Author Topic: Dave Ramsey advice that pisses me off  (Read 66712 times)

Jags4186

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Dave Ramsey advice that pisses me off
« on: May 14, 2015, 12:21:22 PM »
I was listening to the Dave Ramsey podcast (mostly for the lulz) and I heard the most ridiculous thing today. A man called in wanting to know if he should take a reverse mortgage.  Dave asked him a few questions:

Age: 83
Family: none whatsoever
Income: $830/mo from social security
Owns home outright
No savings

Dave told him it was "stupid" to take out a reverse mortgage and a "mathematically awful product". He suggested he take out a conventional mortgage and pay on it OR sell his home and move down to a 50k condo.

I found myself yelling at the radio.

1) what 83 year old man can get a conventional mortgage (that even if someone would give it to him leaves him open to a foreclosure)

2) what 83 year old man with no family wants to move

3) since when did "math" figure into any of Dave's arguments?

The guys 83 years old. He could take the 150k from the reverse mortgage, put it in a savings account, and double his income for 15 years making no interest, and never have to worry about being foreclosed on or making mortgage payments.


Sid Hoffman

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Re: Dave Ramsey advice that pisses me off
« Reply #1 on: May 14, 2015, 12:31:57 PM »
DR's strength seems to be in convincing people aged 20-50 to stop using debt as a way to live above their means.  The people I've talked to who've had their lives improved the most have been people who lived in a debt lifestyle and were turned around to the idea of living debt free instead.  That seems to be his strength.  I really wouldn't use DR teachings for anything beyond that.  An 83-year old should be talking to a CPA or CFP or someone who can specialize in the financial needs of people who are already retired.  It's a very different market to serve than young, working people who are living from one loan to the next.

Travis

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Re: Dave Ramsey advice that pisses me off
« Reply #2 on: May 14, 2015, 01:11:36 PM »
DR's strength seems to be in convincing people aged 20-50 to stop using debt as a way to live above their means.  The people I've talked to who've had their lives improved the most have been people who lived in a debt lifestyle and were turned around to the idea of living debt free instead.  That seems to be his strength.  I really wouldn't use DR teachings for anything beyond that.  An 83-year old should be talking to a CPA or CFP or someone who can specialize in the financial needs of people who are already retired.  It's a very different market to serve than young, working people who are living from one loan to the next.

Dave Ramsey is a lot like Dr. Oz in that he doesn't make the distinction between what is his specialty and what isn't.  If it roughly pertains to their fields, they have opinions on them - educated or otherwise and don't inform people that they're straying outside that narrow lane.

Kris

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Re: Dave Ramsey advice that pisses me off
« Reply #3 on: May 14, 2015, 01:17:01 PM »
That is freaking ridiculous.  Reverse mortgages aren't for everyone, but this particular guy is EXACTLY the sort of person who should be taking one.

kendallf

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Re: Dave Ramsey advice that pisses me off
« Reply #4 on: May 14, 2015, 01:19:59 PM »
My mother is in almost exactly this state (down to being 83).  As you mention, there's no way she'd ever qualify for a mortgage.  We discussed the reverse mortgage idea a bit.  It does have significant downsides, mainly relating to the risk that she may need to go to a long term care facility at some point.  Many of the reverse mortgages are written to allow the bank to demand the repayment if the owner is not resident in the house.  This would essentially force a sale or foreclosure at the worst possible time, of her only asset, with any remaining money now unprotected from Medicaid seizure to pay for her long term care.  She has enough Social Security survivor's benefits to live on since my step-father passed away, so we're just leaving it be for now.

In the case of this guy, though, what's the down side?  His income is very, very low; the money might give him a few more comfortable years, and with no family and no heirs, who cares if they take the house when he has to move?  It's only mathematically horrible if he had other options.  He doesn't.

jms493

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Re: Dave Ramsey advice that pisses me off
« Reply #5 on: May 14, 2015, 01:51:34 PM »
You guys have to remember its a RADIO show.  The person calling in to a radio show for serious advice and expect to get the right answer in 2 mins is equally at fault.

RexualChocolate

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Re: Dave Ramsey advice that pisses me off
« Reply #6 on: May 14, 2015, 02:09:03 PM »
Ramsay's investing advice is awful too. Literally boils down to: "Invest in funds with good results in the past, and oh, feel free to use these that I get a kickback from"


boyerbt

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Re: Dave Ramsey advice that pisses me off
« Reply #7 on: May 14, 2015, 02:42:38 PM »
I listen to DR from time to time mostly to hear the different people do their DFS and hear about how they have pulled themselves out of debt. Because I am in the process of paying off my student loans (step 2 in DR's plan) I find their stories to be somewhat motivating and a part of me wants to call in a do it as well once I am out of debt.

