What is your opinion of Dave Ramsey?

[TheAnonOne]

I actually started with MMM around 13' or 14' and saved like crazy, but also paid off a few debts (50k student loans).

It wasn't until around 2016 I even heard a DR podcast, and frankly I had a long commute so I wanted to listen to something.

I don't have a really good opinion of him even after listening to literally 100s of episodes. It is mostly entertainment value for me now. I think that maybe he helps a few people, but I get the vibe that most just do whatever they want anyway.

There are people who call in and say "I PAID OFF 40k" or XYZ accomplishment that is, frankly, a bit underwhelming for this board. We have people amassing a million dollars in 5-7 years here.

So maybe, like others, I think he probably helps the 'soccer moms' and other 'generics' of the world.

[DadJokes]

So, here's something crazy...

A friend of mine works for DR and was on the show yesterday to advocate for his FPU program. I decided to listen to the podcast for the first time in a while to see how it went. While listening, someone called in for advice and mentioned that she was going to start working at my company next week. Once she gets here, I'll be sure to reach out to her and try to steer her down a more optimized path (and maybe I'll get a FI friend out of it).

[Zamboni]

^Lol, that's cool! Always nice to come to a new company and have a friendly and welcoming colleague. She might be a bit embarassed that you heard her on DR, though, depending upon what topic she talked about with him, so maybe hold off on bringing that up?

I like DR's comment about the Presidency as well.

[A Fella from Stella]

When I hear Dave's comments about Elizabeth Warren, it makes me really like him. I don't think I'd vote for her in the primary, but hearing someone who definitely would not vote for her ever say such positive things makes me like the guy.

[solon]

When I hear Dave's comments about Elizabeth Warren, it makes me really like him. I don't think I'd vote for her in the primary, but hearing someone who definitely would not vote for her ever say such positive things makes me like the guy.

What did he say about Warren? Link?

[HPstache]

When I hear Dave's comments about Elizabeth Warren, it makes me really like him. I don't think I'd vote for her in the primary, but hearing someone who definitely would not vote for her ever say such positive things makes me like the guy.

What did he say about Warren? Link?

This is what I remember him saying a few months ago:

https://www.youtube.com/watch?v=tpkVU4PwPiE

[Zamboni]

Lol:
"You can go three hundred thousand dollars in debt getting a masters degree in left handed puppetry . . . "

So true. It's quotes like that that keep me clicking on his vids. He and Elizabeth Warren agree on a lot more than he is letting on, at least as far as it comes to personal finances.

[Chris Pascale]

I have listened to a ton of Dave Ramsey. In 2010-2012 he was starting to lose his patience with callers, and that was getting irritating for me as a listener. When I found the F.I.R.E. podcasts I wasn't as interested in his show, but have recently come back around to listening to some YouTube clips that he posts, which are usually pretty good.

[AO1FireTo]

I used to listen to Dave Ramsey a lot, he was entertaining, even if his baby steps, while effective are pretty basic.  However, I find he's really dropped the ball on the Covid-19 situation.  He sounded like a angry old man that can't be told what to do.  Quite the opposite of what we need right now.  Stopped listening to him altogether.  And I can't stand all of the "Ramsey" Personalities.  Chris Hogan isn't too bad but the rest...  As soon as I heard them on the show, DELETE...

[vand]

It was all becoming rather silly when the economy was booming and he had callers on six figures regularly calling in, but now the economy has taken a bad turn, I think there'll be more value in his show. Both his show and the economy need to get back to basics with a new generation of people who are falling on hard times for the first time in their lives

[penguintroopers]

It was all becoming rather silly when the economy was booming and he had callers on six figures regularly calling in, but now the economy has taken a bad turn, I think there'll be more value in his show. Both his show and the economy need to get back to basics with a new generation of people who are falling on hard times for the first time in their lives

I dunno. I’ve been getting really frustrated with him right now because he isn’t really acknowledging the situation. He’s been kind by not beating up new listeners with “you should have been doing this before!”, but he doesn’t seem to believe that things are different right now.

Here’s a few points I disagree with him with COVID:

- It’s much wiser to have more cash than his $1000 emergency fund.
- Since a large portion of his new listeners are going to be without a job (biased because unemployment may disproportionally lead to a need to manage finances, vs still having your job and keeping spending the same) staying on unemployment longer than you originally might have done before could be a better option for your family. Don’t listen to some crazy guy yelling at you to get off UI with ANY job.
- Don’t risk your health accelerating baby step 2 (getting out of debt) for the small additional income a second job would give you. Yes, some of those side hustles could get you to 1-2k a month, but personally I don’t find that worth it at the moment. Like above, the reason why UI was boosted was to keep people at home. If you’re unable to WFH, collect UI and stay at home.

