Dave Ramsey’s Baby Step 7: Build Wealth and Give

by Joe Plemon on November 30, 2009

Creative Commons License photo credit: db*photography

Congratulations! When you reach Baby Step 7 you have come a long way. All of your debt is gone, including your house mortgage. You have a great emergency fund, your children’s college is well funded and the positive cash flow you used to accomplish the previous steps is still flowing. Only 2% of Americans reach this pinnacle.

A somber quote from Dave: “If you think wealth will answer all of your questions and make you trouble-free, you are delusional. I have had wealth twice in my life, and I don’t find it to be trouble-free; as a matter of fact, most of the troubles have zeros on them. Wealth is not an escape mechanism; it is a tremendous responsibility.”

Responsibility noted, this is also a time to experience one of Dave’s favorite sayings, “If you live like no one else, later you can live like no one else.” But what does “living like no one else” actually mean? Dave says that we can do three things with money: have fun with it, invest it or give it away.


Some people, over a lifetime, develop such frugal habits that even when they can easily afford to have fun they don’t. This mindset needs to be changed. Sure, there was once a time when you and your spouse opted not to take that coveted European vacation, not because doing so was wrong but because you couldn’t afford it. Good choice at the time, but today, if you can afford it, do it! Have fun and live like no one else.


You have been investing for years, so now is not the time to quit. Whether working with a traditional brokerage or one such as Zecco Trading (which offers commission free trades), Dave recommends staying with simple mutual funds and paid for real estate. You may want to go to more sophisticated investments if you have more than $10 million, but Dave likes simplicity because you don’t want to clutter your life with unnecessary stress that often comes with overly complex investments. And while it is good to surround yourself with a team of people who are smarter than you are, you should always manage your own money. How do you know they are smarter? They can explain complex issues in ways you can understand.


According to Dave, if you miss this one, you miss everything. Having fun is great, but all golf or all travel can become mundane and void of true meaning. Investing is a good thing, but if it is the center of your life you will become self consumed with your net worth. Giving is the key not only to what you should be doing with your wealth, but to true happiness itself. “The Great Misunderstanding” in life is that we gain by keeping what we have earned. Not true: true gain comes when we give.

Dave shares these quotes on wealth and generosity:

“There are men who gain only from their wealth the fear of losing it.” Antoine Riveroli

“Surplus wealth is a sacred trust to be managed for the good of others.” Andrew Carnegie

“No one would remember the Good Samaritan if he hadn’t had money.” Margaret Thatcher

When you reach Baby Step 7 you come to a critical stage of life.  Hopefully, you have been generous throughout your life, but it has been difficult to give much simply because you haven’t had much. Now you do. And now is the time to give more than you ever dreamed possible. Now is the time when all of your sacrifices through the thin years will start paying you dividends. And now is the time to share those dividends. Have fun with it. Buy that struggling single mother a car. Provide a scholarship for students who can use a hand up. Give your waitress a $100 or $1000 tip. Your generosity will be your gain…think Ebenezer Scrooge after his night of visitations.

Your life is headed for some great adventures. It is time to live like no one else!


{ 3 comments… read them below or add one }

FinancialBondage February 5, 2010 at 2:03 pm

sure wish I was on this step. someday perhaps. I am on step 2, hoping to get on step 3 sometime in 2010. I’ve been on BS 2 for about 5 years.


joeplemon February 5, 2010 at 3:16 pm

Financial Bondage,
I have heard it said that the important thing is not so much where you are on the journey, but the fact that you are indeed on the journey. Everyone who gets to Step 7 was on Step 2 at some time in their life (unless they never had any debt).

It sounds like you will complete Step 2 this year. Fantastic!! You are definitely going the right direction. Let me know when you finish
Step 2 and we will celebrate together!


joeplemon May 21, 2010 at 10:59 am

I am honored! Don’t be a stranger.


Leave a Comment

{ 1 trackback }

Previous post:

Next post: