Dave Ramsey says this is what keeps Americans in the middle class — explains how 1 crucial decision can prevent families from ever getting rich in the US. Are you making the same mistake?

At least, that is what he told Micah, 24, from Washington, DC, when the military man called in during the episode looking for financial advice regarding a potential car purchase.

Micah said he earns $80,000 a year. He already owns a car worth $13,000, but is tempted to purchase a new sports car — a Nissan 370Z — for $30,000 in cash. He admitted this is purely an indulgence and that the new car would be for “play.”

However, he called Ramsey to find out if he should invest the money instead of splurging on a vehicle.

Ramsey let him in on a little secret.

Middle class indicator

Ramsey’s advice was simple: say no to the second car. As for his reasoning, the finance guru pointed to something he’s noticed over the years: “The way you know someone is going to stay middle class is when they have two very nice cars — that are obvious [sic] $500, $600, or $700 payments — sitting in front of a middle class house,” he said. “100%, those people are going to stay middle class.”

In some instances, America’s obsession with automobiles may have prevented many families from accumulating wealth. At the end of 2023, U.S. households collectively had $1.61 trillion in auto loan debt, just slightly higher than the $1.6 trillion in student loan debt outstanding, according to the New York Federal Reserve.

The average consumer had $23,792 in outstanding auto loans last year, according to Experian data, which was up 5.2% from 2022.

Unlike a college degree or a house, vehicles do not boost income or deliver capital gains. Instead, vehicles rapidly depreciate in value over time, especially if they’re purchased brand new. “[New cars] lose 60% of their value in just five years,” co-host George Kamel added.