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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: mindaugas on August 05, 2016, 09:14:42 AM

Title: Is Dave Ramsey a bad word here?
Post by: mindaugas on August 05, 2016, 09:14:42 AM
I started with MMM around 2011 which helped us buy our first house, reno it with cash, then sold and moved into a larger home when my wife and I started breeding. 3 kids under 4 later and the credit cards all had balances, 2 new 2015 cars, and the bike was hanging idly in the garage. We were never under water or without savings. But everything MMM and these forums taught us had been thrown out the window. I was so afraid of a palm to the face I wouldn't even click on the new blogs or visit these forums, I was certain MMM could smell my debt debauchery. Then I heard Dave Ramsey. At first I dismissed what he was saying because I didn't think I could pray my debts away. I refused to buy his books or myriad of services he endorsed. But I was missing the point. MMM has endorsements, ads, etc. And I'm not the kind of person that is offended by someone else's religious beliefs. Anyway, something clicked or sunk in and I bought one of his books and then got sucked into the baby steps. I was hearkened back to MMM when he used descriptions like "the house is on fire" or "you need to be on a rice and beans diet". So here I am trudging through baby step 2, I drank the kool-aid. 

tl;dr: I know DR isn't well loved here. I'm wondering why?
Title: Re: Is Dave Ramsey a bad word here?
Post by: boarder42 on August 05, 2016, 09:18:39 AM
hes a good first step.  but a lot of his recommendations are for emotional gains vs the best financial solution.  i dont think he's hated there are many who end up here after using his steps to get back on track.  but to pay down the smallest loan balance first regardless of the interest rate just to get an emotional "gain" is ass backwards for my mathmatical mind but if it work for you it works.
Title: Re: Is Dave Ramsey a bad word here?
Post by: BigHaus89 on August 05, 2016, 09:20:01 AM
His financial advice is a little too basic and does not follow the math as it does in the MMM community. Nothing wrong with his advice, but MMM readers seem to strive for a more optimal/efficient approach.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Ann on August 05, 2016, 09:28:32 AM
I would say Ramsey is a great beginning and over all a decent personal finance guy.  He's not a FIRE guy, though, and maybe that's why you don't hear much about him on MMM?  The FIRE community also seems to strongly overlap with environmental responsibility, which Dave doesn't highlight at all.  And, yes, his religious ties are off-putting to some(many?).
Title: Re: Is Dave Ramsey a bad word here?
Post by: SwordGuy on August 05, 2016, 09:32:24 AM
I think Dave Ramsey is absolutely great at getting people motivated to change their behavior for the better. 

As for the debt snowball (smallest debt first) being less effective than paying off the highest interest rates first, that totally depends.

First of all, it depends on whether it will actually get done using the highest rate first.  Because if the person isn't motivated to change, they won't change, and they'll stay in debt.

Secondly, it's not that big a difference in dollar terms between the two.    In most of the debt scenarios I've seen, the difference was no more than 4 months in time.   

Third, people who are way in debt often don't have any wiggle room in their budget.  Paying off some small debts first gives that wiggle room.   That reduces stress and stress can make you sick, which can lead to doctor's bills and lost work.

Where I do NOT NOT NOT NOT like Dave Ramsey is in his investing advice.  I think he sold out as I've seen advice to buy expensive front-loaded mutual funds with high fees.   I would not be surprised to find out he's getting a cut.  It's bad advice.  Vanguard or other low fee funds are better.
Title: Re: Is Dave Ramsey a bad word here?
Post by: rubybeth on August 05, 2016, 09:33:29 AM
DR is how my husband and I got started with some of the more advanced financial stuff. I got bored with it after we were getting really close to paying off our debt. It kind of felt like, "Now what?" We don't have a house or kids, so the steps didn't really fit with our goals. So instead of Baby Step 4 (invest 15%), we just started investing as much as we could and started our stash. For me, Dave doesn't get specific enough about investing, and even MMM's advice is pretty basic, so I did my own reading. I think anything that gets you interested in budgeting and knowing more about money is a good thing.
Title: Re: Is Dave Ramsey a bad word here?
Post by: MrsDinero on August 05, 2016, 09:50:08 AM
I don't think so.  I started with Dave Ramsey long before I discovered MMM.  It was a great starting point for me because I learned the basic of budgeting and snowballing my debt.  I don't think 10-years-ago-Me would have been able to handle what MMM was saying/doing.
Title: Re: Is Dave Ramsey a bad word here?
Post by: boarder42 on August 05, 2016, 09:53:26 AM
i do however think its crazy you found this in 2011 and have 2 new 2015 SUVs ...  i mean cmon now. you found the holy grail and started down a good path and then pissed in it and drank it.
Title: Re: Is Dave Ramsey a bad word here?
Post by: oldladystache on August 05, 2016, 10:18:17 AM
I've been hearing promos for his radio show in which he says anyone with a high credit score got it by paying thousands of dollars in interest. Absolutely not true. So he lies.
Title: Re: Is Dave Ramsey a bad word here?
Post by: ketchup on August 05, 2016, 10:21:25 AM
Dave Ramsey can be a good "wake up call" to some people to begin getting their shit together.

But from the perspective of many advanced Mustachians, plenty of his advice dumb, misguided, or dangerous.  I know his investment advice is horrific, and he takes debt-is-intrinsically-evil stance pretty strongly (but to his credit that's what many need to hear). 

Also, plenty of people get rubbed the wrong way by him selling courses/etc. And the Christy shit is a turnoff for many as well.
I've been hearing promos for his radio show in which he says anyone with a high credit score got it by paying thousands of dollars in interest. Absolutely not true. So he lies.
Yeah that's just flat-out wrong.  I can't believe an "expert" would say something like that.

EDIT: Looks like he also advocates an 8% withdrawal rate in retirement?  What the hell?
Title: Re: Is Dave Ramsey a bad word here?
Post by: Zikoris on August 05, 2016, 10:22:20 AM
His math sucks, and he gives bad investment advice. I suppose he's okay for clueless people who really need things dumbed down though.
Title: Re: Is Dave Ramsey a bad word here?
Post by: mindaugas on August 05, 2016, 10:25:38 AM
i do however think its crazy you found this in 2011 and have 2 new 2015 SUVs ...  i mean cmon now. you found the holy grail and started down a good path and then pissed in it and drank it.

Exactly. Sometimes I slap my face 5 times a day, with bricks. I have another confession, one of the 2015's is a lease.

I'm selling one of them though, inspection is next week to put it on Beepi.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Playing with Fire UK on August 05, 2016, 10:26:32 AM
Where I do NOT NOT NOT NOT like Dave Ramsey is in his investing advice.  I think he sold out as I've seen advice to buy expensive front-loaded mutual funds with high fees.   I would not be surprised to find out he's getting a cut.  It's bad advice.  Vanguard or other low fee funds are better.
+1

His network of sales people make him a fortune. 8% is crazy talking.

And then when he tries to defend it because "they'll get better results" it makes my head spin. I dislike that any talk of using a mortgage or 0% debt strategically or paying off high interest debt first is just waved away like "You can't be trusted to do that".

Not everything he says is bad; but I worry for people who think that because he talks about Jesus his word is the Gospel.

"Dave Ramsey says ..." is not a coherent argument.

"You must do ... because Dave Ramsey ..." IS a dirty phrase and should never be uttered in these halls.
Title: Re: Is Dave Ramsey a bad word here?
Post by: gggggg on August 05, 2016, 10:30:48 AM
I love Dave, and still listen to him every day. He is more for the folks in the earlier stages of the personal finance game, like others have said. His baby steps are a great foundation for building your empire. I don't use his investing advice (step 7); this is where I part ways with him. His religious affiliation doesn't bother me, just ignore it if you want. As far as his "pay the smallest debt first" instruction: I agree with him. The folks in over their heads are lost, and need the mental boost of the snowball, imo.
Title: Re: Is Dave Ramsey a bad word here?
Post by: mindaugas on August 05, 2016, 10:31:12 AM
Where I do NOT NOT NOT NOT like Dave Ramsey is in his investing advice.  I think he sold out as I've seen advice to buy expensive front-loaded mutual funds with high fees.   I would not be surprised to find out he's getting a cut.  It's bad advice.  Vanguard or other low fee funds are better.
+1

His network of sales people make him a fortune. 8% is crazy talking.

And then when he tries to defend it because "they'll get better results" it makes my head spin. I dislike that any talk of using a mortgage or 0% debt strategically or paying off high interest debt first is just waved away like "You can't be trusted to do that".

Not everything he says is bad; but I worry for people who think that because he talks about Jesus his word is the Gospel.

"Dave Ramsey says ..." is not a coherent argument.

"You must do ... because Dave Ramsey ..." IS a dirty phrase and should never be uttered in these halls.

I'm sure he is getting a cut. He has a multi-million dollar business built off of this. I don't think he pays all his employees and the rent on that building he broadcasts from with money from speaking engagements.

