. So he's referring to our millionaire study we did of over 10,000 millionaires. And we ranked the careers, and the first one was engineer, followed by accountant, followed by teacher. So the third career in there.
- [00:44]
B
Yeah, followed by business executive, followed by lawyer. MDs didn't make the top five. They were number six, just as a thing. So the answer is interesting. Adam, you're falling for the classic belief that income creates wealth, that the only way you become wealthy is have a huge income. And as we studied, George told you, over 10,000 millionaires, 1/3 of them, 33%, never made over $100,000. So the secret to becoming a millionaire is apparently not just having a larger income. Now, it doesn't hurt to have a larger income. It's not a bad thing. But it's not the only way to get there, because one third of America's millionaires did not become millionaires because of a high income. And that apparently is the teacher answer, right? So what does work? What does work is time and consistency. $100 a month, $100 invested from age 25 to age 65 at the S&P 500, which is the average of the stock market rates, is $1,176,000. $100 per month from age 25 to age 65. So the secret there is they didn't miss a stinking month for 40 freaking years. And $100 makes you a millionaire. So the answer is not the amount. The answer is the consistency, the steadiness, the predictability, the discipline, the stick with it. Time and consistency, not dollar amount, are the primary indicator. So if you want to be a teacher and you want to start saving at age 55, you're going to have a hard time getting there. You want to be whatever and making under a hundred thousand dollars a year, and you want to be a millionaire starting at age 55, you're going to have a hard time getting there. But these teachers did not start then. Most of these teachers started teaching straight out of college, and they immediately signed up for their retirement programs and started putting money in every month. And it was more than $100 even back then. And they're teaching freaking seventh grade social studies. And they put money in every single month and they have a 30 year career and it's more than $100 and they've got more than a million dollars in there. Oh, and by the way, they got married and their husband or wife was doing the same thing. So it's not about, you know, we always hear these ridiculous people like, you're crazy. That's impossible. Teachers can't. You can't make it out of teachers. Listen, you can get mad about it, but it's data. We didn't make these freaking numbers up. It's not a philosophical argument, you idiot. It's a math thing. You argue with math, you end up looking stupid. And so these people wailing and gnashing of teeth on TikTok that somehow we need to tax the billionaires. What you need to do is get off your own little butt and get out of your mother's basement. That's what you need to do. And then you can go be somebody, honey. That's the difference. And so this is how teachers do it. Steady time and consistency. It's magical. You know, the first time I saw that I was like 21, I was 20, 21 years old.
- [04:14]
A
When you saw a compound growth.
- [04:15]
B
When I saw that you could have $1,176,000 at $100 a month from age 25. And I was 21. And I thought, I got four years on this. I can do this, I can do this. You know what I did, I didn't do sounded cool. Instead, I went and tried to get rich in real estate and, you know, flipping houses before there was cable TV to tell you how. And I went broke trying to get rich quick because I was too stupid to do time inconsistency. But the thing that we did discover, Adam and I think I always, because I was a little bit shocked too when we got the data in. We had several aha moments from the data on this research that we did not see coming. And one of them was teacher is in the top three. Didn't see that coming. I would not have predicted that. So you got a, you got engineer, accountant, teacher, business executive, lawyer. We could not figure out what was driving. And MD is not there. They're number six medical doctors. Number six. Now medical doctors get there generally because they outearn their stupidity. They're not generally good with money. Stereotypically, okay, there's plenty of them that are good with money, but a lot of docs are just straight up stupid with money. It's not unusual at all. But the other five categories, what we did, finally figured out as we sat and brainstormed through what in the world is happening here? All of. What do they all share in common? They're all process people. Okay? There's one way to build a bridge if you're an engineer, that it doesn't fall down. There's a set of mathematical calculations that span that beam, that keep the building from falling in. If you put that size beam up, it doesn't fall. You put that size beam up, it does fall. Engineering is not art. It is science. You have to follow the process or people die. You have to follow the process or the building falls down. The bridge falls down. Okay? Accounting. There's not an artistic element to accounting. There's Generally Accepted Accounting principles. You either follow them or you're wrong. It's called gaap. Okay? In the accounting world, gap. Generally Accepted Accounting Principles, you either do accounting properly or you get the wrong answer. It's a math thing. It's a process. So find the rules and follow the rules. If you're an engineer, find the rules and follow the rules. Process driven people. If you are an accountant, if you're a teacher, you have a lesson plan. There's a process. You lay out exactly how we're going to handle this classroom. We don't make it up as we go. Mrs. Doubtfire is not your teacher, okay? That's not how this works. Teachers are process people. Now, some of you think they're otherwise and they're loving and they're kind and they are. The good ones are those things. But they're also driving toward an end result of you actually getting an A on the exam because you freaking learned something while you sat in their classroom. That's what teachers do. They drive a process. They're project driven, and the kid is the project. Okay? Guess what? If you're a business executive, same thing. Business acumen demand certain principles be followed. If you're a lawyer, try going before the judge and making up things in the law. The judge will throw you out, maybe put you in jail for contempt. They will sit you down, counselor. Right? There is one way to be in front of a judge. There's one way to do litigation. Follow the law, follow the system. It's a process. And so you submit yourselves in all five of these career paths. You submit yourself to a proven set of truths. The law of gravity is this. If you jump off a building, you hit the sidewalk, and guess what? Personal Finance is the same thing. You're either going to live on less than you make or you're going to be broke. You're either going to live on a plan called a budget or you're going to be broke. You're either going to invest money or you're going to be broke. There's really no options here. And the more you stay out of debt, mathematically, the more money you've got to invest, the steadier you invest, the more money you're going to have over the longer period of time period. It's a process. The stuff we teach is very the baby steps. We don't let you violate the baby steps. Why? It's just like accounting. You don't violate it. It's a process. Follow it. It works. It's called common sense. In our world, we call it a lot of different things. We laugh about it around here, but that's the reason these teachers do so well. That's is they're process people and they're.
- [08:37]
A
Not trying to flex either. They're not trying to impress anyone. They're trying to survive running a chaotic classroom. So it's that simple. You make 50 grand, invest 15% of that, that's 625amonth. You'll have $4 million from 25 to 65. And that's if you never get a raise.
- [08:51]
B
And so if you're half wrong, they only got 2 million and never got a raise because it's a mean old school board and people don't love teachers and it's horrible out there in society, we pay athletes more than we pay teachers. Oh my God. But keep investing.
- [09:08]
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Thanks for tuning in to Ramsey Everyday millionaires. Need help with your investments? Connect with a smartvestor pro@ramseysolutions.com smartvestor or click the link in the show notes. Ramsey Solutions is a paid non client promoter of participating pros. Learn more@ramseysolutions.com SmartVestor.