HOWEVER - the one item that never ceases to rub me the wrong way is when DR tells someone that you should never, under any circumstances, help to pay off someone's debt unless you are married. He says that it is not your responsibility until "I do". To me this is BS! My girlfriend, who is debt free, is also helping me pay down my debt because she understands that the quicker we can pay my loans off, the sooner we will be able to do other things that we want to such as travel. Dave always explains these scenarios as a lost cause because at any point the person can walk away from you and you have been wasting your money by helping pay down the debt.

 Not a huge vote of confidence for all of these relationships....

Jags4186

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Re: Dave Ramsey advice that pisses me off
« Reply #8 on: May 14, 2015, 03:02:09 PM »
I listen to DR from time to time mostly to hear the different people do their DFS and hear about how they have pulled themselves out of debt. Because I am in the process of paying off my student loans (step 2 in DR's plan) I find their stories to be somewhat motivating and a part of me wants to call in a do it as well once I am out of debt.

HOWEVER - the one item that never ceases to rub me the wrong way is when DR tells someone that you should never, under any circumstances, help to pay off someone's debt unless you are married. He says that it is not your responsibility until "I do". To me this is BS! My girlfriend, who is debt free, is also helping me pay down my debt because she understands that the quicker we can pay my loans off, the sooner we will be able to do other things that we want to such as travel. Dave always explains these scenarios as a lost cause because at any point the person can walk away from you and you have been wasting your money by helping pay down the debt.

 Not a huge vote of confidence for all of these relationships....

That happens to be a piece of advice of his I definitely DO think is important to follow.

Jags4186

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Re: Dave Ramsey advice that pisses me off
« Reply #9 on: May 14, 2015, 03:11:36 PM »
You guys have to remember its a RADIO show.  The person calling in to a radio show for serious advice and expect to get the right answer in 2 mins is equally at fault.

Right but you think he might say "hey you are in a pretty unique situation that doesn't relate to many of our listeners.  It requires a little more explanation than I can give on the air.  We'll have one of our people pick up and talk to you."

Instead of just saying NO to what seems to me to be a perfectly reasonable thing to do...

jmusic

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Re: Dave Ramsey advice that pisses me off
« Reply #10 on: May 14, 2015, 03:45:33 PM »
I listen to DR from time to time mostly to hear the different people do their DFS and hear about how they have pulled themselves out of debt. Because I am in the process of paying off my student loans (step 2 in DR's plan) I find their stories to be somewhat motivating and a part of me wants to call in a do it as well once I am out of debt.

HOWEVER - the one item that never ceases to rub me the wrong way is when DR tells someone that you should never, under any circumstances, help to pay off someone's debt unless you are married. He says that it is not your responsibility until "I do". To me this is BS! My girlfriend, who is debt free, is also helping me pay down my debt because she understands that the quicker we can pay my loans off, the sooner we will be able to do other things that we want to such as travel. Dave always explains these scenarios as a lost cause because at any point the person can walk away from you and you have been wasting your money by helping pay down the debt.

 Not a huge vote of confidence for all of these relationships....

Sure it's not but it's definitely a realistic scenario, and it happens a LOT more than you think.  You also happen to be on the receiving end of this exact situation, so agreeing with it would amount to "biting the hand that feeds you."

neil

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Re: Dave Ramsey advice that pisses me off
« Reply #11 on: May 14, 2015, 03:59:14 PM »
Not a huge vote of confidence for all of these relationships....

A quick google search threw out a number of ~85% of relationships ending in a breakup.  On what basis should a radio host giving financial advice presume otherwise?

If you give money to someone who you have any kind of personal relationship with (dating or otherwise), you may as well consider it a gift and lost if said relationship expires.  If you are not ok with that result, you can't justify giving the money.

College Stash

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Re: Dave Ramsey advice that pisses me off
« Reply #12 on: May 14, 2015, 05:00:32 PM »
I hate his whole tithe advice too. Ass over head in debt? Tithe because the church is always the answer! Always! Not sure how the church is going to solve a person's financial problems, but okay. Nearly all of Ramsey's advice is poor outside of the few rather obvious claims he makes.

Vilgan

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Re: Dave Ramsey advice that pisses me off
« Reply #13 on: May 14, 2015, 05:05:45 PM »
HOWEVER - the one item that never ceases to rub me the wrong way is when DR tells someone that you should never, under any circumstances, help to pay off someone's debt unless you are married. He says that it is not your responsibility until "I do". To me this is BS! My girlfriend, who is debt free, is also helping me pay down my debt because she understands that the quicker we can pay my loans off, the sooner we will be able to do other things that we want to such as travel. Dave always explains these scenarios as a lost cause because at any point the person can walk away from you and you have been wasting your money by helping pay down the debt.

 Not a huge vote of confidence for all of these relationships....

