Author Topic: What is your opinion of Dave Ramsey?  (Read 16839 times)

swampwiz

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What is your opinion of Dave Ramsey?
« on: March 13, 2018, 02:01:40 AM »
I must admit that being the cheapskate that I am, I like the way that he scolds his callers to be cheap so that they can do a "debt snowball" and get out of the hole.  Of course, I don't care for his moralizing over folks who chose the bankruptcy option; I myself take the Trumpian attitude that bankruptcy is a *legal* not a *moral* question, and that if the opportunity presents itself such that the total financial position is better after filing for bankruptcy, then it is the proper course of action.

https://www.politico.com/magazine/story/2018/03/11/radio-dave-ramsey-2018-trump-217229
« Last Edit: March 14, 2018, 07:58:46 AM by swampwiz »

nemesis

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Re: What is your opinion of Dave Ramsey?
« Reply #1 on: March 13, 2018, 02:04:26 AM »
His advice is solid but simple.  It's good for people who don't understand basic finance and lack money management skills (most people).

For those who are more finance savvy, his advice is low grade stuff.

It is a crime that basic finance management is not taught in high schools.
« Last Edit: March 13, 2018, 02:06:01 AM by nemesis »

kayvent

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Re: What is your opinion of Dave Ramsey?
« Reply #2 on: March 13, 2018, 07:49:40 AM »
I have a stronger opinion about people's opinions of Dave Ramsey than Dave Ramsey himself.

I think people get too analytical when criticizing Dave Ramsey's techniques. I've often heard people criticize that the debt snowball is inefficient from a mathematical prospective. Dave's retort is that math flew out the window when you put 30K on a CC. My retort is that I've done the math with the numbers of some people who call Dave and, well, the difference between the debt avalanche and debt snowball is sometimes a matter of days in the calculation1. If the snowball will give someone a higher likelihood to succeed (which Ramsey & others argue), that marginal difference is a wash.

I find there are other areas, that don't significantly matter, that people like to disagree about but that beyond a surface level are not worthwhile dissensions. Although I do feel he is out to lunch on mutual fund returns.

I like his advice about house mortgage payments; no more than 25% of your take home pay2. I recently found out that in the USA, y'all can get mortgages up to 45% of your gross pay! That is 100% gross. I think the fact that so many people are house poor with long-term mortgages that had low down payments, causes a bunch of issues in society.

1 Typical person following Dave's advice has a sub two-year payoff period. In those timelines, for the avalanche approach to diverge greatly, it requires the highest interest debt(s) to be large, unsecured, a large share of the debt, a much higher interest rate and the smaller debts to be numerous or large. I'd not be surprised to hear these cases (ex. 40K CC debt @26% + 39K student loan @3.9%) but from the calls I've heard, the debts tend to be similar interest rates of similar amounts or high interest rates on small amounts and small interest rates on large amounts.
2 I actually don't know what he means by this though; whether it is literally the money deposited or one's after-tax income (this can change if a person does 401K/RRSP contributions through work.) His advice is somewhat vague on defining terms.
« Last Edit: March 13, 2018, 07:55:28 AM by kayvent »

ketchup

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Re: What is your opinion of Dave Ramsey?
« Reply #3 on: March 13, 2018, 08:14:14 AM »
He can be helpful for people at the "get out of debt" stage of personal finance.  His investment advice is really bad.  And the Christ-y shit isn't for everyone.

mathlete

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Re: What is your opinion of Dave Ramsey?
« Reply #4 on: March 13, 2018, 08:21:12 AM »
In my earliest days of perusing internet personal finance communities (probably around 2008-2009), I remember Suze Orman v. Dave Ramsey being a big debate among people.

Dave wants you to not leverage debt, and take a counter-intuitive approach to paying it off. Suze wants you to attack high interest rates, but also worship at the altar of the FICO Gods. Both want to sell you books and seminars. Bot give advice that would probably help the layman if followed.

I'm biased against Dave because I believe that most people who incorporate religion that much are usually charlatans on some level. His stuff is kind of sales-pitchy, but I don't find the core content to actually be all that objectionable.

Milizard

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Re: What is your opinion of Dave Ramsey?
« Reply #5 on: March 13, 2018, 09:16:49 AM »
My impression is that his advice in a general sense is not bad, but leads people astray when they ask specific questions that could be best answered by straying from his general advice. He just doesn't.  This sometimes leads to horrible advice given to people with very specific circumstances,  such as advising someone to cash out a whole life policy, when the person lucked out by getting the policy at a time when the guaranteed return was outstanding by today's measures. Yes, it was dumb luck,  but don't throw that away!

jlcnuke

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Re: What is your opinion of Dave Ramsey?
« Reply #6 on: March 13, 2018, 09:35:23 AM »
His advice is great for his intended audience (people with little financial self-control and little understanding of finances/numbers who won't really change either of those characteristics much). Beyond that, some of the stuff he says is spot on and some of it is crap.

mathlete

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Re: What is your opinion of Dave Ramsey?
« Reply #7 on: March 13, 2018, 09:49:37 AM »
His advice is great for his intended audience (people with little financial self-control and little understanding of finances/numbers who won't really change either of those characteristics much). Beyond that, some of the stuff he says is spot on and some of it is crap.

Yeah, this is probably a good take.

There's little use in walking into a room full of high school students learning Newtonian Mechanics and being all like, "Actually, all of this is wrong if you want to get technical..."

Dave Ramsey's teachings do much more good than harm for his students I'm sure.

tomsang

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Re: What is your opinion of Dave Ramsey?
« Reply #8 on: March 13, 2018, 10:14:20 AM »
Dave Ramsey is designed for the stupid and lazy.  I think those in this category can get something out of him. 

Virtually everything that he says is financially wrong.

Pay off low rates debt first, cash out old whole life insurance policies, use his certified high price financial advisors, buy his crappy books/tapes, stocks go up by 12% a year, 8% Safe Withdrawal Rate, paying off a 4% 30 year fixed rate mortgage, etc.

