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by Christy Bieber | Published on Oct. 5, 2022
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Ramsey's answer may surprise you.
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When it comes to building wealth, there are many techniques you can try and tips you can implement. But, according to finance expert Dave Ramsey, you have one wealth-building tool that stands above all others.
According to Ramsey, there’s one tool you absolutely must make effective use of if you want to build wealth: your income. 
“Your income is your greatest wealth-building tool,” Ramsey has repeatedly said, including on the Ramsey Solutions blog as well as on Facebook.  

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Ramsey believes that if you use your income wisely by investing 15% of it, you can build the financial security that you deserve and perhaps even become a millionaire one day. 
“There’s no secret trick or magic formula when it comes to investing — if you invest every month, it will add up, Ramsey promised. “In fact, about 80% of millionaires consistently invested in their employer-sponsored retirement plans — aka their 401(k). It may sound boring, but it works.” 
So, if your income is your greatest wealth building tool, how can you use it to actually become rich? For Ramsey, it’s simple: Pay off debt ASAP so you aren’t squandering your most valuable resource and then use your money wisely. 
“The best thing you can do for your financial future is ditch your debt so you can free up your income and start building wealth faster,” Ramsey said. 
Ramsey is so convinced that debt will prevent you from using your income as an effective tool that he suggests focusing on becoming debt-free even before saving for retirement — even if that means you have to delay your efforts to invest for several years.
He advises getting intense about debt payoff, pausing all other money goals except for saving a $1,000 emergency fund prior to sending all of your extra money to creditors. If you follow Ramsey’s plan, only after you are debt-free (except your mortgage) will you begin investing the recommended 15%. 
Ramsey is right that your income is your greatest wealth-building tool. The way you use your hard-earned money is going to determine whether you become rich or at least financially secure. After all, no matter how much you make, if you overspend on vacations and frivolous purchases, you aren’t going to end up with a hefty nest egg that can support you in your later years and serve as your legacy after you are gone. 
Ramsey is also right that paying interest usually isn’t the best use of this valuable tool. However, there are some exceptions such as low interest debt (like a mortgage) because you can earn better returns with safer investments than the return on investment (ROI) that comes with early mortgage payoff. 
You may not necessarily want to follow his advice to wait to begin investing though — especially if doing so would mean missing out on an employer match in your 401(k). In order to truly make the most of your important wealth-building tool, you should make a careful plan for what to do with your income that takes into account retirement tax breaks, any 401(k) matching funds, the interest rate on your debt, the benefits of compound growth when you invest early, and the length of time debt payoff will take you. 
For most people, investing and paying off debt simultaneously is the best use of your income. However, your personal situation will dictate whether that’s the case for you so take the time to make an informed choice. You’ll end up better off for it because you’ll be putting your greatest wealth-building tool to the best use.

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Christy Bieber is a personal finance and legal writer with more than a decade of experience. Her work has been featured on major outlets including MSN Money, CNBC, and USA Today.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
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