Personal finance expert Dave Ramsey has long urged people to avoid flashy purchases, but even he had to splurge on a luxury purse for his wife.
Discussing spending habits of wealthy people on “The Ramsey Show,” he said most build their fortunes by ignoring what others think and avoiding purchases meant to impress. However, Ramsey said once people reach a certain wealth level, they see pricey purchases differently because the cost is small relative to their income or net worth.
“I’ve got a friend who’s worth about $200 million, he bought his wife a $5,000 Coach purse,” he said. “I couldn’t even get my head around the idea of doing that, until I did it for my wife later, but it blew my mind that somebody would pay that for a purse. I still don’t understand it.”
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Ramsey said people worth $100 million or $200 million live in a “different world,” but most should focus on the first layer of wealth, which he defined as $1 million to $10 million. He said people in that bracket build wealth through financial discipline and are often unrecognizable in everyday settings.
Ramsey said that after meeting many “everyday millionaires,” he can tell when he sees one and described a man he recognized as a millionaire outside a church.
“He was wearing blue jeans and cowboy boots, but as I walked past him, I told one of my guys, I said, ‘That’s everyday millionaire,'” he said. “Even though there was nothing flashy, he was just still put together, you could feel, I can feel them, I can feel the everyday millionaires. I’ve just met so many of them over the decades of doing this.”
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Ramsey said flashy cars and luxury vacations are often mistaken for wealth and urged people to live by their income rather than act rich. He said one of the “greatest” compliments he has received came from a senior corporate executive who came to meet him and said people in the area often described Ramsey as “unassuming.”