I am sure there are lists of all the things that he says that are bad some are really bad.  8% Safe Withdrawal Rate will seriously F people up in the coming years.  He will be off the air after making 100's of million, when those followers realize that the stock market does not always deliver 12% gains and that it is not safe to withdraw 8% from your investment accounts. 

If you just need the face punches to stop buying stupid stuff, he provides this.  For anyone needing more than the very basics, understand that virtually everything he says is not financially optimal.     

Luck12

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Re: What is your opinion of Dave Ramsey?
« Reply #9 on: March 13, 2018, 10:18:15 AM »

Pay off low rates debt first, cash out old whole life insurance policies, use his certified high price financial advisors, buy his crappy books/tapes, stocks go up by 12% a year, 8% Safe Withdrawal Rate, paying off a 4% 30 year fixed rate mortgage, etc.

And that's why he's an unctuous charlatan.  Agree with the poster who said anyone incorporating that much Christianity is a charlatan. 

SC93

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Re: What is your opinion of Dave Ramsey?
« Reply #10 on: March 13, 2018, 10:26:51 AM »
I was Dave Ramsey before Dave was Dave Ramsey. Unlike him, I've never had debt and never filed bankruptcy. I'm almost 53 years old. He has a GREAT plan for those in debt and it IS working. I tell people to listen and follow his plan and when the starts talking churchy just ignore that part. He brings up some good points yet sometimes I think he has been drinking because I don't agree at all. People might do things different than him but I bet if a person did everything exactly like Dave says, you WILL be a millionaire..... who can deny that? It might not be the way YOU think it should be done but those dollars WILL add up doing things exactly his way.

By the way.... if you don't know what he says, don't make an a$$ out of yourself and quote him wrong. He does not say stocks go up 12% all the time. Also, do you have more money than him? And when getting out of debt.... throw away the calculator.

Some like risk, some of us don't. See where you are when risk gets the best of you. I bet you won't be here boasting.....
« Last Edit: March 13, 2018, 10:29:46 AM by SC93 »

Chadbert

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Re: What is your opinion of Dave Ramsey?
« Reply #11 on: March 13, 2018, 10:34:51 AM »
My boss was just talking to me this morning about Dave Ramsey, he had just listened to his audio book, I believe it was one of the Financial Peace books. 
My view is that Dave Ramsey is great for beginners, his advice is what got me to start getting serious about paying off debt and staying out of debt.  The first three baby steps are great advice, with one caveat, he should encourage people to always be putting into a 401k type retirement at least enough to get a full company match, and if there is no match, around 3% pre tax into the 401k will not change the take home pay enough to matter on the debt snow ball.
After an emergency fund is built, his advice falls apart, but by that that time I was well on my way to making smarter financial choices.  I still made a few mistakes, but even the POS car I over spent on was paid for in cash, and it was replaced with two vehicles for under $1,500.

mathlete

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Re: What is your opinion of Dave Ramsey?
« Reply #12 on: March 13, 2018, 10:36:43 AM »
Also, do you have more money than him? And when getting out of debt.... throw away the calculator.

I don't like that rubric for evaluating advice. Dave Ramsey didn't get as rich as he did by following his own advice, he got rich by selling it. That doesn't mean the advice is bad necessarily, but we shouldn't be conflating profits from the sales of the book with profits from following the book's advice.

Unless the book advises you to become a mega-successful and internationally renowned thought leader.

Slee_stack

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Re: What is your opinion of Dave Ramsey?
« Reply #13 on: March 13, 2018, 10:52:00 AM »
I was Dave Ramsey before Dave was Dave Ramsey. Unlike him, I've never had debt and never filed bankruptcy. I'm almost 53 years old. He has a GREAT plan for those in debt and it IS working. I tell people to listen and follow his plan and when the starts talking churchy just ignore that part. He brings up some good points yet sometimes I think he has been drinking because I don't agree at all. People might do things different than him but I bet if a person did everything exactly like Dave says, you WILL be a millionaire..... who can deny that? It might not be the way YOU think it should be done but those dollars WILL add up doing things exactly his way.

By the way.... if you don't know what he says, don't make an a$$ out of yourself and quote him wrong. He does not say stocks go up 12% all the time. Also, do you have more money than him? And when getting out of debt.... throw away the calculator.

Some like risk, some of us don't. See where you are when risk gets the best of you. I bet you won't be here boasting.....
What is that supposed to mean?  Credentialism?  If I own a string of Payday loan stores, should you take financial advice from me versus anyone else?

Must one be an Astronaut to talk about Space?

Apple_Tango

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Re: What is your opinion of Dave Ramsey?
« Reply #14 on: March 13, 2018, 11:18:27 AM »
I love listening to him for entertainment. Some of the callers that come in need some serious facepunches and Dave can give em out. Only things he doesn't mess with are having children pretty much whenever you want, women quitting their jobs to become SAHMs while the family is in lots of debt, and MLM schemes ...any statement even lightly against those three things would upset a lot of his base.

He sounds like a bit of a control freak, like if you don't believe exactly what he believes then you're not going to be successful.

« Last Edit: March 13, 2018, 08:14:51 PM by Apple_Tango »

Sayonara925

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Re: What is your opinion of Dave Ramsey?
« Reply #15 on: March 13, 2018, 11:20:38 AM »
Ever notice how he shifts from his usual condescending tone when speaking with most callers, then shifting to upbeat positive enthusiastic excited happy Dave tone during the 'debt-free-scream' segments?  So phony...

jax8

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Re: What is your opinion of Dave Ramsey?
« Reply #16 on: March 13, 2018, 11:36:49 AM »
Only things he doesn't mess with are having children pretty much whenever you want, women quitting their jobs to become SAHMs while the family is in lots of debt, and MLM schemes ...any statement even lightly against those three things would upset a lot of his base.


I heard him break down the costs behind a mother going to work, and he stated that unless Mom makes upwards of $40,000 it's not worth the daycare/clothes/transportation costs for her to go back to work.  It makes more financial sense for her to stay home with the kids.