I haven't heard his specific investing advice, but I also haven't gotten that far in the book. I figured I would take his advice and stop with the baby step I am on, the debt snow ball. When it does come to investing I've read enough MMM and here to know low fees are the way to go and I already have an account with Vanguard.
Title: Re: Is Dave Ramsey a bad word here?
Post by: mindaugas on August 05, 2016, 10:33:31 AM
As far as his "pay the smallest debt first" instruction: I agree with him. The folks in over their heads are lost, and need the mental boost of the snowball, imo.

+1 and I think I see where everyone is coming from. But his advice has mass appeal. As much as I like the idea of the debt snowball, I'm not even strictly following it. I'm paying down the debt with the highest payment first to increase cash flow to hose down the next highest interest rate. Thank MMM for that. But at least it got me back on track.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Inaya on August 05, 2016, 10:36:48 AM
Where I do NOT NOT NOT NOT like Dave Ramsey is in his investing advice.  I think he sold out as I've seen advice to buy expensive front-loaded mutual funds with high fees.   I would not be surprised to find out he's getting a cut.  It's bad advice.  Vanguard or other low fee funds are better.
+1

His network of sales people make him a fortune. 8% is crazy talking.

And then when he tries to defend it because "they'll get better results" it makes my head spin. I dislike that any talk of using a mortgage or 0% debt strategically or paying off high interest debt first is just waved away like "You can't be trusted to do that".

Not everything he says is bad; but I worry for people who think that because he talks about Jesus his word is the Gospel.

"Dave Ramsey says ..." is not a coherent argument.

"You must do ... because Dave Ramsey ..." IS a dirty phrase and should never be uttered in these halls.
To be fair, there are some in these forums who take The Prophet MMM's word as Gospel as well. Fire and brimstone if you dare hire a housekeeper!
Title: Re: Is Dave Ramsey a bad word here?
Post by: ShoulderThingThatGoesUp on August 05, 2016, 10:52:04 AM
So what's your plan to not fall in the hole again? You knew buying (or leasing!) new SUVs was dumb and you did it anyways. How will you change your mindset and your family's mindset for the better?
Title: Re: Is Dave Ramsey a bad word here?
Post by: Playing with Fire UK on August 05, 2016, 11:10:37 AM
"Dave Ramsey says ..." is not a coherent argument.

"You must do ... because Dave Ramsey ..." IS a dirty phrase and should never be uttered in these halls.
To be fair, there are some in these forums who take The Prophet MMM's word as Gospel as well. Fire and brimstone if you dare hire a housekeeper!

Yep, they are both wrong in the same way.

Any argument based on 'this worked for one person so is the best and only solution for every person in the world under all circumstances' needs to be called out for the bullshit it is.
Title: Re: Is Dave Ramsey a bad word here?
Post by: mindaugas on August 05, 2016, 11:16:28 AM
So what's your plan to not fall in the hole again? You knew buying (or leasing!) new SUVs was dumb and you did it anyways. How will you change your mindset and your family's mindset for the better?

Hey, it's a minivan, not a SUV! :P

Good question though. I don't have a plan. Just a goal to be debt free. Probably so I can buy a boat and a new 5.0 Mustang, oh and I'll need a big truck to tow my new boat so that too. And the minivan will have 30,000 miles so I better trade that in for a new one and might as well get leather this time and the DVD player because Mickey Mouse is raising my kids.

Lot of tongue in cheek, but seriously good question. I should think about the plan. FIRE is so far away I can't even see it past the mountain of debt. But if I stick to my plan I could be looking at the distant blurry figure of FIRE in 2 years ... and then what, maybe 10 years to get enough stash for FIRE? I'd only be 46. I could still ride my bike and become a ninja warrior. And a 2015 5.0 Mustang in 2028 will probably only be $3,000 Trumpdollars.
Title: Re: Is Dave Ramsey a bad word here?
Post by: TheAnonOne on August 05, 2016, 11:17:11 AM
I started listening to him after being on MMM for 3 years. (I started listening to him a few weeks ago just to see other viewpoints)

I find the advice MAINLY childish, but it seem to help some people. I mean, going from being broke and in debt, to being debt free and investing in shitty investments is still an improvement!

Really, though, once you are in the Boggle/MMM/ERE world, Dave is really, not the best path.(mathematically)
Title: Re: Is Dave Ramsey a bad word here?
Post by: gaja on August 05, 2016, 11:44:10 AM
The big difference for me is the goal. For DR the goal is to become rich, so you can live the lifestyle and spend a lot of money. For MMM the goal is to find a sustainable lifestyle that you can enjoy for the rest of your life.

I think DR helps a lot of people in his babysteps 1-3. For the investment advice, I can't really get riled up because a) getting people to save in a bad product is better than them not saving at all, and b) I think he believes it.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Playing with Fire UK on August 05, 2016, 02:03:06 PM
b) I think he believes it.

I would believe it too if it was making me vast amounts of money.
Title: Re: Is Dave Ramsey a bad word here?
Post by: boarder42 on August 05, 2016, 02:05:04 PM
what is his investment advice?
Title: Re: Is Dave Ramsey a bad word here?
Post by: Zikoris on August 05, 2016, 02:40:56 PM
what is his investment advice?

https://www.daveramsey.com/blog/daves-investing-philosophy (https://www.daveramsey.com/blog/daves-investing-philosophy)

It's pretty bad.
Title: Re: Is Dave Ramsey a bad word here?
Post by: v8rx7guy on August 05, 2016, 02:49:21 PM
I too started with Dave Ramsey.  He was a great wake-up call and was the real reason I my wife and I actually started to budget and soon after paid off my student loan and credit cards within 2 years.  I know actually teach his "Financial Peace University" through my church... starting with a fresh group this September.  I think it's a great start for so many people that go thru my class, the change in thinking is dramatic.  I do think that his investment advice is a little bunk, with his 12% ROI promise and cookie cutter mutual fund allocations, but his advice is what it is and it does get people starting to save for retirement even though the fees might be high.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Uturn on August 05, 2016, 03:10:09 PM
I love his steps 1-3, then we diverge rapidly.  Why smallest debt first?   Because it's easier to see progress.   In everything else in life, we start small and easy.  We learn the fundamentals, then move on to more advanced skills.  We fuck up along the way, and I would rather fuck up small.   
Title: Re: Is Dave Ramsey a bad word here?
Post by: mindaugas on August 05, 2016, 03:19:46 PM
I love his steps 1-3, then we diverge rapidly.  Why smallest debt first?   Because it's easier to see progress.   In everything else in life, we start small and easy.  We learn the fundamentals, then move on to more advanced skills.  We fuck up along the way, and I would rather fuck up small.

I'm kind of in the same boat. idk if I want just $1k in savings though. I think I'd rather have the "fully funded" emergency fund, but I'm a nervous nelly.
Title: Re: Is Dave Ramsey a bad word here?
Post by: mindaugas on August 05, 2016, 03:30:55 PM
Listening to most of his calls, its mind boggling that these people made it through life. Some of the shit they do, buy, waste is beyond comprehension. For them, having a specific, simple and defined goal is key imo.

At least those people are seeking help. It boggles my mind when others are resistant to getting out of debt.
Title: Re: Is Dave Ramsey a bad word here?
Post by: jjcamembert on August 05, 2016, 04:32:09 PM
I read Dave Ramsey's book maybe 8 years ago. Even then as a kid out of college I didn't find it very insightful. And then when I saw, "after you pay off your house, then you'll have tons of money to give away" I thought, "Then why would I keep going to work?"
Title: Re: Is Dave Ramsey a bad word here?
Post by: SwordGuy on August 05, 2016, 06:43:44 PM
I like Ramsey a lot. I'm a fan 😃

As far as his step program, I think he had to simplify it to its easiest form in order to get the masses to comprehend it.

Listening to most of his calls, its mind boggling that these people made it through life. Some of the shit they do, buy, waste is beyond comprehension. For them, having a specific, simple and defined goal is key imo.


Remember, half of all people are dumber than average.

Title: Re: Is Dave Ramsey a bad word here?
Post by: Riff on August 05, 2016, 08:33:12 PM
Dave has a different target audience than those of us here.  Sure, his pay the smallest debt first doesn't make sense mathematically.  Whenever he has a caller question him about that, he replies that math isn't the problem, because if they were good at math, they wouldn't be in so much debt. 

I've noticed that people around here are pretty good at math.

Plus, Dave isn't an early retirement guru.  More of a do these things, retire comfortably at 65 kind of guru.
Title: Re: Is Dave Ramsey a bad word here?
Post by: pbkmaine on August 05, 2016, 09:29:27 PM
I think he's fine on debt and spending, but has absolutely no clue on investing.
Title: Re: Is Dave Ramsey a bad word here?
Post by: MissNancyPryor on August 05, 2016, 09:43:05 PM
I read Dave Ramsey's book maybe 8 years ago. Even then as a kid out of college I didn't find it very insightful. And then when I saw, "after you pay off your house, then you'll have tons of money to give away" I thought, "Then why would I keep going to work?"

This is one of the main things that turned me off on DR but for a different reason.  I am a Christian and generosity is a very important part of my belief.  DR as a Christian advocates for only being generous once one has accumulated a lot of money.  I believe one should be generous in any condition.  DH's advice rang hollow coming from a "Christian" perspective. 

