- Alright, the time is here.
The man, the myth, the legend,
fellow Ramsey personality and financial expert
Chris Hogan is here. Chris, welcome.
- Well thank you.
- So glad you're here.
- I have been waiting on my invitation.
I keep hearing about the Rachel Cruze Show.
And I thought maybe my invitation got lost in the mail.
- I don't believe it. I f I heard that voice be like,
"Take me on your show," I'd be like, "Yes God, yes."
- Oh listen to you, listen.
But no, it's fantastic.
It's a beautiful set, and I'm excited to be here with you.
- Well I'm glad you're here.
Well, Chris and I have worked together for many years now,
which is awesome.
Actually our desks are right next to each other.
So I feel like I know you so well,
and I know all the work you've been doing all these years.
But the work you're doing right this minute
is really exciting, and I'm really pumped for it.
And I want everyone out there to know what's going on
because not only do you have a new book coming out,
but you did this whole research survey
all about millionaires.
And this whole episode we're talking about
how to build wealth and what does it look like
to be a millionaire.
And you're the expert now, you know it all.
- Well listen, we really dug in. You know,
and it's not just me, this is the team.
So we commissioned the largest study
that's ever been done on millionaires.
- Love it.
- Rachel, we studied over 10,000.
- So a lot of millionaires.
So this is not like you went and grabbed like four people
that have wealth and you're like, "What did you do?"
- No, no.
- Like this is like legit.
- Yeah, we didn't do a focus group where you find 10 people.
- That's right, that's right, no.
- No we did a study. So much so, we commissioned
a company, a research firm, to help us.
Because we didn't just want to get people
that know who Dave is, who Rachel is, and Chris is.
- Right, right.
- Right, we wanted to get out there
and find out the reality.
Everyday people, what is it?
- Yes.
- And so we studied over 10,000 of them.
And I have to tell you, the findings of the research,
the stats that we have, the stories,
and even the myths that we end up busting,
it proves that the American dream
is still alive and well, Rachel.
- It is.
- And it's available.
- It totally is, I love it.
And so that's the thing is, there's so many myths
around this part of our lives, right? Because it's like
you hear "millionaire" and you have all these thoughts
of what a millionaire is, and it's not always true.
- That's right, no.
- Most of the time it's not.
And so we actually sent our very own George Kamel,
if you watch the Dave Ramsey Show on YouTube,
George is a great one, isn't he?
- He's hilarious.
- You just put him in your back pocket, I mean he's just.
- He could fit too.
- He's the greatest thing ever, yeah.
- Yes.
- So George went out on the street to ask
every day people their opinion on millionaires.
So here's what they found.
- Hey guys, George Kamel here.
I'm in downtown Nashville to figure out
what the average person thinks about what it takes
to become a millionaire.
Let's do this.
What do you think the normal careers are
of the average millionaire?
- Doctors, lawyers.
- Singer or movie star.
- Business and investing.
- Tech industry, I'd assume.
- Finance.
- TV.
- How do you think most millionaires got their money?
- Partially inheritance.
- A good salary per year, to invest.
You can't become a millionaire unless you
have the money to do it.
- Inherited it.
- I think a lot of it has to be luck.
- There's one way to become a millionaire.
- What percentage of millionaires do you think
inherited their money or got some kind of trust fund?
- 30%.
- Okay.
- I'd say 80.
- 50% at least.
- 70%.
- What would you guess is the average income
of a millionaire?
- Oh, I couldn't even guess.
I know Kylie Jenner makes a lot of money.
- Kylie Jenner, that's who I think of.
- $200,000.
- $300,000 a year.
- At least $250,000.
- $150,000.
- Do you think you could become
a millionaire in your lifetime?
- Probably not.
- It would be nice, but that's not going to happen.
- No.
- Unfortunately not, no.
- That is like classic though, right.
Like those responses, like that is,
that is the stereotypical response of what you think
millionaires are all about.
- It really is, Rachel, and no matter where you go.
You can go across the country,
and if you grabbed every day people off the street
and you asked them, those are the kinds of answers
you're going to get.