While I don't agree with him (Lost 401K contributions? Lost experience? Lost CEUs? Re-entering an industry with skills that are 5 years or more behind?) I appreciated that he encouraged couples to step back and actually do the math and work smarter, not harder.

v8rx7guy

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Re: What is your opinion of Dave Ramsey?
« Reply #17 on: March 13, 2018, 12:13:15 PM »
I appreciate his message... I actually teach his class, "Financial Peace University".  It brings me so much joy to see the light bulbs turn on for people and watching them get on fire for putting their families into strong financial positions, he is an excellent motivational speaker in that way.  My take on his message is that it is a super conservative path that makes it nearly impossible to screw up.  It is the message that is needed for 90% of Americans today.  It is not ideal, but it doesn't have to be absolutely positively ideal for the average person to turn themselves from the path of financial destruction to the path of financial success.

I chose to take it a step further personally, and that's how I ended up in the MMM world.  In reality, the MMM message is pretty simple too, right?  Cut your spending and invest in low cost index funds.  Both DR and MMM teach simple methods to conquer complicated problems, and that's why they are so successful.

I think that a lot of people here would have to admit that their financial interest started with Dave Ramsey.  I hear it often from the "big name" FI podcasts, so I know it must be just as common around here.

Milizard

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Re: What is your opinion of Dave Ramsey?
« Reply #18 on: March 13, 2018, 12:30:04 PM »
I appreciate his message... I actually teach his class, "Financial Peace University".  It brings me so much joy to see the light bulbs turn on for people and watching them get on fire for putting their families into strong financial positions, he is an excellent motivational speaker in that way.  My take on his message is that it is a super conservative path that makes it nearly impossible to screw up.  It is the message that is needed for 90% of Americans today.  It is not ideal, but it doesn't have to be absolutely positively ideal for the average person to turn themselves from the path of financial destruction to the path of financial success.

I chose to take it a step further personally, and that's how I ended up in the MMM world.  In reality, the MMM message is pretty simple too, right?  Cut your spending and invest in low cost index funds.  Both DR and MMM teach simple methods to conquer complicated problems, and that's why they are so successful.

I think that a lot of people here would have to admit that their financial interest started with Dave Ramsey.  I hear it often from the "big name" FI podcasts, so I know it must be just as common around here.
90% really, 90%?

v8rx7guy

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Re: What is your opinion of Dave Ramsey?
« Reply #19 on: March 13, 2018, 12:42:57 PM »
I appreciate his message... I actually teach his class, "Financial Peace University".  It brings me so much joy to see the light bulbs turn on for people and watching them get on fire for putting their families into strong financial positions, he is an excellent motivational speaker in that way.  My take on his message is that it is a super conservative path that makes it nearly impossible to screw up.  It is the message that is needed for 90% of Americans today.  It is not ideal, but it doesn't have to be absolutely positively ideal for the average person to turn themselves from the path of financial destruction to the path of financial success.

I chose to take it a step further personally, and that's how I ended up in the MMM world.  In reality, the MMM message is pretty simple too, right?  Cut your spending and invest in low cost index funds.  Both DR and MMM teach simple methods to conquer complicated problems, and that's why they are so successful.

I think that a lot of people here would have to admit that their financial interest started with Dave Ramsey.  I hear it often from the "big name" FI podcasts, so I know it must be just as common around here.
90% really, 90%?

You got a better estimate?  50% of Americans are living paycheck to paycheck.  60% can't cover a $500 surprise expense without taking on debt.  Average household credit card debt is $15K.  Don't even get me started with how much people have saved for retirement.  I think it's safe to say 9/10 Americans could benefit from his message, but go ahead and debate me on that.

boarder42

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Re: What is your opinion of Dave Ramsey?
« Reply #20 on: March 13, 2018, 12:47:37 PM »
he's good for getting people out of debt - though he's inefficient as shit at it

his investing advice is crap

He's like preschool for the financial world - here is how you sit in a circle and get in a line and write your name. 

Really we should teach finance in school but its just too touchy a subject for far too many.

tomsang

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Re: What is your opinion of Dave Ramsey?
« Reply #21 on: March 13, 2018, 12:49:51 PM »
he's good for getting people out of debt - though he's inefficient as shit at it

his investing advice is crap

He's like preschool for the financial world - here is how you sit in a circle and get in a line and write your name. 

Really we should teach finance in school but its just too touchy a subject for far too many.

His website also looks a bit more shady than my local used car lot.  For a good Christian, he sure knows how to fleece the flock.

Michael in ABQ

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Re: What is your opinion of Dave Ramsey?
« Reply #22 on: March 13, 2018, 12:55:00 PM »
I appreciate his message... I actually teach his class, "Financial Peace University".  It brings me so much joy to see the light bulbs turn on for people and watching them get on fire for putting their families into strong financial positions, he is an excellent motivational speaker in that way.  My take on his message is that it is a super conservative path that makes it nearly impossible to screw up.  It is the message that is needed for 90% of Americans today.  It is not ideal, but it doesn't have to be absolutely positively ideal for the average person to turn themselves from the path of financial destruction to the path of financial success.

I chose to take it a step further personally, and that's how I ended up in the MMM world.  In reality, the MMM message is pretty simple too, right?  Cut your spending and invest in low cost index funds.  Both DR and MMM teach simple methods to conquer complicated problems, and that's why they are so successful.

I think that a lot of people here would have to admit that their financial interest started with Dave Ramsey.  I hear it often from the "big name" FI podcasts, so I know it must be just as common around here.
90% really, 90%?

What percentage of people buy brand new vehicles and go most of their life with a car payment? I see guys in my National Guard unit talking about their $30-50k trucks and the payments are well over $500 per month when they would get the exact same utility out of a 5-10 year old vehicle for a fraction of the price. And they probably aren't utilizing the truck for more than commuting 95% of the time which makes it even more absurd to buying a car. Most people make a lot of poor financial decisions. Look at the amount of outstanding consumer credit (about a trillion currently) or the amount of outstanding student loans (over a trillion). Going $50k into student loan debt to get a bachelors' degree in early childhood education or sociology, or anthropology, so you can make $35k a year is not a good return on investment. If that same student loan debt gets you into a $70k a year engineering job then it was probably worth it, though I would argue most college students (and their parents) take on student debt far too easily when they could be spending time trying to earn scholarships or working to cash flow more of the cost. Or for that matter not attend an out of state school at twice the cost since aside from a few top tier schools nobody after your first employer gives a damn about where you went to college or what your GPA was.