His advice for that seems spot on. Your girlfriend is not acting wisely in this manner and is going to be really sad if the relationship ends as it is most likely going to. Paying someone's debts for them is a terrible way to show "confidence" in a relationship. A 0% loan w/ a contract describing terms of repayment is helping someone in a relationship. Giving them money is displaying the a lack of sense.

daymare

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Re: Dave Ramsey advice that pisses me off
« Reply #14 on: May 14, 2015, 05:49:48 PM »
DR's advice not to pay off the debt of someone who you're not married to is probably one of his best pieces of advice.  I completely agree with it.

I listened to his show for about a year, but got fed up with his overly simplistic, and in some cases totally wrong advice.  Also I was completely grossed out by how invested he was in his daughters' sex life.

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Re: Dave Ramsey advice that pisses me off
« Reply #15 on: May 14, 2015, 05:54:40 PM »
I hate his whole tithe advice too. Ass over head in debt? Tithe because the church is always the answer! Always! Not sure how the church is going to solve a person's financial problems, but okay. Nearly all of Ramsey's advice is poor outside of the few rather obvious claims he makes.

He's a Christian, gives Christian advice, and the Bible is rather clear on supporting your local church.

So, yeah, it's decent advice from his perspective and from the perspective of a lot of his listeners.

Just because the MMM groupthink hates religion and charity doesn't mean everyone does...

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Re: Dave Ramsey advice that pisses me off
« Reply #16 on: May 14, 2015, 06:42:58 PM »
DR's advice not to pay off the debt of someone who you're not married to is probably one of his best pieces of advice.  I completely agree with it.

Yup. I wouldn't pay off someone else's debts and wouldn't expect anyone to pay off mine.

Of course the person taking someone else's hard earned money thinks it's a great idea. but they'd have to justify the act.

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AJ

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Re: Dave Ramsey advice that pisses me off
« Reply #17 on: May 14, 2015, 07:23:39 PM »
He's a Christian, gives Christian advice, and the Bible is rather clear on supporting your local church.

So, yeah, it's decent advice from his perspective and from the perspective of a lot of his listeners.

Just because the MMM groupthink hates religion and charity doesn't mean everyone does...

I consider my self quite firmly entrenched in "MMM groupthink" and am also religious, thankyouverymuch. Many devout Christians disagree on the stance that the Bible prescribes tithing to a home church. There are far more Christ-like uses of money than paying for a bunch of yuppies to read the Bible over brunch. I personally love Dave Ramsey, but the criticisms voiced here have merit and shouldn't be dismissed out of hand.

Sofa King

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Re: Dave Ramsey advice that pisses me off
« Reply #18 on: May 14, 2015, 07:34:14 PM »
You don't have to agree 100% with everything Dave Ramsey says (even he says so). I know I don't.  But over all his show and it's message has helped and changed MANY people lives for the better!!!  I think his show is great!!!

Jags4186

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Re: Dave Ramsey advice that pisses me off
« Reply #19 on: May 14, 2015, 07:58:52 PM »
You don't have to agree 100% with everything Dave Ramsey says (even he says so). I know I don't.  But over all his show and it's message has helped and changed MANY people lives for the better!!!  I think his show is great!!!

I do think most of his advice is decent. Most of the people who call in are in the same situation and the same advice works. I was just floored by what he told this old man who called in. His situation wasn't the same as everyone's...I just thought it was irresponsible what he told the man

ThatGuy

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Re: Dave Ramsey advice that pisses me off
« Reply #20 on: May 14, 2015, 09:01:38 PM »
Ramsay's investing advice is awful too. Literally boils down to: "Invest in funds with good results in the past, and oh, feel free to use these that I get a kickback from"

It's been a while since I've listened to his show but if I remember right he specifically advises his followers to invest in front load mutual funds and as you said he directs everyone towards the ones he gets paid to promote.  After I realized this I lost all interest in anything he had to say.

arcangel911

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Re: Dave Ramsey advice that pisses me off
« Reply #21 on: May 15, 2015, 02:59:31 AM »
I feel that his advice to get out of debt is a good thing and some of it is quite sound. How to make money work for you... that's not his style in my mind. His investment strategies are not in line with mine.

cerebus

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Re: Dave Ramsey advice that pisses me off
« Reply #22 on: May 15, 2015, 03:10:13 AM »
After a brief flirtation with the works of Robert Kiyosaki I realized that basically all of these financial advice gurus are amateurs whose only legitimate expertise is self-promotion and the discovery of a niche audience. If you are drowning in debt and clueless, they can be great at giving you a bit of a facepunch and making you wake up about your own finances, but they can't offer much more than that.
« Last Edit: May 15, 2015, 05:33:23 AM by cerebus »

jms493

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Re: Dave Ramsey advice that pisses me off
« Reply #23 on: May 15, 2015, 05:12:11 AM »
Replying to the original post...i listened to the call.  Ramsey never, ever advises anyone to go in debt for any reason.  Therefore advising someone to take on a reverse mortgage would be out of line with his teachings.  He has one way and he stays on his track.  In most cases it is good advice to most people and thats what he targets.

fb132

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Re: Dave Ramsey advice that pisses me off
« Reply #24 on: May 15, 2015, 05:30:29 AM »
I listen to DR from time to time mostly to hear the different people do their DFS and hear about how they have pulled themselves out of debt. Because I am in the process of paying off my student loans (step 2 in DR's plan) I find their stories to be somewhat motivating and a part of me wants to call in a do it as well once I am out of debt.

