Radio host and author Dave Ramsey has spent years giving advice to people on managing their money and growing wealth.
In an exclusive interview with TheStreet’s Editor-in-Chief Sara Silverstein, Ramsey offers an intriguing take on how money affects people’s behavior (video above).
“Do you find that money makes people happy? Where do you stand on that?” Silverstein asked.
Ramsey addressed the question, saying it’s important to have the necessities covered for a degree of happiness. After that, he said, other factors get added to the equation.
“Well, there is a certain point, and there’s some research out there to back this up, that a little bit more money does add some happiness because you’re not stressed out about every little thing,” Ramsey said. “You’re not stressed out about the light bill. You’re not stressed out about whether you can feed your own children or buy them shoes. But past a certain point of necessity, then more money does not equal happiness.”
Ramsey suggested that wealth can have the effect of magnifying the characteristics people already exhibit in their daily lives.
“Being content with where I am is a big indicator of whether someone can be happy,” he said. “We tell folks all the time, hey, get your big pile of money. There is nothing wrong with getting a big pile of money, but it’s going to make you more of what you already were.”
“If you were an angry person and you get a big pile of money, Lord help the people around you,” he added.
Other Behaviors That Can Be Magnified By Wealth
Ramsey gave a few more examples of personality traits that money can exacerbate.
“You know, if you’re a a giving person, a generous person, you get a big old pile of money, you become what we call a philanthropist,” Ramsey said. “If you’re crazy and you get money, boy, you are cray-cray. I mean, you are out of control, right? And so the crazy in your family magnifies.”
“So whatever good and bad is going on in your life, people that are depressed when they get money, they’re more depressed,” he continued. “They’re not less depressed.”
Ramsey talked a little more about wealth, happiness and the role of generosity.
“And so people that are happy and content when they get money, they’re more happy and more content,” he said. “So it’s a magnifier more than anything else. And if you eat enough lobster, hey, it tastes like soap. There’s only so much consumption you can do.”
“When you learn the power of generosity, the power of giving, and what that does in your in your spiritual life and your emotional, psychological and relational life, what that does, you’re going to find that generosity is actually the most fun and the most happiness quotient that money possibly can provide you,” Ramsey said.
Ramsey has frequently said that getting out of debt and paying off a home are a couple important places to start when it comes to building wealth.
“If you’re a new home buyer, listen to me carefully,” he has said. “We’ve studied millionaires for decades. The typical millionaire, the first $1 million to $5 million of net worth they get, is their paid-off home. And you’ve got the opportunity to set yourself up to do that fairly quickly.”
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