Add on my normal-time advice to ignore him and continue your 401k up to the match and use credit cards if you can pay them off for rewards.... very little of what Dave is saying right now I agree with.

[ender]

I used to listen to Dave Ramsey a lot, he was entertaining, even if his baby steps, while effective are pretty basic.  However, I find he's really dropped the ball on the Covid-19 situation.  He sounded like a angry old man that can't be told what to do.  Quite the opposite of what we need right now.  Stopped listening to him altogether.  And I can't stand all of the "Ramsey" Personalities.  Chris Hogan isn't too bad but the rest...  As soon as I heard them on the show, DELETE...

+1

I really think that the Dave Ramsey show really is made by him and as much as he is obviously trying to keep the brand going after he's retired (or dead, since I think he'll keep doing it until those happen at the same time more or less) it's really painful.

Most of them give borderline bad financial advice and often do not really understand/know the right things.

[vand]

It was all becoming rather silly when the economy was booming and he had callers on six figures regularly calling in, but now the economy has taken a bad turn, I think there'll be more value in his show. Both his show and the economy need to get back to basics with a new generation of people who are falling on hard times for the first time in their lives

I dunno. I’ve been getting really frustrated with him right now because he isn’t really acknowledging the situation. He’s been kind by not beating up new listeners with “you should have been doing this before!”, but he doesn’t seem to believe that things are different right now.

Here’s a few points I disagree with him with COVID:

- It’s much wiser to have more cash than his $1000 emergency fund.
- Since a large portion of his new listeners are going to be without a job (biased because unemployment may disproportionally lead to a need to manage finances, vs still having your job and keeping spending the same) staying on unemployment longer than you originally might have done before could be a better option for your family. Don’t listen to some crazy guy yelling at you to get off UI with ANY job.
- Don’t risk your health accelerating baby step 2 (getting out of debt) for the small additional income a second job would give you. Yes, some of those side hustles could get you to 1-2k a month, but personally I don’t find that worth it at the moment. Like above, the reason why UI was boosted was to keep people at home. If you’re unable to WFH, collect UI and stay at home.

Add on my normal-time advice to ignore him and continue your 401k up to the match and use credit cards if you can pay them off for rewards.... very little of what Dave is saying right now I agree with.

We can agree to disagree.

I think DR's baby steps will be highly relevant for a whole new slew of newly desprates.  It's not that he isn't acknowledging the seriousness of the situation or making light of it at all.. it's that for those who took some of the key advice like having 3-6 months of emergency cash then that affords them the luxury to *not* panic.

When you've been through a few ups and downs and learn you learn that instilling good financial habits, instilling discipline and building some resilience into your plan is worth a whole lot more than earning 1% on CC rewards.

People who already have their ducks in a row can ignore him and marvel at how simplistic his advice is. It needs to be simple because his aim is to appeal to a mass audience, not tailor a specific plan for financial geeks.

[hops]

It was all becoming rather silly when the economy was booming and he had callers on six figures regularly calling in, but now the economy has taken a bad turn, I think there'll be more value in his show. Both his show and the economy need to get back to basics with a new generation of people who are falling on hard times for the first time in their lives

I dunno. I’ve been getting really frustrated with him right now because he isn’t really acknowledging the situation. He’s been kind by not beating up new listeners with “you should have been doing this before!”, but he doesn’t seem to believe that things are different right now.

It's been several weeks since I last checked in via YouTube, but it was gratifying to see how many of his fans there expressed outrage or disappointment at much of his C19 advice, particularly his repeated admonitions to not file for unemployment and instead seek high-risk, low-paying jobs.

[penguintroopers]

We can agree to disagree.

I think DR's baby steps will be highly relevant for a whole new slew of newly desprates.  It's not that he isn't acknowledging the seriousness of the situation or making light of it at all.. it's that for those who took some of the key advice like having 3-6 months of emergency cash then that affords them the luxury to *not* panic.

When you've been through a few ups and downs and learn you learn that instilling good financial habits, instilling discipline and building some resilience into your plan is worth a whole lot more than earning 1% on CC rewards.

People who already have their ducks in a row can ignore him and marvel at how simplistic his advice is. It needs to be simple because his aim is to appeal to a mass audience, not tailor a specific plan for financial geeks.