Dave Ramsey motived my wife and I to get out of debt. Making about $60-65k a year we paid off about $40k in just over 2.5 years. Student loans that we'd never made much progress on over 7-8 years after graduation, credit card debt from living just beyond our means for a few years while I was in a low-paid apprenticeship type job (went from $30k to $50k+ once I was complete), and an auto loan for a minivan when our car got too small for our growing family. I didn't follow the plan exactly as I kept contributing the minimum to get my full 401k match. We've now saved up a $10k emergency fund and are starting to save for a down payment on a house, though we need to pause for a bit to save up for a larger van as baby #6 is on the way and won't fit into our minivan.


I am still very debt averse in my personal life but I'm starting a small business on the side and I'm using some debt there in order to grow faster. If I were bootstrapping with cash alone the $500-$1,000 I set aside initially would not be enough for me to grow very much. By purchasing inventory on credit and turning it over multiple times per year I'm basically increasing my cost of goods sold by a few percent but double or tripling my overall growth.

Also, we probably won't stick exactly to his advice on buying a home with a 15-year mortgage at no more than 25% of take home pay. I still plan to pay down our house quickly instead of leveraging it to invest. Borrowing money at 5% to hopefully earn 10% may make sense from a mathematical perspective but there's a lot of risk there that I'm not willing to take on.

SwitchActiveDWG

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Re: What is your opinion of Dave Ramsey?
« Reply #23 on: March 13, 2018, 12:56:07 PM »
He is a sensationalist. He's the Joel Osteen of the finance world.

Google searching and learning some basic math would be better for someone wanting to learn about personal finance, investing, etc.

Michael in ABQ

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Re: What is your opinion of Dave Ramsey?
« Reply #24 on: March 13, 2018, 01:03:43 PM »
he's good for getting people out of debt - though he's inefficient as shit at it


Most people don't have $25,000 in credit card debit at 15-20% and $5k in student loan or auto debt at 5-7%. It's usually the other way around. Paying off small debts first, regardless if they're higher interest is more likely to result in a person getting out of debt than giving up part way through because they don't feel like they're making progress on a larger high interest debt.

Even if the numbers were reversed, if you're getting out of debt in 2-3 years that extra interest is not going to be a huge amount.

tomsang

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Re: What is your opinion of Dave Ramsey?
« Reply #25 on: March 13, 2018, 01:09:22 PM »
By the way.... if you don't know what he says, don't make an a$$ out of yourself and quote him wrong. He does not say stocks go up 12% all the time. Also, do you have more money than him? And when getting out of debt.... throw away the calculator.

Some like risk, some of us don't. See where you are when risk gets the best of you. I bet you won't be here boasting.....

Dave says it so much that he has a post on it.  He does not say 10%, 8% or anything else.

https://www.daveramsey.com/blog/the-12-reality

He also, pushes people into his ELP money making stream, and they are going to knock off 1% or more of this return.

His simple rules of thumb are simple.  They are fine, until someone decides to use them.  Like withdrawing 8% or any of his investment advice. 




boarder42

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Re: What is your opinion of Dave Ramsey?
« Reply #26 on: March 13, 2018, 01:13:57 PM »
he's good for getting people out of debt - though he's inefficient as shit at it


Most people don't have $25,000 in credit card debit at 15-20% and $5k in student loan or auto debt at 5-7%. It's usually the other way around. Paying off small debts first, regardless if they're higher interest is more likely to result in a person getting out of debt than giving up part way through because they don't feel like they're making progress on a larger high interest debt.

Even if the numbers were reversed, if you're getting out of debt in 2-3 years that extra interest is not going to be a huge amount.

its still inefficient as shit.

avg credit card debt in US 16k - at 15-20%
auto loans 25k at your 5-7% - really high assumption

dont train yourself to make emotional financial decisions thats what go you in debt in the first place
Train yourself to make mathematically optimal financial decisions.

boarder42

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Re: What is your opinion of Dave Ramsey?
« Reply #27 on: March 13, 2018, 01:18:38 PM »
By the way.... if you don't know what he says, don't make an a$$ out of yourself and quote him wrong. He does not say stocks go up 12% all the time. Also, do you have more money than him? And when getting out of debt.... throw away the calculator.

Some like risk, some of us don't. See where you are when risk gets the best of you. I bet you won't be here boasting.....

Dave says it so much that he has a post on it.  He does not say 10%, 8% or anything else.

https://www.daveramsey.com/blog/the-12-reality

He also, pushes people into his ELP money making stream, and they are going to knock off 1% or more of this return.

His simple rules of thumb are simple.  They are fine, until someone decides to use them.  Like withdrawing 8% or any of his investment advice.

haha b/c his amount of amassed wealth thru scamming people into a bad investment system is proof he is good for the world.  Great point - Donald Trump is better for the world then!  We should follow the donald's investing advice since we're going off of amassed wealth - but wait Buffett has more - i'll stick to his investing advice.

craiglepaige

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Re: What is your opinion of Dave Ramsey?
« Reply #28 on: March 13, 2018, 01:26:49 PM »
Haven't listened to him in over 9 months. I used to listen on a weekly basis. The churchy stuff got annoying and his neverending infomercials just got insanely obnoxious.

Has he helped plenty? Sure.
Do I think he plays the Christian part to his monetary advantage? Definitely.

Not for me anymore.

https://forum.mrmoneymustache.com/welcome-to-the-forum/distancing-myself-from-ramseyism/msg1493218/#msg1493218

DreamFIRE

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Re: What is your opinion of Dave Ramsey?
« Reply #29 on: March 13, 2018, 04:27:06 PM »
he's good for getting people out of debt - though he's inefficient as shit at it

his investing advice is crap

He's like preschool for the financial world - here is how you sit in a circle and get in a line and write your name. 