MMM doesn't advocate being generous, at least not until you can afford it. But he isn't claiming to come from a faith position.  So it doesn't bother me.  Generosity is built into my FI plan. And always will be.

I read one DR book. And learned a little from the first couple baby steps.  But that's about it.  Didn't really get motivated to change until I started reading MMM.

Actually he is really big on the tithe and did so all the way through his own bankruptcy.  Sounds like a generous spirit to me.  True, the outrageous generosity is reserved for step 7 but giving up 10% off the top (even before the tax man takes his) is pretty serious stuff when working through the baby steps.   

I agree that DR is really geared toward those who are just about clueless with money and have gotten themselves way in over their heads; it is a good way to start.  I think we forget how many out there simply don't get it and are living the minimum payments lifestyle without much hope.  He does offer a very simplified path out for those who can't even comprehend the MMM model. 
Title: Re: Is Dave Ramsey a bad word here?
Post by: tonycar17 on August 06, 2016, 11:28:05 AM
I love Dave......disagree with some of what he says, specifically around the investing piece, but honestly, if I had not stumbled across him about 5-6 years ago, I would still be pissing away a ery good combined income and sitting with student loans that are 20 years old. 

His advice on debt elimination are spot on.  The reality is that most people are in debt because either 1)  they do not understand the math or 2) they cannot control themselves.  His advice provides a blueprint for folks to get traction and see progress - and that is what people that are less that financially savvy need in order to become successful.  It is what I needed at the time I came across him.  When my wife and I came across him, we were carrying a bunch of debt and had very little savings - neither Emergency Funds or Retirement.  Today.....no debt but the house, and a net worth of about 500K.  Now, things have REALLY accelerated since I started reading the MMM forums, but if I would not have had the foundation Dave provided, there is no way I would be where I am.

With that said, I will be able to entertain FIRE if that is what DW and I want to do, sometime in the next 7-10 years because of some of the principles I have picked up here.

Dave and MMM are just like anything else - take the good parts and leave the ones that do not align to your thought process, etc.  The two of them together for us has provided a machine that is allowing us to both build wealth and keep risk in check - we are actively paying down our mortgage and also saving at a 50%+ rate. 

TC
Title: Re: Is Dave Ramsey a bad word here?
Post by: TheStachery on August 06, 2016, 12:00:40 PM
I love Dave......disagree with some of what he says, specifically around the investing piece, but honestly, if I had not stumbled across him about 5-6 years ago, I would still be pissing away a ery good combined income and sitting with student loans that are 20 years old. 

His advice on debt elimination are spot on.  The reality is that most people are in debt because either 1)  they do not understand the math or 2) they cannot control themselves.  His advice provides a blueprint for folks to get traction and see progress - and that is what people that are less that financially savvy need in order to become successful.  It is what I needed at the time I came across him.  When my wife and I came across him, we were carrying a bunch of debt and had very little savings - neither Emergency Funds or Retirement.  Today.....no debt but the house, and a net worth of about 500K.  Now, things have REALLY accelerated since I started reading the MMM forums, but if I would not have had the foundation Dave provided, there is no way I would be where I am.

With that said, I will be able to entertain FIRE if that is what DW and I want to do, sometime in the next 7-10 years because of some of the principles I have picked up here.

Dave and MMM are just like anything else - take the good parts and leave the ones that do not align to your thought process, etc.  The two of them together for us has provided a machine that is allowing us to both build wealth and keep risk in check - we are actively paying down our mortgage and also saving at a 50%+ rate. 

TC

+1  I like Dave too for his candid talk.  I think he does people a real service to help people get out of debt.  In truth, he doesn't give investment advice and to my knowledge has never said a particular mutual fund.  He does say that he can find some with great returns, that more than make up for the cost.  he defers people to his ELPs or smartvestors, for advice.  It may very well be that he cannot do so over the air because of regulations. 

 
Title: Re: Is Dave Ramsey a bad word here?
Post by: Playing with Fire UK on August 07, 2016, 12:43:50 AM
The smartvestors and ELPs are making money for Dave.

I see that this is a personal thing, but I don't find it worthy or generous to tithe when you are going through a bankrupcy. When you are going bankrupt then you've borrowed money from someone on the promise that you'll give it back and you're breaking that promise. By tithing, you are 'giving' money that isn't yours to give, it belongs to your creditors, until they are paid back. It's only your tithe if it is your money to give.

Tithing during a brankrupy feels like taking money out of someone's wallet and then claiming it's okay because you've given the money away. 
Title: Re: Is Dave Ramsey a bad word here?
Post by: mustachepungoeshere on August 07, 2016, 01:59:48 AM
My path to this forum was GRS-DR-MMM.

GRS told us why. DR told us how (or rather, told us how in a very simplistic way that I could get across to my husband.) Then, once again, MMM told us why.

Without Dave Ramsey, we would not be in this position to be utilising the advice of MMM and this forum.

Agree with other forum members who said it was a good place to start but we got bored/'what's next' before being debt-free, as DINKs with no mortgage.
Title: Re: Is Dave Ramsey a bad word here?
Post by: kayvent on August 07, 2016, 05:07:37 AM
hes a good first step.  but a lot of his recommendations are for emotional gains vs the best financial solution.  i dont think he's hated there are many who end up here after using his steps to get back on track.  but to pay down the smallest loan balance first regardless of the interest rate just to get an emotional "gain" is ass backwards for my mathmatical mind but if it work for you it works.

I don't think snowballing is only an emotional gain. Not only does having debt have a cost, having debtors is costly. I can not speak from experience but I would imagine it would be horribly stressful to manage a dozen or more debtors; calls, coordinating which paycheque will be for which debt, tracking balances and due dates and minimal payments, etc... A person's time does have a value.

I also believe there is a silent assumption in the snowballing technique. It is who you owe money too. Thinking about the debts of my debtees, their smallest debts are very personal (friends, family) and their largest debts are to impersonal entities (government, bank, or credit card company). There is a social and visible benefit to paying off personal debts. Some people drowning in debt also feel like they are on an isolated island because they feel they have put a barrier between them and their friends/family due to trivially sized 'loans'.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Playing with Fire UK on August 07, 2016, 05:49:04 AM
... There is a social and visible benefit to paying off personal debts. Some people drowning in debt also feel like they are on an isolated island because they feel they have put a barrier between them and their friends/family due to trivially sized 'loans'.

I totally agree with the issues around friends and family loans, but does that change if they are for larger amounts? I'd be unimpressed if I'd lent someone a lot of money and they were paying off smaller debts to credit card companies first.

In the UK PF sites tend to differentiate between priority and non-priority debts. Priority debts tend to include those that can put you in prison (Council Tax, HMRC, TV Licence) and those that can make you homeless. I'd include loans to family in this category.
Title: Re: Is Dave Ramsey a bad word here?
Post by: boarder42 on August 07, 2016, 06:05:58 AM
hes a good first step.  but a lot of his recommendations are for emotional gains vs the best financial solution.  i dont think he's hated there are many who end up here after using his steps to get back on track.  but to pay down the smallest loan balance first regardless of the interest rate just to get an emotional "gain" is ass backwards for my mathmatical mind but if it work for you it works.

Seriously you're gonna go into an obscure situation of personal loans. Ok yeah pay those off first regardless of the interest but you built debt pay it off as efficiently as possible. Fuck the time commitment what are you really doing with your time that's so valuable you'd pay off a 0% loan for 5000 before a 10% loan @ 30k. Just another obscure example but thats awful.

I don't think snowballing is only an emotional gain. Not only does having debt have a cost, having debtors is costly. I can not speak from experience but I would imagine it would be horribly stressful to manage a dozen or more debtors; calls, coordinating which paycheque will be for which debt, tracking balances and due dates and minimal payments, etc... A person's time does have a value.

I also believe there is a silent assumption in the snowballing technique. It is who you owe money too. Thinking about the debts of my debtees, their smallest debts are very personal (friends, family) and their largest debts are to impersonal entities (government, bank, or credit card company). There is a social and visible benefit to paying off personal debts. Some people drowning in debt also feel like they are on an isolated island because they feel they have put a barrier between them and their friends/family due to trivially sized 'loans'.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Sofa King on August 07, 2016, 04:22:09 PM
I think Dave Ramsey is absolutely great at getting people motivated to change their behavior for the better. 




I concur!!!!
Title: Re: Is Dave Ramsey a bad word here?
Post by: whodidntante on August 07, 2016, 08:13:59 PM
It's the story
Of David Ramsey
Who got over leveraged on investment real estate
Now he says all debt is bad
And quotes the Bible
Overgeneralization from self

It's the story
Of 12% Equities
With four types of funds from ELPs
If you can't beat the market
You're a moron
Past performance FTW

The Davie Bunch
The Davie Bunch
That's the way
We became
The Davie Bunch
Title: Re: Is Dave Ramsey a bad word here?
Post by: TheStachery on August 08, 2016, 11:37:07 AM
One thing I forgot to mention is that I hate his credit card advice. I understand cutting them up for people in debt, but he swears by his debt card. (more on that in a minute)  I think it's just free money left on the table.  I'm not talking about churning, just paying for things with a cc you would normally pay for anyway and collecting the rewards.  He claims that by using a credit card you are apt to purchasing more per transaction.  I don't know bout y'all but i don't ever go into a store and say hmm, i'm going to impluse buy this because i'm putting it on a cc card.  if you have a budget(like YNAB classic), that can't happen without you knowing it.

