Yahoo Finance Jaspreet Singh: How To Go From Broke to Millionaire in 10 Years
Everyone would like to have more money. But only some people put plans into place to get there. George Kamel, the co-host of “The Ramsey Show,” was one of them.
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Kamel went from having a negative net worth to being a net-worth millionaire in about 10 years. His story shows how anyone can increase their net worth over time as long as they have a plan in place and consistently follow it.
Here’s a look at the steps Kamel took in his journey from broke to millionaire as he recounted in a recent interview with Jaspreet Singh, the host of “Minority Mindset.”
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Kamel Cut Up His Credit Cards
The story starts with Kamel looking at his financial life and realizing it wasn’t where he wanted it to be. He had a negative net worth because of debt and became motivated to change that.
The first step in Kamel’s process was to physically cut up his credit cards. He never wanted to rely on them again and proved it by disposing of them immediately.
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Saved $1,000 for Emergency Expenses
After cutting up his credit cards, Kamel’s first goal was to save a small amount of money for emergency expenses. He set a goal of $1,000 and reached it quickly thanks to a radical rethinking of his spending habits.
Kamel stopped spending his money on unnecessary purchases. He also picked up side hustles, sold things online and generally did everything in his power to increase his earnings.
The reason Kamel started with a small emergency fund was to make sure he wouldn’t have to go back into debt if he faced a sudden unexpected expense like a car repair or ER bill.
Paid Off $4,000 in Credit Card Debt
Once Kamel reached his initial savings goal, he went to work on paying off his old credit card debt. He did it by budgeting every dollar, not eating out anymore and focusing on side hustles.
Kamel decided to pay off his credit card debt first because he believed in the snowball method of paying off debt. This says to pay off debt in order of the smallest amount you owe to the largest amount, regardless of interest rate.
For example, if you owe $4,000 in credit card debt and $100,000 in student loans, Kamel’s advice would be to pay off the entire credit card debt first, even if it’s a lower interest rate than the student loans.
Kamel notes that it makes more mathematical sense to pay off high-interest debt first. But by starting small, he felt he gained momentum easier and kept his motivation going for longer.
That may or may not be the right strategy for you. There are other ways to pay off debt that could be a better fit for your lifestyle or budget.
Saved 3-6 Months of Living Expenses
At this point, Kamel was two years into his journey and entirely debt free. But he was still a long way away from being a millionaire.
The next step was to save 3-6 months of living expenses to create a real emergency fund. He did this by following the same strategies he had been using, including taking advantage of side hustles and not making unnecessary purchases.
When Kamel had debt earlier, the extra money he brought in went toward paying it off. Now that he no longer had any debt, he was finally able to put the extra capital toward his goal of becoming a millionaire.
Invested 15% of Gross Income in Retirement Accounts
Now that Kamel was debt free and financially ready for unexpected expenses, he was ready to begin investing. For him, that process didn’t mean choosing winning stocks or taking aggressive risks in the market. He simply invested 15% of his gross income into a tax-advantaged retirement account every month.
Kamel credits his consistency with generating a large amount of his wealth. He says eight of 10 millionaires reach their status through employer-sponsored retirement plans, and he saw no reason he couldn’t do the same.
Paid Off His Mortgage Early
Finally, when Kamel and his wife decided to purchase their first home, they shopped with the idea of paying off their mortgage early. This meant they didn’t buy their dream home but instead bought a cheaper, modest house with a large down payment and a 15-year loan.
But the couple didn’t stop there. They kept pursuing side hustles, budgeted aggressively and managed to pay more than they owed on their mortgage each month. Eventually, they paid off their home in full and officially became net-worth millionaires about 10 years after starting this journey.
Takeaways From George Kamel’s Story
Kamel’s journey from broke to millionaire in 10 years shows what consistent hard work and aggressive budgeting can do for your financial future. But is it something the average person can repeat?
The answer can vary based on your income and expenses. Anybody can follow Kamel’s process. However, the amount of time it takes you to complete each step will depend on how much extra income you have after paying bills.
Kamel notes that he and his wife were a dual-income, no-child couple while going through this journey. This gave them more room for saving in their budget than the average family might have.
Still, don’t let that discourage you. Even if it takes you longer to become a millionaire, you can get there eventually with the right mindset and financial discipline.
The Bottom Line
Kamel’s example is one you can follow to retake control of your financial future. But it’s not the only way to become a millionaire.
From passive-income millionaire to late-in-life millionaire, you can find a strategy that works for you no matter where you are in your financial journey. The key is choosing a path, getting started on it and not looking back until you reach your goals.
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