Because that's what people truly believe as reality.
- Yes, so one of the myths on there that I would
totally believe if I wasn't in my line of work
and knew the reality, is, "Oh, people
just inherit their wealth."
Like you know, you think of the Kardashians
or like Paris Hilton, the Hiltons,
right? Like you think of all these famous families.
And that's who the millionaires are.
But that's not true, that's not true.
- No, it is not the truth.
The inheritance is actually a very small percentage,
and yeah some of the people you named,
you're going to hear about that and it happens.
But for every day people,
there are a very small percentage of people
that get any kind of inheritance at all.
And even if they do, Rachel, what I found
in the study is that even if they did get an inheritance,
it was so small, it didn't cause people
to become a millionaire.
And so it's this mindset.
- They're self-made millionaires.
- They're self made, that's the exact term that I use.
So I want people to know this because now
what you have to do as a individual is make a decision
and begin to work a plan that puts you on that path.
It doesn't matter what mom and dad left you
or if grandma and grandad left you something or not.
You still have an opportunity.
- Yeah, yeah, your destiny really is in your hands.
And the other thing that would make sense to me,
again if I didn't know the answers of all this,
but... Is that you need a high paying salary.
Right, because to me it's like, "Oh it's math.
Yeah, you make a lot of money, you invest a lot of money,
and you're going to be wealthy."
But a lot of these millionaires did not have
high paying jobs necessarily.
- No, Rachel, they really didn't.
And people believe that, that you need a high
six figure income.
And so if that's the case,
people that are making the average income
or less than that, then they think it's not possible.
And again, in the study we found out the truth.
It doesn't take a high income.
What it takes is someone that is committed and focused,
and they tell their money what to do.
- Okay, the last myth that I've heard people say,
and people have told me this, you know.
Someone said, "Oh yeah, well you can only become rich
if you just do what rich people do in secret.
Like there's all these secret things
that millionaires know about and they do them,
but they don't share with the rest of the world."
- Right.
- And someone had an entire conversation about that
with me and I remember thinking, what? No,
because that's not the truth.
They don't. It's not luck,
and it's not all these risky, crazy,
secret investments, right.
- Yes, well people believe that.
They think they need to create something, right,
or take some kind of high super risk
with a crypto-currency.
And as you know, we've heard about those things.
- Right, right, yes.
- And you have to be able to do that in order
to become a millionaire.
Again, not true. It's a myth.
And the problem is, Rachel,
with some of these that we've covered,
if you tell a myth loud enough, long enough,
people start to believe it.
So I want people to hear the truth
and understand what's available so they can decide
for themselves and their legacy.
- I love it because, not the risky investments,
because we always say, you know,
and what we teach when we teach people to invest
into retirement, we say all the time like,
it's boring, like it's not exciting stuff.
But it's the diligent, when you do it over and over
and over and over, that's the cause.
- And you know we tell people to what?
Don't invest in anything you don't understand.
- Yes.
- So you need to be able to explain it
to a 10- or 11-year-old.
That's the basics.
Because we don't want to take too crazy risks.
- Right, right.
- We worked hard to make this money.
Now I want people to make their money work for them.
- I love it.
Okay, there's some viewer questions.
And I usually grab viewer questions
from my Facebook group.
Sarah asked, if someone can spare $100 a month,
or whatever amount, and they're just getting started,
where should they put the money?
- We know baby step number one is to save $1,000.
Right? Because when you have that money tucked away,
now you don't have to use that
and you don't have to go see a bank
or you don't have to get a credit card.
- That's right.
- So let's say now that she's already got that in place.
Now what?
Well I want her to use it to attack debt.
Right? Baby step number two.
And then baby step three is to build up
a three to six month emergency fund.
Get that in place and now you're ready to go.
With what I call the wealth building steps.
- Oh, yeah.
- You want to start to put that money aside
to be able to allow that money to grow
for your dreams later.
- I love it, so good.
Okay, and for all of this investing stuff,
you guys, go to our SmartVester Pro.