HOWEVER - the one item that never ceases to rub me the wrong way is when DR tells someone that you should never, under any circumstances, help to pay off someone's debt unless you are married. He says that it is not your responsibility until "I do". To me this is BS! My girlfriend, who is debt free, is also helping me pay down my debt because she understands that the quicker we can pay my loans off, the sooner we will be able to do other things that we want to such as travel. Dave always explains these scenarios as a lost cause because at any point the person can walk away from you and you have been wasting your money by helping pay down the debt.

 Not a huge vote of confidence for all of these relationships....
He is right on that one, just look at shows like Judge Judy where former couples go to court, because they would help pay their gf/bf expenses and then when they break up, they ask for their money back, the other person usually defends by saying it was a gift. If it works for you, glad it does, but I know I wouldn't do it.

fb132

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Re: Dave Ramsey advice that pisses me off
« Reply #25 on: May 15, 2015, 05:37:13 AM »
I hate his whole tithe advice too. Ass over head in debt? Tithe because the church is always the answer! Always! Not sure how the church is going to solve a person's financial problems, but okay. Nearly all of Ramsey's advice is poor outside of the few rather obvious claims he makes.
I don't think that is true, I remember Ramsey once said to a caller that if he is in debt, it is ok to put the tithing aside until he gets his mess cleaned up, although in his past, Ramsey was tithing even when he was bankrupt.

I regularly listen to Dave Ramsey whenever I have the urge to spend and I have to say his radio show takes away all that urge of spending on stupid stuff. But I don't listen to all of his advice, I am not a hardcore christian nor do I go to church, so whatever he says about god and faith, I usually ignore itéé..samething when it comes to investments, he wants people to put their money on mututal funds, not sure how much they cost in the US, but here in Canada, mutual funds cost way too much (2% overall).

I just wish MMM would do a similar podcast, that would be cool, but I doubt Pete would want to do that.

Jags4186

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Re: Dave Ramsey advice that pisses me off
« Reply #26 on: May 15, 2015, 06:12:26 AM »
Replying to the original post...i listened to the call.  Ramsey never, ever advises anyone to go in debt for any reason.  Therefore advising someone to take on a reverse mortgage would be out of line with his teachings.  He has one way and he stays on his track.  In most cases it is good advice to most people and thats what he targets.

Except that he recommended the guy take out a conventional mortgage (which Ramsey knows he won't qualify for). Probably why he didn't plug Churchhill Mortgage...
« Last Edit: May 15, 2015, 06:13:59 AM by Jags4186 »

Landlord2015

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Re: Dave Ramsey advice that pisses me off
« Reply #27 on: May 15, 2015, 07:01:46 AM »
I have on another forum people who hate Robert Kioysaki and love David Ramsey.

I would say depending on your economy situation it is different what is best for you. I like partly David Ramsey but not of all of his advice it is a bit chicken advice:)

Robert Kioysaki is bold advice, but there is a fine line between being genius and insane sometimes. Proof? Many super smart chess masters have become insane.

A psychopath is not same as sociopath. A psychopath is usually smart and well educated you can find such persons also in finance world bankers etc and not everyone of them become murderers though they literally can not feel emotions such as love, compassion etc  A psychopath can marry for economical gain and/or sexual lust of course and they learn to mimic emotions fairly well i.e they can say "I love you" although they don't.

Robert Kioysaki advice is more for the bold and risktakers and those who have already done the first babystep advices of David Ramsey. David Ramsey is also very USA oriented much of his ramblings of 401k etc has nothing to do with Europe where I live.


« Last Edit: May 15, 2015, 07:10:05 AM by Landlord2015 »

cerebus

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Re: Dave Ramsey advice that pisses me off
« Reply #28 on: May 15, 2015, 07:13:26 AM »
Robert Kioysaki advice is more for the bold and risktakers and those who have already done the first babystep advices of David Ramsey. David Ramsey is also very USA oriented much of his ramblings of 401k etc has nothing to do with Europe where I live.

Robert Kiyosaki's advice is often borderline illegal, his stories are completely apocryphal, and his company recently went bankrupt.

Landlord2015

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Re: Dave Ramsey advice that pisses me off
« Reply #29 on: May 15, 2015, 07:17:29 AM »
Robert Kioysaki advice is more for the bold and risktakers and those who have already done the first babystep advices of David Ramsey. David Ramsey is also very USA oriented much of his ramblings of 401k etc has nothing to do with Europe where I live.

