Dave Ramsey is an American radio personality and personal finance advisor. At 26, he made $250,000 annually and had a real estate portfolio worth $4 million. At 28, he lost everything and filed for personal bankruptcy in September 1988. Today, 63-year-old Dave Ramsey is worth $200 million.
He hosts a syndicated radio talk show, The Dave Ramsey Show, which ranks among the top five in the U.S. His show airs on over 600 stations and reaches over 18 million weekly listeners nationwide.
Are you curious to learn how Dave Ramsey rebuilt from the ashes? Learn how he rose from financial hardships to the peak of success.
The Journey to Affluence: Who is Dave Ramsey?
The Early Years
David Lawrence Ramsey III was born on September 3, 1960, to a family of real estate developers. He was born and raised in Antioch, Tennessee. Dave went to Antioch High School, where he was a member of the school’s hockey team.
His father taught him work ethics from an early age. Ramsey remembers asking his father for money to purchase a popsicle. Instead of giving him the money, his father told him to get a job. That conversation transformed Dave’s life for good.
He turned into an entrepreneur from that day on. He started several businesses as a child, including taking care of lawns. He also sold leather bracelets while still in school.
After high school, Ramsey enrolled at the University of Tennessee in Knoxville for a Finance and Real Estate degree. In less than a month after turning 18, he took his real estate exam and acquired his license. He began selling properties, using the commission to pay his college tuition fee.
Embarking on the Road to Success
After college, Ramsey began to flip properties. He had the advantage of having family connections that enabled him to secure financing for his deals. By 1986, the 26-year-old Ramsey earned an annual income of $250,000. He held a real estate portfolio of over $4 million. His net worth was a little over $1 million at this time.
His early success was short-lived. When the 1987 Competitive Equality Banking Act passed, he received a loan recall notice for his $1.2 million debt. The order wanted him to pay up in 90 days. He filed for personal bankruptcy after paying a big part of the debt. He could not pay the remaining $378,000.
During his financial recovery season, Dave Ramsey began teaching financial discipline to members of his local church.
Dave Ramsey’s Business Empire
Ramsey’s financial troubles led him to the church. He began attending a local church and reading the bible. To his surprise, he realized that the bible had much to educate about finances. At one point, a couple in the church was going through financial distress. The man approached Ramsey for help.
In 1992, Ramsey founded a financial training business called The Lampo Group. Initially, he had only 37 students, but the class grew to around 350 in a few years. In 2014, Dave rebranded The Lampo Group to Ramsey Solutions. The company has headquarters in Franklin, Tennessee. In 2019, he opened a 47-acre campus in Franklin.
How Dave Ramsey Built His Wealth?
The Dave Ramsey Show
In 1992, Dave Ramsey became a radio show host of The Money Game, airing on a local radio station in Nashville. The show had three hosts, alternating in shifts. When the two co-hosts left, Dave changed the show to The Dave Ramsey Show in 1996. One of the co-hosts was Dave’s friend, Roy Matlock.
On the show, Dave talks about money and getting out of debt. The show was renamed again to The Ramsey Show.
The show is famous for its three-hour call-in format. Listeners nationwide call in with money problems. They explain their issues to Ramsey, who helps them with a possible way out. The callers could be rich people looking for better ways to invest. They could also be people struggling with poverty and debt.
Over time, the Nashville local radio show broke the barriers and went national. It is now a syndicated national radio show that airs on over 600 radio stations. The show reaches millions of people across the United States and Canada. It is aired in podcast format on IHeartRadio and YouTube Live. You can also listen from The Dave Ramsey Show iOS App and live on DaveRamsey.com as audio and video.
Dave Ramsey published his first book, Financial Peace, in 1992. He leveraged his listeners to help sell the book. As an evangelical Christian, Ramsey relies on bible teachings about money to help his listeners and readers. For instance, he quotes the bible verse in Proverbs 22:7 that says, “The rich rule over the poor, and the borrower is a slave to the lender.”