If you go to RachelCruze.com,
look at that because these are people that
can really help you with your money.
They have the heart of a teacher,
not the heart of a salesman.
And they're awesome.
Because again, the investing world,
like what we're talking about on this episode,
it's intimidating.
- It is.
- And I remember even Winston and I,
when we first sat down with our SmartVestor,
when we first got married and like combined our money
and he was talking to us,
a few times I was like, "Can you explain that again?
Can you explain that again?"
And even as Dave Ramsey's daughter, like there were things
that I didn't understand.
And I made him keep explaining it until I grasped it.
So don't feel stupid.
- No.
- Ask questions.
- I appreciate you bringing that up because
SmartVestors, they do have the heart of a teacher.
- Yes.
- That means they want to help you.
- That's right.
- They're not trying to sell you stuff.
So if you have questions, ask them.
I promise you, they're not judging you.
They're there to help you.
- Absolutely.
Alright Julia said, how often should I check my investments?
Once a year or more often?
- Well I think anytime you're looking at your situation,
you want to check investments every time that statement
comes in the mail.
You should be getting something from your 401K or 403B
each and every month.
Take a look at it, but Rachel,
I want people to hear me.
Don't freak out, right.
Investing is like riding a roller coaster, right.
Do you ride roller coasters?
- I love roller coasters.
- Do you sit up front?
- I went to Disney World recently, Chris Hogan.
- Okay, did you sit up front?
- I did on Space Mountain, legitimately,
they put me in the very front.
- I'm not sitting up front, I sit in the back.
I need some time, yeah. I need some cushioning.
- No, you gotta get right up there.
- I need to be able to watch.
- Gotta get right in the game.
- But listen, investing is like riding a roller coaster.
There's going to be some ups and downs.
- Yes.
- But here's the deal, when you're riding
a roller coaster, as long as you have your seat belt on,
you know everything is going to be okay.
- We hope so.
- So my reality is, is investing is a lot like that.
But when you have a SmartVestor Pro in your corner,
and you're investing in things that you understand,
you can relax.
- That's good.
- Right? And take a deep breath.
So look at it each and every month,
but I want you to meet with your investment professional
at least quarterly.
And if you're married, you and your spouse
need to go in for that meeting.
So we're talking about getting on the same page
and any questions that need to be answered
get answered in front of both of you.
- I love it. So Cory asks,
how do I even start? I'm a few months away
from completing baby step three
and don't have a clue where to start
or even how much to start with.
- Uh, this is fantastic.
So this is somebody that has paid off debt,
right? So congratulations to you.
- Yay Cory, good job.
- I'm very proud of you.
Seriously, that's a big deal.
- It is, it's a huge deal.
- And people need to be encouraged.
I love that you do that on your show.
You've done a great job.
What I want you to do is take steps now
to start to prepare for your future.
So that could mean if you're working,
you could start to put that money aside in your 401K.
If their employer has a match, which means they will match
how much you put away up to a certain percentage.
- Yep.
- Right, and if there is no match,
then let's put that money in,
and then as you start to grow and you gain more income,
you have an opportunity to use the 410K,
but also don't forget about Roth.
- Yes, Roth IRA.
- Rachel, Roth is my friend.
- Me too.
- I may name my dog Roth.
You know why?
Because you're talking about tax free money.
Right, you've already paid the taxes on it.
This money is going to grow and the government
can't touch it anymore.
- That's right. Alright Danielle asks,
how should I do retirement investing as a stay at home mom?
15% of zero is still zero, smiley face.
So is it 15% of my husband's paycheck?
Should my husband and I put a higher percentage
of our money into his 401K at his job?
Is there a better option than a 401K?
- Okay first and foremost, your job being at home
is a very, very important job.
You allow your husband to be able to work
and do what he needs to do.
So Rachel the first thing I'd want her to do
is start to use a better pronoun.
We, right, she's saying his and my.
No, it's we, together.
And so sitting down.
- I quote you all the time,
I say my friend Chris Hogan says,
"We need to be more French."