I've never listened to or read Ramsey, but that makes me think of a lot of the opinionated stuff I see on this forum that I don't agree with, except we get the bad grammar to go with it here.  I mostly just ignore the B.S., but there's no filter for the average reader.  After all the opinions and bloviating, there's bound to be the rare nugget of useful information from time to time, and there's some entertainment value to be had here.  Just by coincidence, a girl at work told me about a week ago that she was going through some Dave Ramsey course.  I didn't give her any opinions on Dave Ramsey, since I don't even have any, but I was impressed she was actually taking the initiative to learn something.

e34bb098

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Re: What is your opinion of Dave Ramsey?
« Reply #30 on: March 13, 2018, 05:37:46 PM »
My brother got into him and enjoyed it.  He wasn't financially stupid but it helped focus him a little more than he was already.

I've never listened to or watched him, but I flipped through some of his books.  I agree that it's 101-level stuff.  However, if most people followed his advice, the resulting situation would be a lot better than the current one, even if people's lives wouldn't be as optimized as they could be.

Milizard

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Re: What is your opinion of Dave Ramsey?
« Reply #31 on: March 13, 2018, 05:45:22 PM »
I appreciate his message... I actually teach his class, "Financial Peace University".  It brings me so much joy to see the light bulbs turn on for people and watching them get on fire for putting their families into strong financial positions, he is an excellent motivational speaker in that way.  My take on his message is that it is a super conservative path that makes it nearly impossible to screw up.  It is the message that is needed for 90% of Americans today.  It is not ideal, but it doesn't have to be absolutely positively ideal for the average person to turn themselves from the path of financial destruction to the path of financial success.

I chose to take it a step further personally, and that's how I ended up in the MMM world.  In reality, the MMM message is pretty simple too, right?  Cut your spending and invest in low cost index funds.  Both DR and MMM teach simple methods to conquer complicated problems, and that's why they are so successful.

I think that a lot of people here would have to admit that their financial interest started with Dave Ramsey.  I hear it often from the "big name" FI podcasts, so I know it must be just as common around here.
90% really, 90%?

You got a better estimate?  50% of Americans are living paycheck to paycheck.  60% can't cover a $500 surprise expense without taking on debt.  Average household credit card debt is $15K.  Don't even get me started with how much people have saved for retirement.  I think it's safe to say 9/10 Americans could benefit from his message, but go ahead and debate me on that.
Well, since you have 50% and 60% figures at the ready, why don't you start with that instead of going for broke and making up a 90% figure?

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Re: What is your opinion of Dave Ramsey?
« Reply #32 on: March 13, 2018, 06:11:12 PM »
Well, since you have 50% and 60% figures at the ready, why don't you start with that instead of going for broke and making up a 90% figure?
I've noticed it's pretty common on forums for people to throw out phrases like "90% of the time" or "99% of the people" or even "99.999% of ..... "  when they're trying to make a point without having any facts to back it up.

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Re: What is your opinion of Dave Ramsey?
« Reply #33 on: March 13, 2018, 07:32:20 PM »
I once heard Dave Ramsey described as being similar to Weight Watchers. Weight Watchers is not going to take an obese person to a marathon-running nutritionist, but it is a great way to get started for people who don't know where to start and need a lot of structure and encouragement to get going. At a certain point, to make progress, you will need to go beyond the basic recommendations...but at that point you should feel confident and knowledgeable to make your own way.

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Re: What is your opinion of Dave Ramsey?
« Reply #34 on: March 13, 2018, 07:47:20 PM »
I once heard Dave Ramsey described as being similar to Weight Watchers. Weight Watchers is not going to take an obese person to a marathon-running nutritionist, but it is a great way to get started for people who don't know where to start and need a lot of structure and encouragement to get going. At a certain point, to make progress, you will need to go beyond the basic recommendations...but at that point you should feel confident and knowledgeable to make your own way.

I think that is a great analogy.  The slight difference is that people go to Weight Watchers to lose weight.  They pay money to do so. They know that they are paying money for help in losing weight.  Weight Watchers is not pushing food that is fattening for them to eat for a profit.

Dave Ramsey, is selling financial advice and he is getting people to buy products that are bad for their personal financial well being.  It is like he is pushing donuts and girl scout cookies, when he should be telling people to eat fruits and vegetables.  He is convincing people in bad financial shape to buy products through his show, website, and seminars.  He is pushing them into a network that gives Dave Ramsey a kickback.  He is selling them fluff, while he is making a killing. 

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Re: What is your opinion of Dave Ramsey?
« Reply #35 on: March 13, 2018, 07:53:59 PM »
"I am always looking for a DEAL.  A friend in the car business called m one day with a deal...on a Jaguar.  All those years and tears later - when driving a Jaguar was no longer the driving force behind my desire for a "high approval rating" - God sent a Jaguar back into my life" -Dave Ramsey

Hang on a sec, just threw up a bit in my mouth...

Ok, I can concentrate again.  Apparently the stuff we have or don't have in our live is based on what the creator of the universe gives us, which is apparently based on how this creature rates things like our "desires for approval". 

Using simple logic, if this is true, then the poor, sick, refugees, etc, must all just have their desires or whatever in the wrong place, right???  Maybe if they were good Christians like Dave Ramsey it would all just fall in place for them. 

My opinion of Dave Ramsey is low.  I think his financial advice is very meh, but that's not why my opinion of him is low.  I just hate that prosperity gospel bullshit. 

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Re: What is your opinion of Dave Ramsey?
« Reply #36 on: March 13, 2018, 08:38:13 PM »
I'm a big supporter of Dave Ramsey because he "helped" me pay off $80k of debt in one year and I've been living that debt-free life for two years now. I akin him to being the equivalent of a high school diploma in personal finance. He teaches you to have a small emergency fund, create and live on a budget, avoid debt, save for retirement, and pay cash for things. There are things that I disagree with him on like the use of credit cards and having a credit score but for the MAJORITY of people, I would say that his advice is enough to build a strong foundation towards financial independence.