Dave has since become a number one national bestselling author of seven books. He uses his personal finance expertise to help people attain financial freedom. He has been assisting people to regain control of their finances since 1992.
It is evident that his methods work because his books and radio keep gaining prominence. His books include The Total Money Makeover, EntreLeadership, and Smart Money Smart Kids.
David Ramsey started his financial education company in 1992 as The Lampo Group. He rebranded the company to Ramsey Solutions in 2014. Through this company, Ramsey helps people with Bible-based money principles to attain financial freedom.
What started in 1992 with 37 students has grown to employ over 1,000 professionals. Dave Ramsey uses his show to measure the results from Ramsey Solutions. Most of the people who benefit from the company are his radio show listeners. The more they testify positively, the more he trusts his methods.
His nine-lesson Financial Peace University has helped more than 5 million people. His live events have taught over 1 million people across the United States. Ramsey Solutions developed a college and high school curriculum called Foundations in Personal Finance. The curriculum is taught in over 10,000 schools and other learning institutions nationwide.
Take a Look at The Foundations Of Building Wealth – Dave Ramsey Rant:
The Secret Behind Dave Ramsey’s Wealth: His Philosophy
The Envelope System
The envelope system is a budget-tracking trick that tells you what to spend on what. The system requires you to keep money in labeled envelopes for every budget for the month. As you go about the month, you can look inside your envelope and see what is left.
If there’s an area of your life where you overspend, you take enough money for that and put it in an envelope. Once it is depleted, you do not take any more from another envelope. That area waits until the next month.
Debt Snowball Method
The debt snowball method is a strategy for reducing debt from the smallest to the largest. Just like you build a huge snowball from small snowballs, that’s how you build your financial freedom by clearing your debt bit by bit.
7 Baby Steps
One of the courses offered by Ramsey’s Financial Peace University is the Seven Baby Steps. According to the course, you should go to the next step only after completing the previous one. Here are Dave Ramsey’s Seven Baby Steps.
- Put at least $1,000 in an emergency savings fund.
- Clear all your non-housing debts as soon as possible, from the smallest to the largest.
- Increase your emergency fund to at least six months ‘ income.
- Establish a retirement plan and invest at least 15% of your gross income.
- Establish a college fund if you have children.
- Clear your mortgage loans as early as possible.
- After you have accomplished all the six, you can begin building wealth.
Dave Ramsey’s Lifestyle and Philanthropy
A Glimpse into Dave Ramsey’s Life
Dave Ramsey has been married to Sharon Ramsey since 1982. He has two daughters and a son. All his children work for his company, Ramsey Solutions. Racheal Cruze co-wrote one of Ramsey’s New York Times bestsellers, Smart Money, Smart Kids.
Ramsey is an evangelical Christian and a staunch conservative.
Frequently Asked Questions about Dave Ramsey’s Net Worth
Was Dave Ramsey Born Rich?
Though Dave Ramsey was not born to poor parents, his father was strict about money. To get the things he wanted besides basic needs, Dave had to work for the money. At 12, his father refused to give him money for popsicles. Instead, he told him to get a job. As a child, Ramsey started many businesses to help raise his pocket money. He worked his way up to build a net worth of $200 million.
Who is Dave Ramsey’s Wife and Children?
Dave Ramsey is married to Sharon Ramsey. The two have been together since 1982 and have three children. His daughters are Denise Ramsey and Rachel Cruze, and his son is Daniel Ramsey.
How Much is Dave Ramsey’s Annual Income?
Dave Ramsey has a net worth of $200 million. He runs a syndicated radio program and personal finance education company called Ramsey Solutions. He takes home a net annual income of $15 million from his business ventures, including real estate investments.
Final Thoughts: Dave Ramsey’s Inspirational Path to Wealth
From the ground up, Dave Ramsey knew he had to work to get what he wanted. His father taught him the importance of work ethics from an early age. As a child, he started businesses to raise pocket money. This early entry into business helped him build an impeccable work ethic. He became a millionaire at 26. Though he lost his initial wealth, he used his radio career and real estate investments to rebuild himself to attain a net worth of $200 million.