Robert Kiyosaki's advice is often borderline illegal, his stories are completely apocryphal, and his company recently went bankrupt.
There took less then one minute to find one hater here:)

David Ramsey is CHICKEN advice there you go lol. Smart and wise advice, but not bold lol. However the part don't use your credit card etc pretty common sense.

I take the good parts of both of them and Robert Kioysaki is a multimillionaire. So what if one of his companies went bankrupt he is still a millionaire. Now I would not pay for his expensive courses, but seeing youtube videos or reading a book lent from library cost nothing.
« Last Edit: May 15, 2015, 07:20:26 AM by Landlord2015 »

cerebus

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Re: Dave Ramsey advice that pisses me off
« Reply #30 on: May 15, 2015, 07:19:38 AM »
Robert Kioysaki is a multimillionaire.

He is a millionaire personal finance guru. There's scanty evidence that any of his other 'ventures' made any money at all.

Landlord2015

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Re: Dave Ramsey advice that pisses me off
« Reply #31 on: May 15, 2015, 07:22:40 AM »
Robert Kioysaki is a multimillionaire.

He is a millionaire personal finance guru. There's scanty evidence that any of his other 'ventures' made any money at all.
He has not published a financial record that is true, but he has made lots of real estate investments that is know fact and he has been landlord.

Now I am landlord, but I don't own so much property as Robert Kioysaki and I am not a millionaire.

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Re: Dave Ramsey advice that pisses me off
« Reply #32 on: May 15, 2015, 07:26:44 AM »
HOWEVER - the one item that never ceases to rub me the wrong way is when DR tells someone that you should never, under any circumstances, help to pay off someone's debt unless you are married. He says that it is not your responsibility until "I do". To me this is BS! My girlfriend, who is debt free, is also helping me pay down my debt because she understands that the quicker we can pay my loans off, the sooner we will be able to do other things that we want to such as travel. Dave always explains these scenarios as a lost cause because at any point the person can walk away from you and you have been wasting your money by helping pay down the debt.


I have to agree with DR here.  If you girlfriend wants to pay off your debt so that you can travel, it would make more sense to me that she pays for you to travel with her. At least that way she gets something out of it.   If you were married, your debt becomes her debt (in most states), so I can see the benefit of her paying it off.


For me- the advice I cannot stand is that credit cards are terrible and no one should ever use them.  SOME people cannot be trusted with credit cards.  For others they are an incredible tool.  I spent cash so much more easily than credit cards.  Put $100 in my wallet and it is gone and I have no idea what it went on.  A credit card I see an itemized list of exactly what I spent and control my spending so much better.  So I NEVER carry cash. Too easy to just buy little things here and there and not think about how quickly they add up.

boyerbt

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Re: Dave Ramsey advice that pisses me off
« Reply #33 on: May 15, 2015, 10:35:44 AM »
HOWEVER - the one item that never ceases to rub me the wrong way is when DR tells someone that you should never, under any circumstances, help to pay off someone's debt unless you are married. He says that it is not your responsibility until "I do". To me this is BS! My girlfriend, who is debt free, is also helping me pay down my debt because she understands that the quicker we can pay my loans off, the sooner we will be able to do other things that we want to such as travel. Dave always explains these scenarios as a lost cause because at any point the person can walk away from you and you have been wasting your money by helping pay down the debt.


I have to agree with DR here.  If you girlfriend wants to pay off your debt so that you can travel, it would make more sense to me that she pays for you to travel with her. At least that way she gets something out of it.   If you were married, your debt becomes her debt (in most states), so I can see the benefit of her paying it off.


My girlfriend is not paying off my debt, She is simply helping. Over the last 17 months since beginning to get serious with paying down the  debt we have knocked out $31,000 out of $83,000. Out of that total $31,000, my girlfriend has given me roughly $2,600 so I feel that those saying that she is paying down my debt are incorrect.

Also, I would feel worse about letting my girlfriend pay for an entire trip to wherever while I am still so far into debt than having her chip in on paying down the loans. This seems very unmustachian, even if it costs me $0. We are always trying to reduce our spending so that we can throw more at debt and taking a trip now seems very frivolous.

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Re: Dave Ramsey advice that pisses me off
« Reply #34 on: May 15, 2015, 10:50:57 AM »
Money is fungible and so on.

Semi-related story - my now MIL was giving my then fiancee flack because "he just wants you to pay his mortgage for him" over a $400 / month "rent" payment she was making to me when she moved in about a year before we were married.  Nevermind the mortgage, condo fees, utilities, cable, and internet added up to more than $800 / month.  Or that she moved from an apartment where she was paying $700 / month + utilties, cable, internet, so this was cheaper than her original housing arrangement.

I thought it was odd because I'm not the first dude my wife has shared an apartment with, and some kind of arrangement as to paying housing costs and utilities and stuff must have been made before.  Probably just another chance for MIL to say "I don't approve of this lifestyle" - no reason to think she wasn't getting flack for that with prior boyfriends too.