I think The Bogleheads would be the Bachelor's degree in personal finance. You'll learn more about asset allocations, tax loss harvesting, mega backdoor Roths, and more detailed stuff to really accelerate your path to financial Independence. At the same time, I strongly believe in diversification of education therefore it shouldn't be strictly MMM, DR, or BH - it should be a mix of them and you choose which parts make the most sense to you.

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Re: What is your opinion of Dave Ramsey?
« Reply #37 on: March 13, 2018, 08:44:40 PM »
I appreciate his message... I actually teach his class, "Financial Peace University".  It brings me so much joy to see the light bulbs turn on for people and watching them get on fire for putting their families into strong financial positions, he is an excellent motivational speaker in that way.  My take on his message is that it is a super conservative path that makes it nearly impossible to screw up.  It is the message that is needed for 90% of Americans today.  It is not ideal, but it doesn't have to be absolutely positively ideal for the average person to turn themselves from the path of financial destruction to the path of financial success.

I chose to take it a step further personally, and that's how I ended up in the MMM world.  In reality, the MMM message is pretty simple too, right?  Cut your spending and invest in low cost index funds.  Both DR and MMM teach simple methods to conquer complicated problems, and that's why they are so successful.

I think that a lot of people here would have to admit that their financial interest started with Dave Ramsey.  I hear it often from the "big name" FI podcasts, so I know it must be just as common around here.
90% really, 90%?

You got a better estimate?  50% of Americans are living paycheck to paycheck.  60% can't cover a $500 surprise expense without taking on debt.  Average household credit card debt is $15K.  Don't even get me started with how much people have saved for retirement.  I think it's safe to say 9/10 Americans could benefit from his message, but go ahead and debate me on that.
Well, since you have 50% and 60% figures at the ready, why don't you start with that instead of going for broke and making up a 90% figure?

I'm basing it on my own personal experience with actually leading the class for the last 3 years.  I honestly feel that 9/10 of the people I meet can benefit from the class, his message is for the masses, not the people shooting to save 50+% of their income and retire at 30.  Have you ever taken the class or listened to his podcast extensively to prove that you aren't calling me out on something you know nothing about?  Do you even know what his message is?

What would it take for me to prove to you that his message would be helpful for 90% of Americans? Or have you just made up your mind and that's that?
« Last Edit: March 13, 2018, 08:54:57 PM by v8rx7guy »

MrUpwardlyMobile

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Re: What is your opinion of Dave Ramsey?
« Reply #38 on: March 13, 2018, 09:09:46 PM »
Well, since you have 50% and 60% figures at the ready, why don't you start with that instead of going for broke and making up a 90% figure?
I've noticed it's pretty common on forums for people to throw out phrases like "90% of the time" or "99% of the people" or even "99.999% of ..... "  when they're trying to make a point without having any facts to back it up.

Fifty percent of the time, it works 99.99% of the time.

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Re: What is your opinion of Dave Ramsey?
« Reply #39 on: March 14, 2018, 04:41:03 AM »
Well, since you have 50% and 60% figures at the ready, why don't you start with that instead of going for broke and making up a 90% figure?
I've noticed it's pretty common on forums for people to throw out phrases like "90% of the time" or "99% of the people" or even "99.999% of ..... "  when they're trying to make a point without having any facts to back it up.

Fifty percent of the time, it works 99.99% of the time.

That's why I always win at Black jack. Oh wait....

channtheman

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Re: What is your opinion of Dave Ramsey?
« Reply #40 on: March 14, 2018, 05:30:52 AM »
he's good for getting people out of debt - though he's inefficient as shit at it


Most people don't have $25,000 in credit card debit at 15-20% and $5k in student loan or auto debt at 5-7%. It's usually the other way around. Paying off small debts first, regardless if they're higher interest is more likely to result in a person getting out of debt than giving up part way through because they don't feel like they're making progress on a larger high interest debt.

Even if the numbers were reversed, if you're getting out of debt in 2-3 years that extra interest is not going to be a huge amount.

its still inefficient as shit.

avg credit card debt in US 16k - at 15-20%
auto loans 25k at your 5-7% - really high assumption

dont train yourself to make emotional financial decisions thats what go you in debt in the first place
Train yourself to make mathematically optimal financial decisions.

It's inefficient but not as bad as you're making it sound.  In your very own example, the snowball and avalanche methods would have you paying off the debt in the exact same order.  The 16k credit card first, and then the auto loan.  I've input real debt numbers into snowball vs avalanche calculators before and often the snowball method is 1-2 months longer payoff and a couple thousand more in interest (obviously the real life numbers affect this).   Again, obviously it's inefficient, but when we're talking about paying off 40k in debt, a couple thousand is not as big of a deal if using the snowball method means you actually stick to it. 

That's the other thing, you can argue till you are blue in the face that people should train themselves to be smarter, etc.  They won't.  People are lazy and don't want to think about things like finances.  They just don't.  Credit to Dave Ramsey for seeing a business opportunity with his simplistic financial advice (that isn't even his really, it's moreso his presentation of it) that makes sense to the masses. 

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Re: What is your opinion of Dave Ramsey?
« Reply #41 on: March 14, 2018, 05:36:32 AM »
Well, since you have 50% and 60% figures at the ready, why don't you start with that instead of going for broke and making up a 90% figure?
I've noticed it's pretty common on forums for people to throw out phrases like "90% of the time" or "99% of the people" or even "99.999% of ..... "  when they're trying to make a point without having any facts to back it up.

This entire thread of posts arguing about the 90% vs 50% is pretty dumb already, but I'll just add my piece.  90% (re: most) of posters who post that 90% (re: most) of the time "xyz" are usually just using that made up % in place of a term like "most" or "almost all/nearly everyone/a lot."  There's no real need to attack someone for doing it.  The first posters point was that Dave Ramsey's basic financial advice would help most people.  That is true.  If most people followed his advice exactly, they'd likely be better off than if they didn't.  This isn't true all the time, duh.  But let's not pretend that the intelligent posters on the MMM forum can't figure this stuff out.