Debit cards... 
Yes, they offer many of the same protections of a cc... but the further away my real cash is away from the merchant the better.  We never use our debt cards at a merchant.  We have used them at our banks ATM. (checking for skimmers of course) and we occasionally have to write a check, even writing a check make me nervous.
Title: Re: Is Dave Ramsey a bad word here?
Post by: boarder42 on August 08, 2016, 11:52:06 AM
One thing I forgot to mention is that I hate his credit card advice. I understand cutting them up for people in debt, but he swears by his debt card. (more on that in a minute)  I think it's just free money left on the table.  I'm not talking about churning, just paying for things with a cc you would normally pay for anyway and collecting the rewards.  He claims that by using a credit card you are apt to purchasing more per transaction.  I don't know bout y'all but i don't ever go into a store and say hmm, i'm going to impluse buy this because i'm putting it on a cc card.  if you have a budget(like YNAB classic), that can't happen without you knowing it.

Debit cards... 
Yes, they offer many of the same protections of a cc... but the further away my real cash is away from the merchant the better.  We never use our debt cards at a merchant.  We have used them at our banks ATM. (checking for skimmers of course) and we occasionally have to write a check, even writing a check make me nervous.

yes i'm in your camp on this but far too many americans cant use a credit card as they would use a debit card and see it as "free money" ...
Title: Re: Is Dave Ramsey a bad word here?
Post by: Jrr85 on August 08, 2016, 12:38:32 PM
He really is great if you understand his audience.  He basically is very successful at realizing that money management is mainly a behavioral/emotional issue for most people, and he's actually successful at tapping into people's emotions and getting them to make positive changes.  His advice is occasionally spectacularly wrong (or maybe more accurately, it's often spectacularly wrong but it's consistently wrong about the same few issues), but even with some bad advice mixed in, if you follow his program, it still results in you getting rich, just maybe more slowly than you would with better advice.  And for much of his audience, the alternative without Dave Ramsey is not to get rich more quickly, but to work until you or your body gives up, retire with lots of debt and no assets and live off social security. 
Title: Re: Is Dave Ramsey a bad word here?
Post by: DoubleNickels on August 08, 2016, 12:39:56 PM
I think that Dave Ramsey has one interest one interest alone:  Padding his bank accounts. Kudos to him:  He figured out how to mass market him fairly self-evident advice and make a buck.   Does he really care whether YOU get out of debt?  No.   Only to the extent that your success may lead to him being able to sell more.

I tend to like the advice as it is "sold" by folks like MMM and ERE: Knowledge, shared freely without any need to sell product to do so. Do they make money off of advertising, etc., from their blogs? Absolutely.  But...you and I don't have to buy anything to get the information freely.  DR doesn't work that way, and never will. 
Title: Re: Is Dave Ramsey a bad word here?
Post by: frugaliknowit on August 09, 2016, 02:02:43 PM
For me, Dave Ramseyism is a "menu religion".  I like some of it, disagree with some of it.

Disagreements:

No retirement investing while in debt, not even the match.
No using credit cards (I understand that on a very large scale, this is a good idea....).
No having a credit score (Stupid.  You pay more for insurance...you have to get a mortgage from a manual underwriter...)
25% growth, 25% international, 25% growth and income, etc. (all with loads...). 
Debt snowballing (if I had debt, I would "cascade" (highest interest rate first))
3 to 6 month emergency fund (too small for a single person household).
Assertion that you will (implied always) earn the very long term average historic return on equities

Agree with:

Having no debt
Buy used cars
Not owning real estate with someone you're not married to
Home costs being 25% or less of take home pay with 20% or more down with emergency fund in place

Title: Re: Is Dave Ramsey a bad word here?
Post by: libertarian4321 on August 09, 2016, 02:16:59 PM
what is his investment advice?

https://www.daveramsey.com/blog/daves-investing-philosophy (https://www.daveramsey.com/blog/daves-investing-philosophy)

It's pretty bad.

Among the nuggets of fine advice:

"Choose A shares (front end load) and funds"

OMFG!  Why?

But I think it's his Jihad (or Crusade?) against any credit card use, for anyone, at any time, that seems most ridiculous.
Title: Re: Is Dave Ramsey a bad word here?
Post by: asauer on August 09, 2016, 06:05:11 PM
I don't think it's bad.  I consider DR to be high school and MMM to be a graduate degree.  DR program helped us to change some behaviors and get out of debt.  Now MMM is helping us to pay off the mortgage and RE!
Title: Re: Is Dave Ramsey a bad word here?
Post by: TheStachery on August 10, 2016, 07:33:52 AM
For me, Dave Ramseyism is a "menu religion".  I like some of it, disagree with some of it.

Disagreements:

No retirement investing while in debt, not even the match.
No using credit cards (I understand that on a very large scale, this is a good idea....).
No having a credit score (Stupid.  You pay more for insurance...you have to get a mortgage from a manual underwriter...)
25% growth, 25% international, 25% growth and income, etc. (all with loads...). 
Debt snowballing (if I had debt, I would "cascade" (highest interest rate first))
3 to 6 month emergency fund (too small for a single person household).
Assertion that you will (implied always) earn the very long term average historic return on equities

Agree with:

Having no debt
Buy used cars
Not owning real estate with someone you're not married to
Home costs being 25% or less of take home pay with 20% or more down with emergency fund in place

I have no problem with the debt snowball.  Like DR says, if they were good with math, they won't be in debt in the first place.
Title: Re: Is Dave Ramsey a bad word here?
Post by: StarBright on August 10, 2016, 07:51:40 AM
My path to this forum was GRS-DR-MMM.

GRS told us why. DR told us how (or rather, told us how in a very simplistic way that I could get across to my husband.) Then, once again, MMM told us why.

Without Dave Ramsey, we would not be in this position to be utilising the advice of MMM and this forum.

Agree with other forum members who said it was a good place to start but we got bored/'what's next' before being debt-free, as DINKs with no mortgage.

My path too! and the funny thing is that I've always been frugal and a saver. so really I'm just looking for tips here and there. And while I like the MMM boards, the thing I really loved about the Ramsey boards was reading the successes of the people who were going from hair on fire to safe. It's fun to read about early retirement, but it doesn't pull my heartstrings in the way that someone putting their family on sound financial footing did :)
Title: Re: Is Dave Ramsey a bad word here?
Post by: RyanAtTanagra on August 10, 2016, 07:53:22 AM
I have no problem with the debt snowball.  Like DR says, if they were good with math, they won't be in debt in the first place.

I feel the same way about 'no using credit cards'.  If people looking to DR for help could control credit card use, they wouldn't be looking to DR for help.  So that rule makes sense to me.  I wish I could convince my mother to cancel all her CCs and just keep a cash buffer in her checking, she'd be in much better shape financially.

Sometimes people need to put restrictions in place, even if that means a less-than-optimal solution.

I think a 6-month emergency fund is more than enough.  I'd suggest less than that as finances improve.  Once you have goal-oriented savings (house or car), you don't even need an e-fund, as you can use that in a pinch.  Same if you have investments that are reasonably accessible.
Title: Re: Is Dave Ramsey a bad word here?
Post by: driftwood on August 10, 2016, 07:53:42 AM
For me, Dave Ramseyism is a "menu religion".  I like some of it, disagree with some of it.

Disagreements:
Debt snowballing (if I had debt, I would "cascade" (highest interest rate first))

I have no problem with the debt snowball.  Like DR says, if they were good with math, they won't be in debt in the first place.

My understanding of the Debt Snowball (based on listening to his show while driving to from various things when I used to live in AZ, then checking out the book) was that you can choose how to prioritize which debts you pay first.  What made it a "Snowball" was that once a debt was paid off, you immediately took the money going to that debt and applied it to the next debt.  You'd continue that pattern until all debts were paid. I remember him stating that each person had to decide for themselves... going for the smallest might be the most motivating, going for the highest interest rate the most mathematically sound.

If he's shifted to advising everyone to go for the smallest debt for the biggest emotional motivator then I agree that it's not the best advice.

Even after I paid my debts USAA kept the $0.00 balance visible for months afteword (they told me it was a requirement and they couldn't remove them early) and it annoyed me.  I worked hard for those zeros, corrected the mistakes of my past and I wanted those debts to not just reach $0.00 but to disappear.
Title: Re: Is Dave Ramsey a bad word here?
Post by: TheStachery on August 10, 2016, 08:02:28 AM
For me, Dave Ramseyism is a "menu religion".  I like some of it, disagree with some of it.

Disagreements:
Debt snowballing (if I had debt, I would "cascade" (highest interest rate first))

I have no problem with the debt snowball.  Like DR says, if they were good with math, they won't be in debt in the first place.