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Re: Dave Ramsey advice that pisses me off
« Reply #35 on: May 15, 2015, 10:54:50 AM »

He's a Christian, gives Christian advice, and the Bible is rather clear on supporting your local church.

So, yeah, it's decent advice from his perspective and from the perspective of a lot of his listeners.

Just because the MMM groupthink hates religion and charity doesn't mean everyone does...

He gives Christian advice to Christians... which seems (sort of) reasonable. 

I've heard him talk to an open atheist and he immediately switched off the Christian mode.  He said something along the lines of "When I'm talking to other Christians, I'd say XX, but that doesn't apply here so..."

This actually moved him a notch up in my view.

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Re: Dave Ramsey advice that pisses me off
« Reply #36 on: May 15, 2015, 10:55:18 AM »

For me- the advice I cannot stand is that credit cards are terrible and no one should ever use them.  SOME people cannot be trusted with credit cards.  For others they are an incredible tool. 
I agree with you here.

The other advice of DR's I cannot stand is how he encourages people with several different kinds of debt to pay of the one with the smallest balance first, so it can 'snowball'.  Whaa?  For example, if you have a SL of $2k at 3.5%, a $9k car loan at 5% and a $22k cc at 21%, he pushes people to pay off the SL first, just because it is smaller. Mathematically the wrong answer.

He used to make my blood boil, but I've seen several people be helped by his methods (which are largely psychologically based), so I've tempered quite a bit.  If he helps people that's great.  But once you have your economic emotions under control his advice is not too good.

Also hate his reliance on mutual funds (kickbacks?) and never using debt as a useful tool.  I also don't personally believe in the 'never loan a bf/gf money until you are married" because it places a lot of assumptions both on marriage/divorce and on the idea that long-term partners should get married. 

rob in cal

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Re: Dave Ramsey advice that pisses me off
« Reply #37 on: May 15, 2015, 10:55:51 AM »
I listen to DR alot while working and while his advice is often too simplistic, it has helped many people totally change their finances for the better.  On this and other threads people have mentioned his talking about his daughter's sex life.  I'm intrigued by this as I've never heard him talk about this at all, but only hear about a third of his show.  What exactly does he refer to about this on nationwide radio?

oldmannickels

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Re: Dave Ramsey advice that pisses me off
« Reply #38 on: May 15, 2015, 11:02:46 AM »
HOWEVER - the one item that never ceases to rub me the wrong way is when DR tells someone that you should never, under any circumstances, help to pay off someone's debt unless you are married. He says that it is not your responsibility until "I do". To me this is BS! My girlfriend, who is debt free, is also helping me pay down my debt because she understands that the quicker we can pay my loans off, the sooner we will be able to do other things that we want to such as travel. Dave always explains these scenarios as a lost cause because at any point the person can walk away from you and you have been wasting your money by helping pay down the debt.


I have to agree with DR here.  If you girlfriend wants to pay off your debt so that you can travel, it would make more sense to me that she pays for you to travel with her. At least that way she gets something out of it.   If you were married, your debt becomes her debt (in most states), so I can see the benefit of her paying it off.


My girlfriend is not paying off my debt, She is simply helping. Over the last 17 months since beginning to get serious with paying down the  debt we have knocked out $31,000 out of $83,000. Out of that total $31,000, my girlfriend has given me roughly $2,600 so I feel that those saying that she is paying down my debt are incorrect.

Also, I would feel worse about letting my girlfriend pay for an entire trip to wherever while I am still so far into debt than having her chip in on paying down the loans. This seems very unmustachian, even if it costs me $0. We are always trying to reduce our spending so that we can throw more at debt and taking a trip now seems very frivolous.

Just get married, controversy over.

I listened to that call. That guy was pretty screwed. $0 savings, living off SS with a paid for house. It's not a good idea to put him in contact with people who run sophisticated financial products with lots of gotchas.

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Re: Dave Ramsey advice that pisses me off
« Reply #39 on: May 15, 2015, 11:23:06 AM »
I listen to DR from time to time mostly to hear the different people do their DFS and hear about how they have pulled themselves out of debt. Because I am in the process of paying off my student loans (step 2 in DR's plan) I find their stories to be somewhat motivating and a part of me wants to call in a do it as well once I am out of debt.

HOWEVER - the one item that never ceases to rub me the wrong way is when DR tells someone that you should never, under any circumstances, help to pay off someone's debt unless you are married. He says that it is not your responsibility until "I do". To me this is BS! My girlfriend, who is debt free, is also helping me pay down my debt because she understands that the quicker we can pay my loans off, the sooner we will be able to do other things that we want to such as travel. Dave always explains these scenarios as a lost cause because at any point the person can walk away from you and you have been wasting your money by helping pay down the debt.

 Not a huge vote of confidence for all of these relationships....

Your girlfriend is not thinking clearly at all...DR is completely correct that you only gift money.

