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Over the course of his long career, radio personality Dave Ramsey has noticed several key indicators of Americans’ financial status.
One of these metrics, he said on an episode of The Ramsey Show, might even predict whether a middle-class family could break out of their income bracket and become wealthy.
At least, that is what he told Micah, 24, from Washington, DC, when the military man called in during the episode looking for financial advice regarding a potential car purchase (1).
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Micah said he earns $80,000 a year. He already owns a car worth $13,000, but is tempted to purchase a new sports car — a Nissan 370Z — for $30,000 in cash. He admitted this is purely an indulgence and that the new car would be for “play.”
He called Ramsey to ask whether he should invest the money rather than spend it on a vehicle — and that’s when Ramsey let him in on a little secret.
Ramsey’s advice was simple: say no to the second car. As for his reasoning, the finance guru pointed to something he’s noticed over the years: “The way you know someone is going to stay middle class is when they have two very nice cars — that are obvious [sic] $500, $600, or $700 payments — sitting in front of a middle-class house,” he said.
Americans borrow an average of $42,332 for new vehicles and $27,128 for used vehicles, according to data from Experian (2).
The Ramsey Show hosts pointed out the obvious: more vehicles means more bills.
If, unlike Micah, you need to take out a loan to buy a car, then that’s an even bigger reason to reconsider your purchase. Why buy another car and add an additional monthly bill to your plate if you’re still struggling to pay the old car off?
If you already have a car loan, and you’re trying to keep on top of your payments across multiple debts, consider a personal loan through Credible.
Credible makes it easy to streamline your debt repayment at an affordable rate. Their online marketplace of vetted lenders provides personalized debt consolidation loan offers based on your needs, allowing you to pay off your debt more efficiently at a fixed rate without juggling multiple bills — or another new car loan.
Read More: Approaching retirement with no savings? Don’t panic, you’re not alone. Here are 6 easy ways you can catch up (and fast)
Beyond paring back your monthly car payment, it’s also worth cutting down on your monthly insurance costs.
OfficialCarInsurance makes that process easy.
Here’s how it works: enter some basic information about yourself and the vehicle you drive, and OfficialCarInsurance will show you rates offered by leading insurance providers like GEICO, Allstate, and Progressive.
“If you’re going to build wealth, you have to keep as small an amount as possible going into things that go down in value,” Ramsey said. He says that someone trying to build wealth should have no more than 50% of their income in depreciating assets like cars.
What should they do with the rest of their income? Well, Ramsey is a big fan of the emergency savings account.
On a 2025 episode of The Ramsey Show, he said “I don’t care if you keep it in the sock drawer,” adding, “The emergency fund is not about making money. It’s insurance to keep you from cashing out or going into debt (3).”
An emergency fund can help you pay off debt and stay on track if you’re forced to face the unforeseeable — like a surprise job loss or a medical emergency.
And even though an emergency account doesn’t have the potential to earn the level of returns you could get from investing in the stock market, you can still get a boost on your cash.
For instance, a high-yield account, such as a Wealthfront Cash Account, can be a great place to grow your emergency funds, offering both competitive interest rates and easy access to your cash when you need it.
A Wealthfront Cash Account can provide a base variable APY of 3.25%, but new clients can get a 0.65% boost over their first three months for a total APY of 3.90% provided by program banks on your uninvested cash. That’s 10 times the national deposit savings rate, according to the FDIC’s December report.
With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, you can ensure your funds remain accessible at all times. Plus, Wealthfront Cash Account balances of up to $8 million are insured by the FDIC through program banks.
Once you have enough money to protect yourself, you should set up systems that make investing automatic and painless.
With Acorns, you can invest while making the most of your daily purchases.
Whenever you make a purchase with your linked debit or credit card, the app automatically rounds up the total cost to the nearest dollar and invests the change in a diversified portfolio. You can also link these investments to your IRA, ensuring you’re maximizing your retirement savings with every purchase you make.
Beyond investing in the market, you might want to consider alternative assets for your portfolio. For instance, nearly half of surveyed Americans with bank balances of $1 to $5 million said that real estate was a top factor behind their wealth, according to a survey by wealth manager Empower (4).
So, rather than spending your money on a depreciating asset like a car, you should consider putting that money into investment opportunities that will increase in value, diversify your portfolio and earn you passive income — all factors that can help you build wealth.
You don’t need to buy a property outright to tap into this asset class though. You could invest in shares of vacation homes or rental properties through Arrived.
Backed by world-class investors, including Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties, earning a passive income stream without the extra work that comes with being a landlord of your own rental property.
To get started, simply browse through their selection of vetted properties, each picked for their potential appreciation and income generation. Once you choose a property, you can start investing with as little as $100, potentially earning quarterly dividends.
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We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Dave Ramsey (1); Experian (2); (3) YouTube, Dave Ramsey Show; Empower (4)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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