Most people dream of financial freedom, but the path to becoming a millionaire often seems complicated. For Dave Ramsey, a well-known personal finance guru, anyone who is willing to follow a consistent plan can reach $3.6 million by age 65. In a recent tweet, Ramsey outlined a simple investing strategy that, while simple, requires discipline and patience.
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According to Ramsey, if you invest 15% of the average American household income ($77,000) in growth stock mutual funds, you can reach $3.6 million by the time you reach retirement age by investing at an annual rate of return. 10%, based on age. 30 and continues until 65. As Ramsey says: “It really is that simple, but it’s not easy. If it were easy, everyone would be a millionaire.”
Ramsey’s advice is most effective when combined with a coherent investment strategy. Saving 15% of your income each year may seem like a lot, especially with bills and other commitments, but Ramsey’s approach is all about the long-term game: a gradual buildup that pays off big when you retire. Compound interest is the real magic here: the sooner you start, the more time your money will have to grow.
Making small, regular contributions to growth stock mutual funds can generate big returns over time. This idea is not new, but people often forget about it because they believe they need high income to build wealth. What you really need is a plan to keep investing regularly, not a huge salary.
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As Ramsey points out, while the strategy itself is simple, it’s not necessarily easy. Most people struggle to commit to a plan that spans decades. As life gets in the way (emergencies, lifestyle improvements, unexpected expenses), sticking to the 15% rule requires financial discipline, a budget, and often some really tough decisions.