- That's exactly right.
- Speak we, not me.
- That's right.
- I'm proud you give me credit.
- I do, I do quote you.
- I figured you'd steal it.
- Whatever, I'm a giver, I'm a giver, not a taker.
- But listen, but listen, it's so important
to be able to really know that
you're working a plan together.
- Yes.
- And so the 401K and them going to sit down
with a SmartVestor Pro, they both need to go,
husband and wife.
- Yep.
- Right, because this is their money.
This is their thing.
But here's another thing that can happen.
Because they are, he's working and there's income
and they're filing taxes together,
they could also sign up for a Spousal Roth IRA.
She could have this account in her name,
and that might make her feel better,
even though it's all for the family.
People want to know what they're doing.
But here's another beautiful thing,
if she's doing a side job or she's doing anything else,
she could also direct that money to a Roth IRA
to allow her to save.
So the biggest thing for this is,
if they're saving in a 401K together,
this is their money.
This is the family money.
- That's right.
- So they both need to be involved
in the meeting with the SmartVestor.
And they need tweaks moving forward.
- Okay and something else I see stay at homes moms skip
is life insurance.
Moms out there, even dads, but especially
you stay at home moms, make sure you have life insurance.
I always like to tell stay at home moms,
at least half a million dollars on you.
Because if something happens to you,
your family has to be taken care of.
So make sure to go to zander.com,
check it out.
Winston and I use Zander, but again,
I see a lot of stay at home moms,
they're like, "Oh no, I don't need life insurance."
I'm like, no, the work you do at home,
like you said, it's so important.
- Absolutely.
- And your husband has to fund that if something
happens to you, so make sure you get it.
Do y'all use Zander?
- Absolutely, listen, your job as a
stay at home parent has value.
- Yes.
- And that's stay at home moms and stay at home dads
if they're out there.
- Amen, that's right.
- So you definitely want to have that in place
because guess what? Life is going to have to go on.
You're going to have bills.
You're going to have things you're going to need to pay for.
Let's make sure you've got some money put aside.
Term life insurance with Zander.
- Yes.
- They'll help you out and they'll walk you through
any questions you have.
- That's exactly right.
Okay, last question.
Sara said, where is the best place to start learning
about investing?
Any good books to start with?
I have a horrible financial background
and know nothing about investing.
We're in baby step two and I am a planner.
I want to start doing research now.
- Well I love that you want to learn.
And I'd say you could start off with the book,
The Total Money Makeover.
You know, that is the book, Dave's book,
it's the number one best seller.
And it really starts to break down
kind of the principles.
And there's another book out there, Rachel,
that I've heard about.
- Oh, Love Your Life Not Theirs? What is it?
- No, it's called Retire Inspired.
It is a book that helps people chase down their dreams.
- It is good.
- And go after things they're going for.
- It is good though, yes.
- It is, but no seriously.
- Retire Inspired is all about all of this investing stuff.
- And I have a show, Chris Hogan Show.
- Okay, go ahead.
- Where people are allowed to call in.
I take callers because I love people.
And I want them to be able to ask me questions.
- I go with a Facebook community.
- And I want to be able to talk with them.
But no, listen, there's an opportunity to grow in knowledge.
- That's right, that's right.
- And I think it's really important for us
when we don't understand something,
we tend to stay to ourselves.
- Yes.
- That's dangerous.
- It is, yep.
- So reach out.
And listen our team has all kinds of resources.
Your show, my show, it's an opportunity out there to learn.
And so I just encourage you, get plugged in.
Talk to people, have a conversation.
And don't ever feel like your question is dumb.
- That's right.
- Because there's no such thing.
- People need answers and that's what we do.
We help them.
- And again, we're honing on this you guys,
but it is, it's so critical because investing again,
it can be an intimidating topic,
just like she asked.
So find someone that does this day in and day out.
Those are our SmartVestor Pros.
Check them out and start on the road to investing.
So you can become...
- A millionaire.
- Oh, we didn't even plan that, that's pretty good.
(upbeat music)