My understanding of the Debt Snowball (based on listening to his show while driving to from various things when I used to live in AZ, then checking out the book) was that you can choose how to prioritize which debts you pay first.  What made it a "Snowball" was that once a debt was paid off, you immediately took the money going to that debt and applied it to the next debt.  You'd continue that pattern until all debts were paid. I remember him stating that each person had to decide for themselves... going for the smallest might be the most motivating, going for the highest interest rate the most mathematically sound.

If he's shifted to advising everyone to go for the smallest debt for the biggest emotional motivator then I agree that it's not the best advice.

Even after I paid my debts USAA kept the $0.00 balance visible for months afteword (they told me it was a requirement and they couldn't remove them early) and it annoyed me.  I worked hard for those zeros, corrected the mistakes of my past and I wanted those debts to not just reach $0.00 but to disappear.

From the DR website:

List all debts but the house in order. The smallest balance should be your number one priority. Don't worry about interest rates unless two debts have similar payoffs. If that's the case, then list the higher interest rate debt first.

This step will make a huge difference in your everyday life. You'll use the debt snowball to knock out your debts one by one, from smallest to largest. Pay off the first one. Then add what you were paying on it to the next debt and start attacking it. When you start knocking off the easier debts, you'll see results and stay motivated to dump your debt. As each debt is paid off, your cash flow will increase and the bigger debts will be gone sooner than you think. Before you know it, you're debt-free!

Title: Re: Is Dave Ramsey a bad word here?
Post by: MVal on August 10, 2016, 08:20:20 AM
His financial advice is a little too basic and does not follow the math as it does in the MMM community. Nothing wrong with his advice, but MMM readers seem to strive for a more optimal/efficient approach.

This is it in a nutshell, totally.

His advice strikes me as being for people who would be put off by the "badassity" recommendations of MMM. Our little cult here feels more like an alternative lifestyle while Dave Ramsey seems to fit better for those with a more main stream mindset, or need badassity spoon-fed to them in tiny doses because they're so ingrained in their typical American lifestyle. Dave Ramsey is great for getting weaned off a lifetime of financial unconsciousness, but I think MMM is the next level.

I really don't like the way he seems to be against early retirement. He seems to be of the belief that one should work to a more tradition retirement age because if you're not working, you're not being "useful." Maybe he's drawing some biblical conclusion there, but as a Christian myself, I don't think the biblical mandate, "To him who does not work, let him also not eat," means you have to work a traditional job until you're ancient. If you've already worked and made your money for life and invested it well (like the parable of the talents), then you're supporting your own existence regardless of what other labors you undertake.  Rather than recommending people save 50%+ of their income like MMM does, he seems to emphasize a more conservative (but still radical to the non or recently converted) level like 10-15%, or whatever will get you a million dollars from age 25 to 65. MMM seems directed more to discovering how to build what you need to live only the most basic life and believing that is more satisfying than simply trying to live debt free and work to old age so you can maintain your current lifestyle.
Title: Re: Is Dave Ramsey a bad word here?
Post by: v8rx7guy on August 10, 2016, 08:21:03 AM
I think that Dave Ramsey has one interest one interest alone:  Padding his bank accounts. Kudos to him:  He figured out how to mass market him fairly self-evident advice and make a buck.   Does he really care whether YOU get out of debt?  No.   Only to the extent that your success may lead to him being able to sell more.

I tend to like the advice as it is "sold" by folks like MMM and ERE: Knowledge, shared freely without any need to sell product to do so. Do they make money off of advertising, etc., from their blogs? Absolutely.  But...you and I don't have to buy anything to get the information freely.  DR doesn't work that way, and never will.

FYI, according to an interview, Mr MMM makes $400K/yr with his blog.
Title: Re: Is Dave Ramsey a bad word here?
Post by: MVal on August 10, 2016, 08:37:23 AM
I think that Dave Ramsey has one interest one interest alone:  Padding his bank accounts. Kudos to him:  He figured out how to mass market him fairly self-evident advice and make a buck.   Does he really care whether YOU get out of debt?  No.   Only to the extent that your success may lead to him being able to sell more.

I tend to like the advice as it is "sold" by folks like MMM and ERE: Knowledge, shared freely without any need to sell product to do so. Do they make money off of advertising, etc., from their blogs? Absolutely.  But...you and I don't have to buy anything to get the information freely.  DR doesn't work that way, and never will.

FYI, according to an interview, Mr MMM makes $400K/yr with his blog.

Dave Ramsey might be sincere, but yes, the bottom line is he is a business man. He runs his advice mill like a business, has a host of employees and is in the same realm as Suzie Orman. I do like that MMM is just geared to spreading free, common sense advice and if he happens to make money from that, great.
Title: Re: Is Dave Ramsey a bad word here?
Post by: driftwood on August 10, 2016, 09:00:17 AM
I think that Dave Ramsey has one interest one interest alone:  Padding his bank accounts. Kudos to him:  He figured out how to mass market him fairly self-evident advice and make a buck.   Does he really care whether YOU get out of debt?  No.   Only to the extent that your success may lead to him being able to sell more.

I tend to like the advice as it is "sold" by folks like MMM and ERE: Knowledge, shared freely without any need to sell product to do so. Do they make money off of advertising, etc., from their blogs? Absolutely.  But...you and I don't have to buy anything to get the information freely.  DR doesn't work that way, and never will.

FYI, according to an interview, Mr MMM makes $400K/yr with his blog.

Dave Ramsey might be sincere, but yes, the bottom line is he is a business man. He runs his advice mill like a business, has a host of employees and is in the same realm as Suzie Orman. I do like that MMM is just geared to spreading free, common sense advice and if he happens to make money from that, great.

Not defending him, but I used his advice for free.  Thanks to the radio show. The book (I got from the library) just repeated the same basic plan. 
Title: Re: Is Dave Ramsey a bad word here?
Post by: TheStachery on August 10, 2016, 09:55:18 AM
DR revenue streams i can think of:
Books
Books from other Dave Ramsey Solutions personalities
Financial Peace University - Kits he sells to churches and schools
Endorsements of products
ELP/Smartvestor referrals
Radio syndication money
personally he owns properties too.
Title: Re: Is Dave Ramsey a bad word here?
Post by: ender on August 10, 2016, 09:29:22 PM
Most people would be better off if they blindly follow every single piece of his advice.

Sure, they could be better off picking and choosing what to follow. But regardless, a large percentage of people would be in a way better place following his advice 100% verbatim, both short and long term.
Title: Re: Is Dave Ramsey a bad word here?
Post by: jengod on August 11, 2016, 02:41:07 AM
Love Dave Ramsey and don't think any of his revenue streams are in any way immoral or deceptive. He's a businessman and he offers an array of products that align with his stated mission and principles.

I listen to his podcast every single day while doing housework and even though we are on Baby Step 7 and generally in a more MMM place with our finances overall, he is a very good motivational speaker. I disagree with him quite a bit on politics, religion and lifestyle, but he does a very good job simplifying issues for listeners and inspiring people to "leave the cave, kill something and drag it home."

Quite honestly, I appreciate the simplicity of the Dave Ramsey approach. His "baby steps" and catchphrases have been a very useful mental crutch for me (and to a lesser extent DH) since we first found him around 2004. He makes personal finance radically less intimidating and provides a nice set of basic principles that are easily applicable.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Ann on August 11, 2016, 11:59:10 AM
About Dave Ramsey's view on credit cards: I feel him preaching about not using credit cards EVER is akin to AA telling their participants not to drink ever again.  I'd get annoyed if someone was telling me I was wrong to drink, but I fully support life-long temperance in my friends who have had substance abuse problems.  I won't try to persuade them at a little wine may even be healthy.  Just like credit card rewards, the benefit only occurs when there is a good deal of self-control involved.  The benefit is not worth the temptation if you know you're wired that way.

I have had an awkward conversation with a friend who was telling me credit cards were evil.  She was digging herself out of debt.  I felt as though my intelligence was insulted, though, because she acted like I couldn't see the pitfalls of revolving credit.  Uh, duh!  I totally see!  Which is why I always pay my balance off.  I have a great credit score and the credit card companies give ME money.  I wish I could redo that conversation because I was acting defensive and probably ended up sounding arrogant or judgmental.  What's right for me isn't right for everyone else.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Nick_Miller on August 11, 2016, 01:13:09 PM
I agree with Dave on things like risk. I don't have the risk tolerance to accept large piles of debt, even if mathematically I could probably (not a sure thing) earn a bit more in the stock market by increasing investments while keeping debt payment to the required minimum. I will sleep MUCH better in a few years when my student loans are gone.

However, his constant religious references and his "down home" demeanor annoy me greatly. And he's pretty sly sucking up to the "lady" callers. Have you noticed that? It's like he knows that statistically women make the majority of household purchases and so he generally sides with the woman if it's even a close call.

And I think he's totally wrong about just having kids without being in good financial shape first. He says stuff like "We don't wait to have babies around here," but I'm like "Why not???" Having children is probably the single biggest financial decision you make (perhaps #2 to deciding whether or not to get married).