You are correct, his message is made to be simple to someone who stumbles across him on YouTube. Doesn't mean I think its a great plan, or a plan I'd recommend to others right now. Like I said in my post, using CCs for rewards if you can pay them off.

If we were following his message correctly right now (which we are not, we're "Dave-ish"), my husband and I would have roughly $1000 right now instead of the ~5 mo emergency fund we have instead. A lot of other financial gurus also have simple plans, and they put the emergency fund ahead of debt payoff.

[DadJokes]

We can agree to disagree.

I think DR's baby steps will be highly relevant for a whole new slew of newly desprates.  It's not that he isn't acknowledging the seriousness of the situation or making light of it at all.. it's that for those who took some of the key advice like having 3-6 months of emergency cash then that affords them the luxury to *not* panic.

When you've been through a few ups and downs and learn you learn that instilling good financial habits, instilling discipline and building some resilience into your plan is worth a whole lot more than earning 1% on CC rewards.

People who already have their ducks in a row can ignore him and marvel at how simplistic his advice is. It needs to be simple because his aim is to appeal to a mass audience, not tailor a specific plan for financial geeks.

You are correct, his message is made to be simple to someone who stumbles across him on YouTube. Doesn't mean I think its a great plan, or a plan I'd recommend to others right now. Like I said in my post, using CCs for rewards if you can pay them off.

If we were following his message correctly right now (which we are not, we're "Dave-ish"), my husband and I would have roughly $1000 right now instead of the ~5 mo emergency fund we have instead. A lot of other financial gurus also have simple plans, and they put the emergency fund ahead of debt payoff.

As far as using credit cards for points, he has a few talking points.

1. Most airline miles never get used
2. The credit card companies are smarter than you, as evidenced by the fact that their buildings are taller than your house.

Since I'm smarter than the average bear, I know that his advice doesn't really apply to me. However, most people are idiots that find their way into large amounts of debt, so they can benefit from his advice.

As for baby step one, the $1,000 emergency fund, his expectation is that your non-mortgage debt should be paid off in two years. The idea is that you should be motivated to make extra money and cut expenses to the bone until your non-mortgage debt is paid off. If you don't feel a sense of urgency to pay it off, it'll just sit around forever.

Obviously, this is an emotional approach to finances that doesn't work for mathematically-minded people like us. We just have to realize that most people don't process things like we do, and the "optimization" approach isn't going to work for those people.

If the entire world followed Dave Ramsey's financial advice, 90% of people would be better off than they currently are.

[OtherJen]

I sometimes listen to some of his clips on YouTube and have rolled my eyes at some of his dismissal of the COVID-19 situation, but I agree with him on two points. 1) This isn’t the time to panic and sell your retirement funds at a loss, and 2) if you’re in the debt payoff stage of his plan, drop back down to the minimum payments, keep those current, and save any excess as cash in case things get bad. If you end up not needing the cash, use it to make big debt payments as soon as things stabilize.

[ROF Expat]

I think Dave Ramsey does a lot of good for a  lot of people and have recommended his program to a few who had debt and financial issues. 

No, his program isn't optimal for me and some of the people on this board, but we're not his target audience.  His target audience is people who are "losing" with money, ie in deep debt.  His target audience is in financial trouble because of poor financial decisions and behaviors (living beyond their means and buying into the whole consumer debt lifestyle).  I think he is absolutely correct that they need to change their behaviors by not incurring new debt and getting rid of the debt they already have.  For most of those people, behavior modification will be a lot more important than mathematical optimization.  For them, cutting up their credit cards is likely to have a far more positive impact than using cc points.  For people being harassed by debt collectors, paying off a small debt (and not getting calls from one debt collector) probably brings greater psychological reinforcement than using that money to pay down a higher interest debt but still getting the same number of bills every month.  And I think his blunt responses to callers who want to spend more than half their annual income on a car loan "because the loan is interest free" are absolutely correct (and not very different than the "facepunch" discussed here).  I think Dave Ramsey is kind of like AA.  AA's advice on drinking alcohol isn't relevant to me, because I'm not an alcoholic, but that doesn't mean it doesn't help a lot of people or that I should tell an alcoholic he/she should become a social drinker like me. 

