You can only imagine the knowledge that’s shared when billionaire Mark Cuban and financial guru Dave Ramsey get together.
When the two sat down on “The Ramsey Show” in November 2022, the conversation quickly turned to credit card debt.
“If you use your credit cards, you do not want to be rich,” Cuban said. “That’s my favorite line; I tell it to people all the time.”
Both Cuban and Ramsey went on to explain the perils of credit card debt, with Cuban making it clear that the best place to invest is to pay off all of your credit cards and burn them.
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“Your credit card, you know what your return is,” he added. “If you’re paying 15%, 20% interest, if you pay that down, you just earned 15% or 20%.”
Despite the well-meaning advice, avoiding credit card debt is easier said than done. Many Americans rely on credit cards to make ends meet.
A recent update by the Federal Reserve Bank of New York notes that Americans, as a whole, have $1.3 trillion in credit card debt. Yes, that’s a trillion with a “T.”
And if that’s not scary enough, the average credit card balance of an American household is closing in on $8,000. Roughly 10 years ago, that number stood around $5,500.
Ramsey shared his 2 cents, explaining that the wealthiest people in North America understand the benefits of eliminating debt from their lives.
“The Forbes 400, the 400 wealthiest people in North America, when surveyed and asked what’s the way to build wealth, 75% of wealthy people — not your broke brother-in-law with an opinion — but wealthy people say, get out of debt and stay out of debt,” he said.
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He went on to add that the reason for this approach is simple: Eliminating debt gives you power over your largest wealth-building tool, which is your income.
Consulting a financial adviser can provide additional guidance and support for those struggling with debt. Financial advisers offer personalized strategies to manage debt, create effective budgets and work toward long-term financial goals. They can help with everything from debt management to retirement planning.
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*This information is not financial advice, and personalized guidance from a financial adviser is recommended for making well-informed decisions.
Chris Bibey has written about personal finance and investment for the past 15 years in a variety of publications and for a variety of financial companies. He is not a licensed financial adviser, and the content herein is for information purposes only and is not, and does not constitute or intend to constitute, investment advice or any investment service. While Bibey believes the information contained herein is reliable and derived from reliable sources, there is no representation, warranty or undertaking, stated or implied, as to the accuracy or completeness of the information.
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This article Dave Ramsey Tells Mark Cuban, ‘75% Of Wealthy People — Not Your Broke Brother-In-Law’ Say This Is How You Get Rich originally appeared on Benzinga.com
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