Title: Re: Is Dave Ramsey a bad word here?
Post by: Jrr85 on August 11, 2016, 04:30:53 PM

And I think he's totally wrong about just having kids without being in good financial shape first. He says stuff like "We don't wait to have babies around here," but I'm like "Why not???" Having children is probably the single biggest financial decision you make (perhaps #2 to deciding whether or not to get married).

This is an extreme difference in values.  I'd bet big dollars that having kids is not a financial decision for Dave or most of his callers.  There are big financial impacts from it and those need to be considered, but generally the impacts in question are a difference from being in debt for longer or cutting back on discretionary spending more.  It's not a matter of whether the baby is going to suffer because of a poor financial position. 

Also, there is the issue of fertility.  A woman's fertility has already significantly dropped by age 30, with something like 10% of women that start trying to conceive when they are 30 being unable to.  For people that really want to have kids, that's a pretty material risk to add on just to shift how much time you spend in debt.  People on this forum obviously self select, so that might seem like a pretty reasonable risk considering the tradeoffs to most people on this forum, but I suspect it would seem much less reasonable for most of the population.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Noodle on August 11, 2016, 07:09:21 PM
I don't think it's bad.  I consider DR to be high school and MMM to be a graduate degree.  DR program helped us to change some behaviors and get out of debt.  Now MMM is helping us to pay off the mortgage and RE!

Someone else on these boards once made a comparison that I really liked--Dave Ramsey is to finances what Weight Watchers is to obesity. You aren't going to get to your most badass position financially on DR any more than you are going to become an Ironman triathlete with a perfectly managed diet on Weight Watchers...but if you are in a bad situation and just need to get started, they are GREAT at motivation, encouragement and breaking progress into small steps that can launch you to the point of stepping it up with your own resources. Sure, some people can go from the couch to the triathlon based solely on their own efforts, but there's nothing wrong with needing a little more structure.
Title: Re: Is Dave Ramsey a bad word here?
Post by: PFHC on August 11, 2016, 08:16:24 PM
Love him, hate him, whatever. We used his idea of paying the lowest balance first to start up our debt repayment 6 years ago. It worked AMAZINGLY well. I'm an engineer, and am highly mathematical and analytical, but, I am a human who is governed by psychology. So, it worked for us.

My wife listens to his show a little because she doesn't have a lot of time to sit down and read MMM. She has gained some good info and ditched a lot of bad. So for us, his info has been a net positive. That said, the governing principles we adhere to are MMM, not DR.
Title: Re: Is Dave Ramsey a bad word here?
Post by: monstermonster on September 04, 2016, 10:45:06 AM
I have my own personal finance teaching side business - teaching workshops to college students at well-off liberal arts schools (different target demo than Dave Ramsey, obvs) and I listen to his show daily. Why? Because he's a masterful businessman and he *does* change lives.

I have my own issues with his methods (as noted by people on this thread) but I can get behind the spirit of generosity and I also appreciate that he knows how to utilize human psychology to make change in people's lives- one thing I struggle with is just giving clear "steps" like he does, instead of telling people everything is individual and they just need to weigh the pros and cons. MMM/FIRE folks usually LIKE playing with the optimization, most people just want to know they'll be okay and want to automate their finances.

I love his intro, speaks well to my frugal anti-consumerist heart: “Debt is dumb, cash is king and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice.”
Title: Re: Is Dave Ramsey a bad word here?
Post by: Goldielocks on September 04, 2016, 11:09:26 AM
Dave Ramsey investment advice.

I tuned him out when I saw the ridiculously high rate of return on investments he was saying was possible.  But I can't remember...  was it 12% per year?


Anyone have a link?
Title: Re: Is Dave Ramsey a bad word here?
Post by: englishteacheralex on September 04, 2016, 11:41:25 AM
I took the Dave Ramsey class, listened to his podcast every day for seven years, called into the show twice, and taught the class with my husband.

Then I found MMM and realized that I wasn't really a Ramsey person after all. The thing is, I have never had any debt. The people calling into his show who had paid off all their debt--I could never relate to that. Who would have debt? Why in the world would anyone do that? Has always been my mentality.

Well, if you're not a debt person (I realize now that I'm kind of a weirdo), there's never anything that addresses the OTHER side of the money equation--instead of "digging yourself out of the hole" as Ramsey calls getting out of debt, you could be amassing a giant pile with your shovel. The giant pile is sort of nebulous in the Ramsey world, and it's littered with hilariously terrible investing advice.

I'm not congratulating myself on a quirk of my personality that I now understand is rare and also not really of my own doing--upbringing and biology had more to do with it, in my opinion--but I, like most MMMers, am very disciplined with money. Like, seriously disciplined. Watching every penny like a hawk. And for people like us, Ramsey will prevent us meeting our full potential.

We use credit cards like crazy! Miles! Miles! We live in Hawaii and have to travel to see family. Putting every expense possible on the credit cards allow us to do this for free. There is ZERO temptation to overspend. We're just not that kind of people. We invest like maniacs because we expect 5%-7% return on our Vanguard index funds. We kept my husband's student loan because mathematically it is cheaper than paying it off and we find no psychological benefit in having no debt just for the sake of having no debt. (The student loan...my husband got it before he met me and it will be forgiven in four more years; it just about tripled his income, so as much as we wish that he had done some kind of impressive financial gymnastics to avoid it, it hasn't really been a bad idea, financially. And Dave would have said no way.)

So anyway, I never listen to Dave Ramsey anymore. And we are actually profoundly religious Christians. I don't hate the guy, but his investing advice is bordering on unethical, in my opinion. And most of the rest of his advice doesn't apply to the small niche group of people who are intensely rigorous about their personal finances.
Title: Re: Is Dave Ramsey a bad word here?
Post by: MoonLiteNite on September 04, 2016, 05:47:57 PM
I believe he is great at getting people's attention. And he is great helping those with NO self control.
The way he does the debt snowball thing is MEH on paper, but if someone has no will  power to do it the right way, at least Dave's way gets them started.

I love his rants, and how he calls people stupid and tells them to sell their upside down overpriced cars and homes. Even if it is for a 30k loss!

I dislike his little jesus comments. I guess it is HIS show, so he can mix money and jesus, but i think it is just weird and turns me off.

I read a few comments of people here disagreeing with his investment advice. From what i have seen he says to do some type 25/25/25/25 mixture of index funds. A bit confused on what these comments are talking about. He calls for growth fund, value fund, international index, bonds (i believe that is what i have heard)

I like his honestly, he tries to answer every question as if he was in their shoes.

Oh and i HATE his dislike for ESPPs and his dislike for credit cards. He preaches how both are bad and evil. Yeah i suppose a CC with cashback is terrible for someone with no selfcontrol, but  for me, they are awesome! He just has a blanket, NO ESPP rule. I see the underlying reason why some may not be good, but others can be amazing, even more so if you work for a bluechip company!
Title: Re: Is Dave Ramsey a bad word here?
Post by: MoonLiteNite on September 04, 2016, 05:52:52 PM
Dave Ramsey investment advice.

I tuned him out when I saw the ridiculously high rate of return on investments he was saying was possible.  But I can't remember...  was it 12% per year?


Anyone have a link?

He says it all the time, and he always defends it. He starts off by saying market returns 7% + 2% from dividends and the other % includes compounding. Although he never states how long you have to leave it in for it compound out to 12%.

I'll let you watch the video since i am too lazy to :D

https://www.youtube.com/watch?v=mHkXjEOQ7aU
Title: Re: Is Dave Ramsey a bad word here?
Post by: CarrieWillard on September 04, 2016, 06:39:13 PM
I think that Dave Ramsey has one interest one interest alone:  Padding his bank accounts. Kudos to him:  He figured out how to mass market him fairly self-evident advice and make a buck.   Does he really care whether YOU get out of debt?  No.   Only to the extent that your success may lead to him being able to sell more.

I tend to like the advice as it is "sold" by folks like MMM and ERE: Knowledge, shared freely without any need to sell product to do so. Do they make money off of advertising, etc., from their blogs? Absolutely.  But...you and I don't have to buy anything to get the information freely.  DR doesn't work that way, and never will.

Doesn't give information away freely? He has a talk radio show that is free to listen to for 3 hours a day, thousands of articles on his site, gives away FPU classes and books every day on the show, and every library has his books.

Your last statement is simply false.
Title: Re: Is Dave Ramsey a bad word here?
Post by: lhamo on September 04, 2016, 08:13:34 PM

I read a few comments of people here disagreeing with his investment advice. From what i have seen he says to do some type 25/25/25/25 mixture of index funds. A bit confused on what these comments are talking about. He calls for growth fund, value fund, international index, bonds (i believe that is what i have heard)

No, what he recommends is a 4-way even split across what he calls growth, growth and income, aggressive growth, and international.  Which is basically large cap, mid cap, small cap and international.  He is TOTALLY against bonds.  He used to also be virulently against index funds, but he has now started to recommend them for certain people in certain circumstances (basically if you are saving up money for more than 5 years for a house purchase or other real estate investment.