I think Dave Ramsey and MMM share most of the common fundamentals: 

--live below your means

--have a healthy emergency fund

--don't get caught up in the consumer treadmill

--invest a large portion of your savings in mutual funds

--use those mutual funds to pay for the kind of retirement you envision

To me, the differences between the MMM and Ramsey philosophies are much like the argument in Monty Python's "Life of Brian" between the followers of the gourd and the followers of the sandal. 

[Master of None]

My SO and I started with Dave Ramsey before finding MMM. If I would have found MMM first I don't think we would be where we are now. We needed that basic training first. Dave does illicit an emotional response to financial matters which is exactly what we needed at that time. I will forever be thankful for Dave's advice because it set us on this journey. After a couple of years of changed behavior we were able to utilize CC for points and pay them off every month. We also utilize 0% interest loans on major house repairs or upgrades even though we have the cash to pay for them so we can invest those funds. We have slowly shifted away from dealing with our financial matters in an emotional way to a more mathematical approach. Its been a great journey for us.

[Michael in ABQ]

My SO and I started with Dave Ramsey before finding MMM. If I would have found MMM first I don't think we would be where we are now. We needed that basic training first. Dave does illicit an emotional response to financial matters which is exactly what we needed at that time. I will forever be thankful for Dave's advice because it set us on this journey. After a couple of years of changed behavior we were able to utilize CC for points and pay them off every month. We also utilize 0% interest loans on major house repairs or upgrades even though we have the cash to pay for them so we can invest those funds. We have slowly shifted away from dealing with our financial matters in an emotional way to a more mathematical approach. Its been a great journey for us.

I started with him probably 5-6 years ago when finally admitted that we had been sinking into (more) debt for years. We were barely making progress on our modest student loans, starting to carry balances on credit cards - even with 0% balance transfer cards that just masked the problem, and just saving enough to get my 401k match. Within 2.5 years we paid off about $35k in debt making around $50k a year. We cut our expenses, got intentional with out spending, and I was able to increase my income due to a promotion and more hours from around $40k to closer to $60k.

Fast forward a few years and we're still debt averse but I've got a few credit cards that I've made at least $1,500 on between sign-up bonuses and other rewards. I pay them off every month, often times a few weeks early because even having a $1,000 balance for regular expenses bugs me and I just want to get it down to zero. I'm strongly considering borrowing several hundred thousand dollars with an SBA loan to buy a business in the future. I'm also saving 25% of my income towards retirement instead of 15% - though that's mostly to take advantage of being in a tax free zone for a limited period of time.

[Goatee Joe]

I sometimes listen to some of his clips on YouTube and have rolled my eyes at some of his dismissal of the COVID-19 situation

I noticed that too.  Dave's giving out solid financial advice as usual, but he's now gotten WAY out of his lane and is handing people blatantly incorrect information on COVID ("you just can't believe ANY of the data!").  Whatever, DR.  Stick to personal finance, pal.  Leave the health advice to medical experts, for the love of God.

[bigblock440]

We can agree to disagree.

I think DR's baby steps will be highly relevant for a whole new slew of newly desprates.  It's not that he isn't acknowledging the seriousness of the situation or making light of it at all.. it's that for those who took some of the key advice like having 3-6 months of emergency cash then that affords them the luxury to *not* panic.

When you've been through a few ups and downs and learn you learn that instilling good financial habits, instilling discipline and building some resilience into your plan is worth a whole lot more than earning 1% on CC rewards.

People who already have their ducks in a row can ignore him and marvel at how simplistic his advice is. It needs to be simple because his aim is to appeal to a mass audience, not tailor a specific plan for financial geeks.

You are correct, his message is made to be simple to someone who stumbles across him on YouTube. Doesn't mean I think its a great plan, or a plan I'd recommend to others right now. Like I said in my post, using CCs for rewards if you can pay them off.

If we were following his message correctly right now (which we are not, we're "Dave-ish"), my husband and I would have roughly $1000 right now instead of the ~5 mo emergency fund we have instead. A lot of other financial gurus also have simple plans, and they put the emergency fund ahead of debt payoff.

Maybe I missed it, but how much non-mortgage debt do you have, and don't you think it would make you feel better to not have it in this situation?

[Retire-Canada]

I almost exclusively watch DR on YT when I am visiting my parents and bored out of my mind. He's entertaining and viewed as a reality TV show I think he delivers the expected product. I have never looked to DR for financial or investing advice. That said I've never had debt problems so I am not part of his target demographic.

[penguintroopers]

We can agree to disagree.