If she is helping you with debt, she may be thinking this is a very long term relationship, but as in any arrangement, you don't pay until the contract is in place.  If this was a business friend, she would demand a contract with terms beneficial to her.
   
She would be much better off just saving the money, and then treating the both of you to a vacation as a gift to you.

nereo

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Re: Dave Ramsey advice that pisses me off
« Reply #40 on: May 15, 2015, 11:25:46 AM »
[snip]
Just get married, controversy over.
Common' man... not everyone wants to get married, and not everyone who wants to get married can. 
Furthermore, of the people that are married, not all of them can be trusted.  Look at how many keep bank accounts or debt hidden from their spouses, how many struggle with addiction, how many just have extremely poor financial skills.
Marriage is a poor indication of whether you should or should not lend someone money.

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Re: Dave Ramsey advice that pisses me off
« Reply #41 on: May 15, 2015, 11:31:35 AM »
The other advice of DR's I cannot stand is how he encourages people with several different kinds of debt to pay of the one with the smallest balance first, so it can 'snowball'.  Whaa?  For example, if you have a SL of $2k at 3.5%, a $9k car loan at 5% and a $22k cc at 21%, he pushes people to pay off the SL first, just because it is smaller. Mathematically the wrong answer.

Yes - it's mathematically "wrong," but if it helps people start the process of getting out of debt, and they are actually managing to dig their way out and haven't been able to before, then it works better than advice that is "optimal" and isn't followed because "I've not making progress against $22k" and they give up.

"Financially sub-optimal advice that works" is better than "financially optimal advice that gets ignored."

Dave Ramsey deals with people whose hair is on fire.  He's not that useful for people who are already well on their way to FI, but he's sure good at pointing people in that direction and helping them take the first steps.

Quote
I also don't personally believe in the 'never loan a bf/gf money until you are married" because it places a lot of assumptions both on marriage/divorce and on the idea that long-term partners should get married.

... you do recall he's a Christian, giving Christian advice, yes?

I didn't pay for any of my fiancee's debts (not bad, maybe $10k total in student loans and a car payment) until after we were married and they were "our" debts.  Then we knocked them out with my bonus check.

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Re: Dave Ramsey advice that pisses me off
« Reply #42 on: May 15, 2015, 11:34:14 AM »
I think Dave Ramsey's advice on living below your means and avoiding debt -- IMO these are good pointers for the mass.  But I was already doing that and I wished I would have not taken his advice on paying off debt when my interest rate at 3.0% was so low.  If I didn't pay off my mortgage and used  and put the money into a vanguard mutual fund I would probably be up $30k in net worth these past few years.

Granted living debt free is a great feeling and the mass should appeal to many of his ideals.  But I think some people like myself get tired of his message and want something more. 

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Re: Dave Ramsey advice that pisses me off
« Reply #43 on: May 15, 2015, 11:38:12 AM »
But I think some people like myself get tired of his message and want something more.

You.  Are.  Not.  His.  Target.  Audience.

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Re: Dave Ramsey advice that pisses me off
« Reply #44 on: May 15, 2015, 12:01:52 PM »
"Financially sub-optimal advice that works" is better than "financially optimal advice that gets ignored."

Dave Ramsey deals with people whose hair is on fire.  He's not that useful for people who are already well on their way to FI, but he's sure good at pointing people in that direction and helping them take the first steps.

As I said, I've seen him help people, so my opinion has tempered somewhat.  It's still advice that I abhor, and in many cases can be counter-productive.

Quote
... you do recall he's a Christian, giving Christian advice, yes?
that's what bothers me most about it - I don't see this as being very Christian advice, and I am a Christian.  I simply believe that you shouldn't exclude helping people financially based on matrimony.  I also don't believe loaning money to a spouse is always the right thing to do. 

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Re: Dave Ramsey advice that pisses me off
« Reply #45 on: May 15, 2015, 12:18:35 PM »
that's what bothers me most about it - I don't see this as being very Christian advice, and I am a Christian.  I simply believe that you shouldn't exclude helping people financially based on matrimony.  I also don't believe loaning money to a spouse is always the right thing to do.

The very concept of "Loaning money to a spouse" is absurd - your finances are combined, for better or for worse, when you get married.

I don't think he's against giving to help people out, but paying off a boyfriend/girlfriend's debts is still pretty silly unless you are just viewing it as a gift with no strings attached.

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Re: Dave Ramsey advice that pisses me off
« Reply #46 on: May 15, 2015, 12:24:52 PM »
I used to think his advice was pretty good, even though the only debt I've ever had was student loans years ago. But I got a bit fixated on the simplicity of his 7 baby steps and built an emergency fund that I now consider too large. I also got too content with saving 10% (plus 9% to work pension and 6% matching from employer). Fortunately, I did realize that our mortgage rate was too low to be too concerned about it and that our money would work harder for us being invested. I'm so glad I found MMM and other blogs that made me realize I could be saving more and achieving financial independence sooner. I think for the average person who is struggling with debt, his approach can help improve lives. But more needs to be done for those interested in building wealth.