He's also recently dismantled the ELP program for investment advice, and changed it to something called "Smartvestor."  Same wolf in different sheep's clothing, I suspect.  Probably related to the recent gvt. rulings on investment advice.  Found a different way to keep taking a cut that won't fall afowl of those new regs. 
Title: Re: Is Dave Ramsey a bad word here?
Post by: madmax on September 05, 2016, 06:53:32 AM
I was really put off after reading reviews about his organization by ex employees on Glassdoor. Look it up, makes for an interesting read. TLDR; he is a complete authoritarian, health benefits are really shitty, they discriminate against non Christians while hiring by asking about how many times they go to church etc. I don't trust a man who treats his subordinates like shit not matter how they present themselves on radio.
Title: Re: Is Dave Ramsey a bad word here?
Post by: KickingRocks on September 05, 2016, 01:08:30 PM
This is how I view Dave Ramsey:


He dumbs it down to the most common denominator and preaches to those masses.  Luckily for him the world is full of stupid people that can't see past Saturday night when it comes to their pay checks.  Because of this he will always have an audience to preach to.  I don't hate the guy and I actually think he is doing the general masses some good.  With that said if you have half a brain you wouldn't have gotten yourself into such a mess that you need his help in the first place so a lot of what he teaches doesn't apply to me or people on this forum.  I listen to his show because it's entertaining in the fact that I like to laugh at idiots.  You know the caller that calls in and makes 30k a year but has 175k in debts.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Nick_Miller on September 26, 2016, 10:34:47 AM
Something he said last week reminded me of this thread. He told a 35-year-old woman that if she kept her $30,000 investment (I think it was a 401k) alone for 30 years, that "she would have a million bucks" even if she never added another dime.

Well I used an investment calculator to check his math. He's assuming a 12.5% annual return. What? A more realistic 7% return would result in only $228,000 in 30 years. That is a HUGE difference. I just think that's inexcusable for him to paint with such a broad brush!! What if she really believes this? What if she thinks (wrongly) that she really can just "leave it alone" and that she will be all set for retirement??

Yes, I know the stock market has averaged 12% over the past century or more, but it sure hasn't in the past 20-30 years. Between 1970 and 2000, I think it was more like 7% per year. Shouldn't the recent more modest returns at least be addressed and shared with his audience?

Why doesn't he at least add the caveat, "Now if you manage to get 12% returns, you could have a million dollars, but a lower return would result in a much smaller amount."?
Title: Re: Is Dave Ramsey a bad word here?
Post by: Miss Piggy on September 26, 2016, 12:01:28 PM
I don't listen to Dave's radio show (did a few times several years ago, and it motivated me to pay off our mortgage within 2.5 years), but I think his "Total Money Makeover" book should be required reading for any family member who receives a monetary "gift" mentioned in the Relatives who just don't get it thread. Yeah, a lot of his advice isn't the best, but it can be very eye-opening and motivating for the clueless. Any check mailed to a relative who desperately needs help due to shitty financial decisions should be mailed as a bookmark inside this book.

(Yes, there are far better books out there for the mustachian-minded, but they don't meet the heavily-debted-poor-decision-makers where the are.)
Title: Re: Is Dave Ramsey a bad word here?
Post by: monstermonster on September 26, 2016, 12:04:13 PM
My business goal for my personal finance teaching business is essentially to be Dave Ramsey for Millennials without the Jesus references, bad investment advice, and not quite as hard a line on credit cards.
Title: Re: Is Dave Ramsey a bad word here?
Post by: boarder42 on September 26, 2016, 12:12:35 PM
Something he said last week reminded me of this thread. He told a 35-year-old woman that if she kept her $30,000 investment (I think it was a 401k) alone for 30 years, that "she would have a million bucks" even if she never added another dime.

Well I used an investment calculator to check his math. He's assuming a 12.5% annual return. What? A more realistic 7% return would result in only $228,000 in 30 years. That is a HUGE difference. I just think that's inexcusable for him to paint with such a broad brush!! What if she really believes this? What if she thinks (wrongly) that she really can just "leave it alone" and that she will be all set for retirement??

Yes, I know the stock market has averaged 12% over the past century or more, but it sure hasn't in the past 20-30 years. Between 1970 and 2000, I think it was more like 7% per year. Shouldn't the recent more modest returns at least be addressed and shared with his audience?

Why doesn't he at least add the caveat, "Now if you manage to get 12% returns, you could have a million dollars, but a lower return would result in a much smaller amount."?

you have to talk in terms of real return.   7% is a perfectly acceptable real return in to calculate future value in today's dollars.  doing it in future dollars doesnt benefit anyone really esp. those who dont understand finance in the first place. 

there is no 30 year period where the stock market got 7% nominal returns.  the lowest real returns over a 20 year period are right around 7%

Nominal Returns - worst in history over 30 years:
1926-1956: +10.77%
1956-1986: +9.63%
1986-2016: +9.99%
Title: Re: Is Dave Ramsey a bad word here?
Post by: monstermonster on September 26, 2016, 12:13:59 PM
Well, he's always recommending "growth funds" instead of index funds (as we do) and that's a large part of how he justifies the 12% historical returns.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Pigeon on September 26, 2016, 12:34:59 PM
I think that Dave Ramsey has one interest one interest alone:  Padding his bank accounts. Kudos to him:  He figured out how to mass market him fairly self-evident advice and make a buck.   Does he really care whether YOU get out of debt?  No.   Only to the extent that your success may lead to him being able to sell more.

I tend to like the advice as it is "sold" by folks like MMM and ERE: Knowledge, shared freely without any need to sell product to do so. Do they make money off of advertising, etc., from their blogs? Absolutely.  But...you and I don't have to buy anything to get the information freely.  DR doesn't work that way, and never will.

Doesn't give information away freely? He has a talk radio show that is free to listen to for 3 hours a day, thousands of articles on his site, gives away FPU classes and books every day on the show, and every library has his books.

Your last statement is simply false.

The library having his books is a function of the library having purchased his books with your tax dollars.  It isn't him giving his books away for free.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Goldielocks on September 26, 2016, 10:49:38 PM
My business goal for my personal finance teaching business is essentially to be Dave Ramsey for Millennials without the Jesus references, bad investment advice, and not quite as hard a line on credit cards.

How do you plan to make money (curious, not sarcastic)..
Title: Re: Is Dave Ramsey a bad word here?
Post by: sol on September 26, 2016, 11:01:46 PM
I think most of us recognize that Dave Ramsey is a fraud. 

He uses his show to advertise for his network of paid investment advisors.  He gets a cut any time one of his listeners signs up with one of his hucksters (aka recommended financial advisors).  This is the revenue stream for Dave's business.  The radio show is just a convoluted advertising scheme to funnel people to his networks of advisors, where they will pay exorbitant fees from which Dave skims a little off the top.  He's effectively an intermediary investment manager who receives a cut of all invested funds, without doing any of the work of managing investments, just by signing up new customers.

other threads:
http://forum.mrmoneymustache.com/welcome-to-the-forum/dave-ramsey-advice-that-pisses-me-off/
http://forum.mrmoneymustache.com/ask-a-mustachian/bullied-out-of-dave-ramsey-forum/
http://forum.mrmoneymustache.com/ask-a-mustachian/has-anyone-followed-dave-ramsey's-money-makeover/
http://forum.mrmoneymustache.com/welcome-to-the-forum/dave-ramsey-unrealistic-investment-expectations/
http://forum.mrmoneymustache.com/antimustachian-wall-of-shame-and-comedy/dave-ramsey-advocates-setting-aside-money-to-just-blow-on-garbage/
and of course
http://www.mrmoneymustache.com/2011/05/19/mr-money-mustache-vs-dave-ramsey/

Personally, I don't usually take advice from anyone who claims the invisible man in the sky told them what to do.  But that's just me, and you shouldn't let it discourage you from listening to potentially good advice just because it comes from a ridiculously bad source.  In this case, the advice isn't very good anyway.
Title: Re: Is Dave Ramsey a bad word here?
Post by: monstermonster on September 26, 2016, 11:19:29 PM
My business goal for my personal finance teaching business is essentially to be Dave Ramsey for Millennials without the Jesus references, bad investment advice, and not quite as hard a line on credit cards.

How do you plan to make money (curious, not sarcastic)..

Based on the market I already have, contracts with colleges and employers as a speaker and coaching for folks with higher incomes.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Playing with Fire UK on September 27, 2016, 12:02:04 AM
Personally, I don't usually take advice from anyone who claims the invisible man in the sky told them what to do.  But that's just me, and you shouldn't let it discourage you from listening to potentially good advice just because it comes from a ridiculously bad source.  In this case, the advice isn't very good anyway.

Sol, you have made my day. Thank you.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Palindrome on October 22, 2016, 10:11:00 PM
I don't think it's bad.  I consider DR to be high school and MMM to be a graduate degree.  DR program helped us to change some behaviors and get out of debt.  Now MMM is helping us to pay off the mortgage and RE!

