Important Points from the book - Total Money Makeover by Dave Ramsey

 I recently read the book - The Total Money Makeover and here are the important points which i had marked and thought to share it over here for the benefit of all. 

" Overspending that doesn't feel like overspending because things are going well is still overspending "

" Using debt to invest in real estate or stock market and the hope of a quick return will cause you to go broke the minute market turns "

" Winning at money is 80% behavior and only 20 % head knowledge " 

" 90% of people in our culture buy things they can't afford "

" If you will live like no one else, later you can live like no one else "

" The story goes that if you drop and frog in boiling water, he will sense the pain and immediately jump out. However, if you put a frog in room-temperature water, he will swim around happily, and as you gradually turn the water up to boiling, the frog will not sense the change. The frog is lured to his death by gradual change "

" In US, 88% of graduate college seniors have credit card debt before they even have a job ! "

" When you think short term, you always set yourself for being ripped off by a predatory lender. If the red faced kid ( I want it, and i want it now ! " ) rules your life, you will stay broke ! "

" Most people get a car payment and keep it throughout their lives. As soon as a car if paid off, they get another payment because they " need " a new car then. "

" Myth:  you can get a good deal on a new car at 0 percent interest. 

Truth: A new car loses 60% of it's value in the first four years: that isn't 0 % "

" The average millionaire drives a two-year old car with no payments. The average millionaire is unwilling to take the loss that a new car dishes out: that is how they became millionaires. " 

" Myth: you need a credit card to rent a car, check into a hotel and buy something online. 

Truth: a debit card will do all that. "

" Remember, there is one thing the debit card won't do- get you into debt. " 

" An American Bankruptcy institute study of bankruptcy filers reveals that 69% of the filers say credit card debt caused the bankruptcy. "

" A budget is people telling their money where to go , instead of wondering where it went "

" The need for approval and respect drives us to do some really insane things. One of the paradoxically dumb things we do is to destroy our finances by buying garbage we can't afford to try to make ourselves appear wealthy to others " 

" People who win at anything have written goals. Zig Ziglar says- If you aim at nothing, you will hit it every time. P.T Barnum said - Money is an excellent slave and a horrible master " 

" You wouldn't build your house without a blueprint, so why do you spend your lifetime income of over $2 million without a blueprint ? "

" According to Brian Tracy, a study of Harvard graduates who had written goals achieved more financially than the others 97 percent combined !! " 

" The first baby step to your Total Money Makeover is to begin the emergency fund. A small start is to save $1000 in cash fast ! "

" The bottom line is that it is easy to become wealthy if you don't have any payments. You may get sick of hearing it, but the key to winning any battle is to identify the enemy. The reason i am so passionate about your getting rid of debt is that i have seen so many people make huge strides towards being a millionaire in the short term after they got rid of their payments."

" List down your debts from smaller to largest and start clearing them 1 by 1. Start with the smallest few ones first. Once you pay the smaller ones off, it will light a fire inside you. I don't care if you have a master's degree in psychology: you need quick wins to get fired up. And getting fired up is super-important"

" When you pay off a nagging $52 medical bill or that  $122 cell phone bill from eight months ago, your life will not change mathematically yet. You have, however , begun a process that works, and you have seen it work, and you will keep doing it because you will be fired up about the fact that it works. "

" A good rule of thumb on items ( except the house ) is this : If you can't be debt free on it in eighteen to twenty months, sell it. If you have a car or a boat that you can't pay of in 18-20 months, sell it. I loved my car too, but i found keeping that huge debt while trying to get out of debt was like running a race wearing ankle weights. Get a total money makeover so later you can drive anything you want and pay cash for it. " 

" Keep your emergency fund in something that is liquid. Liquid is a money term that means easy to get to it with no penalties. "

" To make more money, you have to plan to make more money. Some people's problem is income, not spending."

" Investing with the long-term goal of security is not a theory to ponder every few years; it is a necessity that you must act on now. You must actually fill out the paperwork for your mutual fund. You must actually put money in that thing. The level of denial the average person has on this subject is alarming "

" Another baby step is not " Get rich quick ". The investing you do systematically and consistently over time will make you wealthy. IF you play with this by jumping in and out, always finding something more important than investing, you are doomed to work till old age because you just have to work. Systematic , consistent investing is the tortoise that beats the hare in the race. When you keep at it, the investing compounds and explodes."