Dave Ramsey explains why get-rich-quick schemes fail. People chase them anyway because our brains are wired to overestimate unlikely wins. The odds are terrible, but the fantasy of instant wealth overrides logic.
Our brains are wired by God for efficiency. You know, we want to burn the least calories possible to get the job done, whatever it is, which in the financial world causes us to look at, get rich quick. And we don't think of it as stupid. I didn't think of it as stupid when I did it in the 80s and you know, I started with nothing, had $4 million worth of real estate, lost everything because I borrowed too much money on the real estate and crashed my own life down on my head. I didn't think I was being foolish, foolhardy, impulsive. I thought I was burning the least calories to get to the goal. Yeah, you were being smart. I thought, I thought this is the way to go. And people that are buying crypto, that's what they think. I mean, no one thinks they're gambling. They don't think, oh, this has worse odds than a roulette wheel, which it actually did mathematically, you know, but, but they didn't think that. They thought this is the least calories to burn to get to the goal. So, so that's just the human brain doing what it's supposed to do. We're just efficiency experts all the time in everything we do. What's the least effort to get to the goal?
How, how often does someone, when they know like, hey, this is a big risk investment, this the chances are of you making, you know, 10x on your return in one year or six months is so slim, or 100x returns in two years is so slim. But why do people sometimes go all in on the money they have or 90% of their money on things that have a 1% chance of actually getting more than a double return within a year?
Well, there's two reasons. One is they don't believe. There's only a 1% chance they believe. Again, it's the most efficient way to get there. I didn't think that there was a high probability I was going to fail doing nothing down real estate. I did not. It never occurred to me, number one. And then number two, pride comes right before the fall. There's an arrogance. I, I, I was smart. I understood that that debt knocked over some people. I understood that sometimes people got in trouble. But I thought, oh, I can do this. I, I'm smart enough, 26 years of.
Your wisdom, you could do this right.
Man, after 24 and a half years and, and a college degree in real estate, by God, I can do this, you know, and there was that in there, that arrogant little twerp, you know, he was there. And so there's a combination of this pride and that then leads you to. Again, these principles that lead you to bad tactics or principles that lead you to good tactics. Yes. And the principle was a bad principle that I was functioning in, and, you know, just put a little icing on the cake of a little pride, a little arrogance that says, oh, yeah, I know. I know that for that guy, but I'm really good at math, and I grew up in the real estate business, and I know, I know things.
Just.
Just ask me, you know, and. And that. You see this, you can actually see that dripping off of some of the stuff that's posted on the Get Rich Quick stuff.
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