Personal finance expert and best-selling author Dave Ramsey on Tuesday provided tips on how to become a millionaire, stressing that "the number one most powerful wealth-building tool that the typical person has is their income."
The author of the new book titled "Baby Steps Millionaires," which reveals "how ordinary people built extraordinary wealth" and how others can as well, offered the tips on "Mornings with Maria" on Tuesday.
Ramsey, a number-one best-selling author and the host of "The Ramsey Show," emphasized that anyone can become a millionaire no matter their starting point.
He noted on Tuesday that "the average family is paying 1200 bucks a month in non-mortgage debt" and stressed that it’s important to "break the back of the personal debt," which is often tied up in car payments, student loans and credit cards.
"You free that up and put that in your 401(k), that turns into a million dollars in just a few years," Ramsey said on Tuesday, noting that he had discovered this while studying millionaires for his book.
"We did the largest study of millionaires ever done in North America, over 10,000 of them, the research was airtight, and we found very simple things for the first $1 to $5 million of net worth," he said.
"They fully funded their 401(k)s, took advantage of the match and the Roth (IRA), went into individual Roths and good mutual funds, kind of boring, and they paid off their house, and they look up and they’re 46 years old or they are 36 years old or sometimes 56 years old and they’ve got a million dollars in their retirement, a half-million-dollar paid for house and that’s their first million dollars of net worth."
"There’s about 15 million of those in America," he went on to note.
Ramsey also stressed the importance of "living on a plan."
"No one wins at anything, your marriage, your kids, your life, your business, without aiming at something," he told host Maria Bartiromo.
"There’s a whole series of actions that you engage in intentionally and in personal finance, that’s called a budget, telling your money what to do," he added.
He went on to stress that in a business "we have to tell our money what to do, we have to have a desired future for the profit and loss for the quarter and we’re aiming at things and have strategic moves to do that."
Ramsey went on to say that "in your personal life, it’s the same thing."
He stressed the importance of getting out of debt, building an emergency fund and contributing to a 401(k).
"I know it’s not as sexy and glitzy as talking about Bitcoin, it’s kind of boring actually, the difference is, it works every time," Ramsey stressed.
As it pertains to cryptocurrency, Ramsey told Bartiromo that he thinks "it’s kind of fun" and enjoys following it, but it’s an anomaly.
"It shouldn’t be a big part of a personal financial plan to build wealth," he said. "It can be a small part for entertainment."
He went on to suggest that one can consider investing in cryptocurrencies "as long as the exposure is money that you can afford to lose."
"We’ve got people mortgaging their homes, we’ve got people taking their retirement out of their 401(k)s and dumping it into crypto as if it is a proven process to build wealth and it’s just not a proven process," Ramsey stressed, acknowledging that the "commodity" is "going to be around."
Bitcoin has been bouncing around this year, with prices hovering above $42,000 on Tuesday after briefly dropping to their lowest level since September 2021.
The dip comes amid investors' concerns about rising bond yields and worries about the Federal Reserve potentially accelerating the timing on its interest rate hikes in 2022. Additionally, a bitcoin mining outage caused by a shutdown of the internet in Kazakhstan over the weekend has also impacted crypto prices.
Bitcoin, which hit an all-time high of $69,990 in November, is down approximately 9% year-to-date. Meanwhile, rivals Ethereum and Dogecoin are also experiencing volatility.
FOX Business’ Lucas Manfredi contributed to this report.