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Re: What is your opinion of Dave Ramsey?
« Reply #42 on: March 14, 2018, 07:12:57 AM »
I think the fact is that he's helped thousands of people improve their financial situations, get on budgets and generally lead better lives.  He's not for everybody, but his program helps a lot of people.  I won't criticize that.

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Re: What is your opinion of Dave Ramsey?
« Reply #43 on: March 14, 2018, 07:39:21 AM »
Well, since you have 50% and 60% figures at the ready, why don't you start with that instead of going for broke and making up a 90% figure?
I've noticed it's pretty common on forums for people to throw out phrases like "90% of the time" or "99% of the people" or even "99.999% of ..... "  when they're trying to make a point without having any facts to back it up.

This entire thread of posts arguing about the 90% vs 50% is pretty dumb already, but I'll just add my piece.  90% (re: most) of posters who post that 90% (re: most) of the time "xyz" are usually just using that made up % in place of a term like "most" or "almost all/nearly everyone/a lot."  There's no real need to attack someone for doing it.  The first posters point was that Dave Ramsey's basic financial advice would help most people.  That is true.  If most people followed his advice exactly, they'd likely be better off than if they didn't.  This isn't true all the time, duh.  But let's not pretend that the intelligent posters on the MMM forum can't figure this stuff out.
Sorry, but when you try to make an outrageous claim, you lose me. I don't believe that I'm part of just 10% of people.  If you want to say majority,  and mean over 50%, then I don't take pause like I do with  a claim of 90%. In fact, it could be said that a good chunk of the 50/60% is comprised of disabled and seniors, but I don't care about that. As someone who has been bombarded with outrageous advertising claims for my whole life, I'm conditioned to automatically question a number like 90%. You might try that, and you wouldn't be taken by (or need the services of) hucksters like Ramsey.

Michael in ABQ

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Re: What is your opinion of Dave Ramsey?
« Reply #44 on: March 14, 2018, 09:53:22 AM »
I once heard Dave Ramsey described as being similar to Weight Watchers. Weight Watchers is not going to take an obese person to a marathon-running nutritionist, but it is a great way to get started for people who don't know where to start and need a lot of structure and encouragement to get going. At a certain point, to make progress, you will need to go beyond the basic recommendations...but at that point you should feel confident and knowledgeable to make your own way.

I think that is a great analogy.  The slight difference is that people go to Weight Watchers to lose weight.  They pay money to do so. They know that they are paying money for help in losing weight.  Weight Watchers is not pushing food that is fattening for them to eat for a profit.

Dave Ramsey, is selling financial advice and he is getting people to buy products that are bad for their personal financial well being.  It is like he is pushing donuts and girl scout cookies, when he should be telling people to eat fruits and vegetables.  He is convincing people in bad financial shape to buy products through his show, website, and seminars.  He is pushing them into a network that gives Dave Ramsey a kickback.  He is selling them fluff, while he is making a killing.

Most of what Dave Ramsey teaches is available for free. My wife and I received his book the Total Money Makeover as a gift from my father-in-law a couple of years after we got married, and if I had actually read it then I probably would have gotten serious about getting out of debt a few years earlier. Is a $20 book that helps you get out of a bad financial position not worth it?

His class is $129 for 9 weeks. I think you'd be hard pressed to find many people going through there that didn't save that much in interest from knocking out debt in just a few months. Someone recently started teaching it at my church and the people going through are usually managing to payoff thousands in debt and save thousands more in just that 9 week period, to say nothing of the months and years after. His events are usually about $50 for a few hours or most of a day. Once again, if it motivates you to finally get rid of some debt you'll make that back shortly. As for his referrals to real estate agents, financial planners, accountants, etc. is no different from the business model of MMM. It's affiliate marketing and he receives a commission for it. Though from what I understand those people he endorses are basically paying per lead, it's not like they have to give Dave Ramsey part of the income they generate from any of those leads that turn into clients. There's nothing nefarious or underhanded about it, it's a pretty common business model. His more expensive products are targeted at business owners and can run into the thousands of dollars but that's the going rate for a lot of multi-day conferences or leadership seminars in that space.

If you're on this forum then you can probably handle your own investing and do alright. But the vast majority of people would prefer to have someone helping them out on that. If it costs them 1% of assets under management that's on them for deciding to pay for that. Dave Ramsey repeats over and over you should never invest in something you don't fully understand and anyone he refers you to should be a teacher, not a salesperson. Finding someone to help you select mutual funds is going to provide a lot better results than being suckered in by some insurance salesman pushing a whole life policy as an investment or trying to sell an annuity or some other horrible financial product. Or just plain not investing at all. Losing 1% of something to a financial planner is going to provide better results than not investing at all, speculating on bitcoin, or "investing" in insurance products. It probably won't provide as good of results as just buying a few index funds, but that's why most of us are looking to retire early and the majority of people are worrying about retiring at all.

Milizard

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Re: What is your opinion of Dave Ramsey?
« Reply #45 on: March 14, 2018, 10:03:27 AM »
I appreciate his message... I actually teach his class, "Financial Peace University".  It brings me so much joy to see the light bulbs turn on for people and watching them get on fire for putting their families into strong financial positions, he is an excellent motivational speaker in that way.  My take on his message is that it is a super conservative path that makes it nearly impossible to screw up.  It is the message that is needed for 90% of Americans today.  It is not ideal, but it doesn't have to be absolutely positively ideal for the average person to turn themselves from the path of financial destruction to the path of financial success.

I chose to take it a step further personally, and that's how I ended up in the MMM world.  In reality, the MMM message is pretty simple too, right?  Cut your spending and invest in low cost index funds.  Both DR and MMM teach simple methods to conquer complicated problems, and that's why they are so successful.

I think that a lot of people here would have to admit that their financial interest started with Dave Ramsey.  I hear it often from the "big name" FI podcasts, so I know it must be just as common around here.
90% really, 90%?