I see DR as amateur porn and MMM/ERE as the professionals.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Frugalman19 on October 23, 2016, 11:11:00 AM
Dave Ramsey has people make better financial decisions than they are making at the moment. He helps thousands of people and gets people to understand money a little better.

Is his advice the great? Yes, for most americans. Thats what everyone is discounting. 99% dont want to have anything to do with managing their own finances, they dont want to learn about investing(hence the A share funds, because you have someone to talk to and teach you).

But for people who follow MMM, he is horribly simple. He gives too much credit to the emotional side of finance and doesnt cater to the people who can separate emotions from their financial choices.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Dicey on October 23, 2016, 04:57:02 PM
It's the story
Of David Ramsey
Who got over leveraged on investment real estate
Now he says all debt is bad
And quotes the Bible
Overgeneralization from self

It's the story
Of 12% Equities
With four types of funds from ELPs
If you can't beat the market
You're a moron
Past performance FTW

The Davie Bunch
The Davie Bunch
That's the way
We became
The Davie Bunch
Good, except for the last line. Should read: That's the way "They" became The Davie Bunch. Because the majority of Mustachians are way past the level "Davie" preaches to.

ETA: Actually, it's two words. Neither of them very good for aspiring or actual mustachians, IMO.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Metric Mouse on October 23, 2016, 11:33:00 PM
I don't think it's bad.  I consider DR to be high school and MMM to be a graduate degree.  DR program helped us to change some behaviors and get out of debt.  Now MMM is helping us to pay off the mortgage and RE!

I see DR as amateur porn and MMM/ERE as the professionals.

Picturing this now... not a good image.
Title: Re: Is Dave Ramsey a bad word here?
Post by: WerKater on October 24, 2016, 12:39:16 AM
Dave Ramsey investment advice.

I tuned him out when I saw the ridiculously high rate of return on investments he was saying was possible.  But I can't remember...  was it 12% per year?


Anyone have a link?

He says it all the time, and he always defends it. He starts off by saying market returns 7% + 2% from dividends and the other % includes compounding. Although he never states how long you have to leave it in for it compound out to 12%.
9% is 12% because of compund interest? Everything about that statement is wrong...
Title: Re: Is Dave Ramsey a bad word here?
Post by: MoseyingAlong on October 24, 2016, 01:53:09 AM
If the wise and talented writer jlcollinsnh wrote it, would it be more credible?
http://jlcollinsnh.com/2012/05/16/stocks-part-vii-can-everyone-really-retire-a-millionaire/
Title: Re: Is Dave Ramsey a bad word here?
Post by: WerKater on October 24, 2016, 06:49:12 AM
If the wise and talented writer jlcollinsnh wrote it, would it be more credible?
http://jlcollinsnh.com/2012/05/16/stocks-part-vii-can-everyone-really-retire-a-millionaire/
If you are referring to my statement: jlcollinsh does not write anything of the sort.

He writes that the S+P 500 returned 8.68% per year (from 1975 to 2015) if you ignore dividends and 11.9% if you include them.

I can confirm the first number (The index has gone from 70.23 to to 2058.2 points which works out to an annual increase factor (2058.2/70.23)^(1/40) = 1.088, hence a return of 8.8%. I have no data about the dividends, but 3% does seem plausible.

So the 12% total return per year is probably correct. But the very creative way of arriving at this number by saying "7% return plus 2% dividends plus <something about compunding> is not how math works.
Title: Re: Is Dave Ramsey a bad word here?
Post by: ender on October 24, 2016, 07:00:05 AM
So the 12% total return per year is probably correct. But the very creative way of arriving at this number by saying "7% return plus 2% dividends plus <something about compunding> is not how math works.

I've listened to the radio show a ton and have never heard him say anything about "7% + 2%" before.
Title: Re: Is Dave Ramsey a bad word here?
Post by: WerKater on October 24, 2016, 07:26:28 AM
So the 12% total return per year is probably correct. But the very creative way of arriving at this number by saying "7% return plus 2% dividends plus <something about compunding> is not how math works.

I've listened to the radio show a ton and have never heard him say anything about "7% + 2%" before.
And I've never listened to anything; I just responded to [MoonLiteNite on September 05, 2016, 01:52:52 AM] ;)
Title: Re: Is Dave Ramsey a bad word here?
Post by: Goldielocks on October 24, 2016, 03:41:47 PM
Dave Ramsey investment advice.

I tuned him out when I saw the ridiculously high rate of return on investments he was saying was possible.  But I can't remember...  was it 12% per year?


Anyone have a link?



He says it all the time, and he always defends it. He starts off by saying market returns 7% + 2% from dividends and the other % includes compounding. Although he never states how long you have to leave it in for it compound out to 12%.
9% is 12% because of compund interest? Everything about that statement is wrong...

ETA:  DARN QUOTES!  FIXED!

Dave says that about 12% ...., and yet, the actual rate of return, SP 500, 1950 to 2009, adjusted for inflation and including dividends is only 7%  ...TOTAL....  but Not including TAXES...

I grant you that this is up to 2009 and not to today, so it is likely a bit more than 7%... but you still need to pay taxes on your gains.

http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm (http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm)
Title: Re: Is Dave Ramsey a bad word here?
Post by: lhamo on October 24, 2016, 04:39:23 PM

I grant you that this is up to 2009 and not to today, so it is likely a bit more than 7%... but you still need to pay taxes on your gains.

http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm (http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm)

You will get vastly different results depending on what start and end dates you choose.  There was a historically huge run-up in the market from mid-2009 through 2014.  Which according to this analysis translated into a compounded rate of 9.8% for the S&P since its inception.   

http://www.marketwatch.com/story/understanding-performance-the-sp-500-in-2015-02-18

Since 2015 and 2016 have been comparatively flat, adding those years totals in will drag the compound average down a bit.   But not including the 2009-2014 run up is definitely misleading.

I also disagree with insisting that taxes should be considered as part of the baseline equation.   For many MMM-ish investors, the ability to minimize taxes is very real.  For example, we will most likely be living mostly off dividends for the next few years, and plan to keep those in the 0% tax bracket and use any extra space to convert funds from traditional retirement plans to Roths.  My Fidelity RIP projections have us paying no federal taxes for several years. 
Title: Re: Is Dave Ramsey a bad word here?
Post by: Goldielocks on October 24, 2016, 05:14:57 PM

I grant you that this is up to 2009 and not to today, so it is likely a bit more than 7%... but you still need to pay taxes on your gains.

http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm (http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm)

You will get vastly different results depending on what start and end dates you choose.  There was a historically huge run-up in the market from mid-2009 through 2014.  Which according to this analysis translated into a compounded rate of 9.8% for the S&P since its inception.   

http://www.marketwatch.com/story/understanding-performance-the-sp-500-in-2015-02-18

Since 2015 and 2016 have been comparatively flat, adding those years totals in will drag the compound average down a bit.   But not including the 2009-2014 run up is definitely misleading.

I also disagree with insisting that taxes should be considered as part of the baseline equation. 

Oh agreed! I don't think you need or should include taxes in the stated return %'s...  that would confuse the conventional way that most people post the results, for certain!

.... but it is good to note on this specific thread that  a lot of Dave Ramsey, and other general population, would forget that the $100k sitting in their investment account at age 65 will likely only be $85k of spending money over the next several years, even with good planning.....

Thanks for the link.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Proud Foot on October 25, 2016, 12:47:01 PM
I thought you wrote an excellent article gsander10!  I knew they were an insurance broker and figured they did not use all companies but it was good to see the breakdown and comparison you provided in the article. 

With them being the only life and disability insurance company he recommends I do wonder what the relationship is between the two.  He says he is good friends with the owner and uses them for both personal and business insurance but also states he has no ownership and the Zander website states he has no ownership.
Title: Re: Is Dave Ramsey a bad word here?
Post by: MgoSam on October 25, 2016, 12:57:03 PM
I'm not a fan of him, but I understand that he helps a lot of people get a handle on their debt. That part I like. I'm just tired of people that know I'm a fairly good investor coming up to me and asking for "advice" and then getting very hostile when what I say isn't what they expect to hear. I've recently learned to walk away, if they don't like what they're hearing than it's no skin off my back. This isn't really D/R's fault, but rather that the people that go to his class tend to be religious and religious people tend to take things as gospel. Tell them something different is enough to set some of them off. 

A few months ago I was asked to explain what a mutual fund and index fund was to someone who then proceeded to tell me that I was "wrong" and that she and her husband don't "need" my advice. Umm lady, you came and asked me for my advice, no need to get all pissy about it. The reason I bring it up now? She just emailed me yesterday asking for the name of a good mutual fund company, I just deleted it.
Title: Re: Is Dave Ramsey a bad word here?
Post by: Palindrome on October 28, 2016, 06:33:16 AM
I don't think it's bad.  I consider DR to be high school and MMM to be a graduate degree.  DR program helped us to change some behaviors and get out of debt.  Now MMM is helping us to pay off the mortgage and RE!

I see DR as amateur porn and MMM/ERE as the professionals.

Picturing this now... not a good image.

Haha. I meant to say DR is like the amateur porn of personal finance. Sorry I gave you an unwanted visual.