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Re: Dave Ramsey advice that pisses me off
« Reply #47 on: May 15, 2015, 12:27:06 PM »
that's what bothers me most about it - I don't see this as being very Christian advice, and I am a Christian.  I simply believe that you shouldn't exclude helping people financially based on matrimony.  I also don't believe loaning money to a spouse is always the right thing to do.

The very concept of "Loaning money to a spouse" is absurd - your finances are combined, for better or for worse, when you get married.
This is not always the case, as is evident in the number of people who choose to keep their finances separate even after decades of marriage.  It's not the route we took, but it is quite common.

Quote
I don't think he's against giving to help people out, but paying off a boyfriend/girlfriend's debts is still pretty silly unless you are just viewing it as a gift with no strings attached.
I think this has to be a case-by-case judgement.  I've seen many instances of an affluent person helping out their partner  - often by taking over payment of their monthly loan payments.  In every relationship there is give-and-take, and it's up to the individuals to decide.  Fundamentally, I don't see how this is different from moving into your partner's home without paying rent. 

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Re: Dave Ramsey advice that pisses me off
« Reply #48 on: May 15, 2015, 12:47:47 PM »
I think Dave Ramsey's advice on living below your means and avoiding debt -- IMO these are good pointers for the mass.  But I was already doing that and I wished I would have not taken his advice on paying off debt when my interest rate at 3.0% was so low.  If I didn't pay off my mortgage and used  and put the money into a vanguard mutual fund I would probably be up $30k in net worth these past few years.

Granted living debt free is a great feeling and the mass should appeal to many of his ideals.  But I think some people like myself get tired of his message and want something more.

The problem with DR is that he's not really qualified to say anything more, but he still does.  Your own ancedote is proof of that.

TheOldestYoungMan

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Re: Dave Ramsey advice that pisses me off
« Reply #49 on: May 15, 2015, 12:55:44 PM »
... with any remaining money now unprotected from Medicaid seizure to pay for her long term care....

Medicaid will put a lean on the house, so it's not really protected.  I suppose if you got better the house would still be there to use, if that's what you meant.  My grandpa didn't get better, all that was left of his 450k house when medicaid got done was about 60k.  92 years old and he died of what amounts to natural causes.  You really want a zero balance sheet before you enter into that cesspool of TLC.  This has led to my parent's standing instructions of "as soon as we're old enough so nobody's asking questions, just smother us."

I hate his whole tithe advice too. Ass over head in debt? Tithe because the church is always the answer! Always! Not sure how the church is going to solve a person's financial problems, but okay. Nearly all of Ramsey's advice is poor outside of the few rather obvious claims he makes.

Struggling to figure out how to meet my 10% obligation to charity is what first prompted me to start a budget.  I'm sure there's a bit of trying to find meaning amid the chaos in that, but there's no way someone is going to set aside 10% for charity without budgeting for it, and I can personally attest that it's led me to save far more than I ever gave away.  Also the positive benefits of that giving sold me on the idea that there is something out there that can make me happier than more stuff will.  And that led me to the possibility of financial independence.

The conversation went like
Me:  "No way can I just give away 10%, that's way too much." 
Catholic co-worker:"Well, how much can you give away?" 
Me:  "Umm, I don't know, you want like a %?" 
Ccw:"You not knowing is why you can't give away 10%, it has nothing to do with how much you make, or how much you have left over."
Ccw: "The issue isn't with giving 10%, the issue is that many people give nothing.  Not because they don't have enough, but because despite having far more than enough, they spend even more."

An accomplished, educated, humble, intelligent man speaking in a reasonable tone to someone 20 years his junior.  I'll always remember this conversation, it happened at a Taco Cabana on the northwest side of Houston.  There were about a million different things that clicked in my head all at once, from finance classes, from talking to rich people, from talking to poor people, how my parents grew up, how their siblings lived, I mean everything.  Prior to this I saved, but in a sort of reckless, out of control, "saving money is good" sort of a way.  I had never paid attention to it before.

The religious obligation to give 10% to charity is 100% about living below your means.  By definition, in the word, in the spirit, and in actual practice.  The non-religious looking in focus on who is receiving that charity, instead of who is providing it.  I have never attended a church that even suggested tithing (as I understand it, catholics are pretty big on it.  As I've gotten older, alot of the catholic stuff seems to really just be about efficiency in religion, so my rage has settled quite a bit).  "You need to be doing this for yourself, for your family.  You can give the money to us, or you can give it to any cause you wish, but you must give it away."

More than one road can take you where you want to go.  Just because you got there another way doesn't mean this isn't a tried and true tactic.

Rage at DR about any particular piece of advice I think would be equivalent to rage at MMM about spending money on beer being OK.  You're sort of missing the overall message.