Personal finance expert Dave Ramsey believes it's wrong to assume that most wealthy Americans gained their fortune by exploiting others or inheriting money.
Talking about common misconceptions about how people become wealthy on "The Ramsey Show," he said individuals are in charge of their own destiny and can achieve wealth by adopting the habits of successful people.
"They live on less than they make, they avoid debt, and that’s how they became rich," Ramsey said. "It wasn’t that they rip people off or raided a pension fund or file bankruptcy 22 times or all of your leftist crap, ‘they inherited money, oh I can’t inherit money so how am I going to rich people stuff,' You're a moron, you're just a moron."
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‘Absolute Fallacy'
Ramsey cited a study conducted by his company, Ramsey Solutions, that showed that 90% of America's millionaires are first-generation rich, 79% inherited nothing, and 5% inherited less than $100,000.
"The idea that you inherited money and it made you a millionaire is an absolute fallacy," Ramsey said. "It’s just factually wrong. It’s not where millionaires come from."
Ramsey said that exploiting others does not lead to wealth because people talk about it and share their experiences, resulting in a bad reputation and lost customers. He gave the example of a car mechanic who might make a quick profit by overcharging a customer, but would ultimately lose business over time.
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"Now I’m confused. Being a crook, how did he prosper?" Ramsey said. "It’s mathematically impossible for him to prosper ripping people off. Now, you might get a one-time hit, but nobody goes back for seconds with crooks except stupid people."
‘Good People' Prosper
However, a good car mechanic who charges fairly would thrive in the long term thanks to his reputation and word of mouth, Ramsey said.
"The guy fixes your car. He does a great job and he goes, ‘Oh hey, you know, it's a 35-cent part, it took me five minutes, no charge.' What do you do then?" Ramsey said. "You tell everybody you know to get their car fixed. They’re so honest. Good people are the ones that prosper. Please don’t think otherwise. It just makes you look stupid."
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