You got a better estimate?  50% of Americans are living paycheck to paycheck.  60% can't cover a $500 surprise expense without taking on debt.  Average household credit card debt is $15K.  Don't even get me started with how much people have saved for retirement.  I think it's safe to say 9/10 Americans could benefit from his message, but go ahead and debate me on that.
Well, since you have 50% and 60% figures at the ready, why don't you start with that instead of going for broke and making up a 90% figure?

I'm basing it on my own personal experience with actually leading the class for the last 3 years.  I honestly feel that 9/10 of the people I meet can benefit from the class, his message is for the masses, not the people shooting to save 50+% of their income and retire at 30.  Have you ever taken the class or listened to his podcast extensively to prove that you aren't calling me out on something you know nothing about?  Do you even know what his message is?

What would it take for me to prove to you that his message would be helpful for 90% of Americans? Or have you just made up your mind and that's that?
Yes, I examined his message fairly well a few years ago. To convince me, you'd have to come up with better evidence than 9 out of 10 people you meet.  The only thing that I'm convinced of, is that you are convinced.

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Re: What is your opinion of Dave Ramsey?
« Reply #46 on: March 14, 2018, 10:13:54 AM »
I never had to be taught the two things that 90 percent of Dave Ramsey callers fail to grasp.

1. Don't take out student loans. Go to public in-state universities. Work while in college. Cash flow it. Get your 4-year degree in four years or less. Get career-related experience while in college, where you major in something marketable.
2. Pay cash for cars. Always. If you can't afford to pay cash, you can't afford the car.

If I had listened to Dave Ramsey when he started in 1992 (when I was 22), I would have thought -- as I do now -- that his schtick was painfully obvious. Sadly, it's not to 90 percent of Americans.




Michael in ABQ

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Re: What is your opinion of Dave Ramsey?
« Reply #47 on: March 14, 2018, 10:23:54 AM »
I never had to be taught the two things that 90 percent of Dave Ramsey callers fail to grasp.

1. Don't take out student loans. Go to public in-state universities. Work while in college. Cash flow it. Get your 4-year degree in four years or less. Get career-related experience while in college, where you major in something marketable.
2. Pay cash for cars. Always. If you can't afford to pay cash, you can't afford the car.

If I had listened to Dave Ramsey when he started in 1992 (when I was 22), I would have thought -- as I do now -- that his schtick was painfully obvious. Sadly, it's not to 90 percent of Americans.

Exactly. Think about your relatives or co-workers, how many of them run up consumer debt, buy new vehicles with payments, went deeply in student loan debt? Your friends may be different since we tend to gravitate towards similar people that are not necessarily representative of society as a whole. If all of your friends are deeply in debt, living paycheck to paycheck, and driving brand new vehicles while you're saving 50% of your income and driving an old used car you're going to feel out of place and probably find new friends eventually.

His advice seems obvious and common sense to almost anyone reading this thread. But common sense, isn't very common. All it takes is looking at how many people have sub-prime auto loans with 72 month terms and 10%+ interest rates or a mortgage payment that's 50% of their take-home pay so they can buy a house that they can't afford to furnish.

Just Joe

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Re: What is your opinion of Dave Ramsey?
« Reply #48 on: March 14, 2018, 10:25:12 AM »
he's good for getting people out of debt - though he's inefficient as shit at it

his investing advice is crap

He's like preschool for the financial world - here is how you sit in a circle and get in a line and write your name. 

Really we should teach finance in school but its just too touchy a subject for far too many.

His website also looks a bit more shady than my local used car lot.  For a good Christian, he sure knows how to fleece the flock.

You gotta spend money to save money - right? ;)

On his site I saw $15 envelopes and wallets for paying cash for items. DW and I did it with 2 cent paper envelopes before we took a more sophisticated approach. 

His operation always leaves me with feelings similar to a high interest loan or the check cashing places. He ought to be leading his listeners with tangible value, not expensive solutions that delay their debt goals. He ought to be doing what the MMM community does - calling out silly things like the $15 cash pouches for what they are - overpriced.

This is so counter-intuitive to what I've been taught repeatedly a good Christian is supposed to do, and supposedly DO. People who talk the talk but fail to walk the walk bug me to no end.
« Last Edit: March 14, 2018, 10:38:51 AM by Just Joe »

Milizard

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Re: What is your opinion of Dave Ramsey?
« Reply #49 on: March 14, 2018, 10:58:08 AM »
I never had to be taught the two things that 90 percent of Dave Ramsey callers fail to grasp.

1. Don't take out student loans. Go to public in-state universities. Work while in college. Cash flow it. Get your 4-year degree in four years or less. Get career-related experience while in college, where you major in something marketable.
2. Pay cash for cars. Always. If you can't afford to pay cash, you can't afford the car.

If I had listened to Dave Ramsey when he started in 1992 (when I was 22), I would have thought -- as I do now -- that his schtick was painfully obvious. Sadly, it's not to 90 percent of Americans.

Exactly. Think about your relatives or co-workers, how many of them run up consumer debt, buy new vehicles with payments, went deeply in student loan debt? Your friends may be different since we tend to gravitate towards similar people that are not necessarily representative of society as a whole. If all of your friends are deeply in debt, living paycheck to paycheck, and driving brand new vehicles while you're saving 50% of your income and driving an old used car you're going to feel out of place and probably find new friends eventually.

His advice seems obvious and common sense to almost anyone reading this thread. But common sense, isn't very common. All it takes is looking at how many people have sub-prime auto loans with 72 month terms and 10%+ interest rates or a mortgage payment that's 50% of their take-home pay so they can buy a house that they can't afford to furnish.

This (the bolded).  Let's just say my circle and yours could be described as polar opposites.  At the moment, I do not know a single person who I think could benefit from DR's message.  One actually went to FPU, but it didn't appear to stick.  It's just a very different crowd---and we're not the 10%!  I know you DR followers love to think that most everyone else is like you, but they're not.  There's a big variety of people out there, doing just fine in their own ways--or doing worse for much different reasons.