I think DR's baby steps will be highly relevant for a whole new slew of newly desprates.  It's not that he isn't acknowledging the seriousness of the situation or making light of it at all.. it's that for those who took some of the key advice like having 3-6 months of emergency cash then that affords them the luxury to *not* panic.

When you've been through a few ups and downs and learn you learn that instilling good financial habits, instilling discipline and building some resilience into your plan is worth a whole lot more than earning 1% on CC rewards.

People who already have their ducks in a row can ignore him and marvel at how simplistic his advice is. It needs to be simple because his aim is to appeal to a mass audience, not tailor a specific plan for financial geeks.

You are correct, his message is made to be simple to someone who stumbles across him on YouTube. Doesn't mean I think its a great plan, or a plan I'd recommend to others right now. Like I said in my post, using CCs for rewards if you can pay them off.

If we were following his message correctly right now (which we are not, we're "Dave-ish"), my husband and I would have roughly $1000 right now instead of the ~5 mo emergency fund we have instead. A lot of other financial gurus also have simple plans, and they put the emergency fund ahead of debt payoff.

Maybe I missed it, but how much non-mortgage debt do you have, and don't you think it would make you feel better to not have it in this situation?

We're at $28k, down from $103k in August of 2018. Set to pay off August of this year. Its all student loans, and yes, I'd love to not have it right now but I also would love to have not had it 6 months ago. The only reason why I'm okay with having it right now is the interest and payment deferments until September and hubs and I stopped to pile up cash to tide us over. I had to convince my husband how having $28k in debt and $28k in the bank would be better than $0 and $0.

And you're entirely correct about us not correctly matching up with his target demographic.

[Werthless]

His stance on the PPP loan program is... interesting.

https://youtu.be/7ldH7mTUe9M

[ohio4life]

I sometimes listen to some of his clips on YouTube and have rolled my eyes at some of his dismissal of the COVID-19 situation

I noticed that too.  Dave's giving out solid financial advice as usual, but he's now gotten WAY out of his lane and is handing people blatantly incorrect information on COVID ("you just can't believe ANY of the data!").  Whatever, DR.  Stick to personal finance, pal.  Leave the health advice to medical experts, for the love of God.

What was all that about? He starts saying the data doesn't match what the government is saying in one video/clip, but didn't elaborate much. Pretty disappointing to see him talk like that. I'm assuming he talked at length about what he meant in another segment (I'll give him the benefit of the doubt), but consumed as one Youtube clip it seemed a bit problematic. If you want to use some numbers and make a point then go for it, but just saying the government is lying to people seems odd at best and dangerous at worst. A lot of people trust him and as we know may run with little more information.

[Goatee Joe]

I sometimes listen to some of his clips on YouTube and have rolled my eyes at some of his dismissal of the COVID-19 situation

I noticed that too.  Dave's giving out solid financial advice as usual, but he's now gotten WAY out of his lane and is handing people blatantly incorrect information on COVID ("you just can't believe ANY of the data!").  Whatever, DR.  Stick to personal finance, pal.  Leave the health advice to medical experts, for the love of God.

What was all that about? He starts saying the data doesn't match what the government is saying in one video/clip, but didn't elaborate much. Pretty disappointing to see him talk like that. I'm assuming he talked at length about what he meant in another segment (I'll give him the benefit of the doubt), but consumed as one Youtube clip it seemed a bit problematic. If you want to use some numbers and make a point then go for it, but just saying the government is lying to people seems odd at best and dangerous at worst. A lot of people trust him and as we know may run with little more information.

He's completely off the rails on this topic.  Take this recent gem, for example: https://www.youtube.com/watch?v=M7pypTCNUiU

Someone from California calls up to complain (I'm not making this up) that her "civil liberties and freedoms" are being taken because she can't open her dance studio.  DANCE fucking studio!  So, in her mind, once the tyrannical CA government gets off her back, people are just going to fall over themselves to crowd themselves and their kids into her dance classes.  Unreal.

Then Dave, in total agreement, launches into his usual idiotic rant about how the data aren't "credible" and how people "aren't gonna stay in their homes" because the data is so "inconsistent."  Uh, yeah, Dave... if anything, we are drastically UNDER counting the true number of cases in the U.S.  I've seen no credible source claim we're over-counting cases.

Dave is truly the Messiah for the hordes of American fuckwits who dig themselves into insurmountable debt and apparently can't discern fact from fiction.  SMH.

[ChickenStash]

I'm becoming more of a DR fan as time goes on. Politics aside, his program seems to really help folks understand the basics of home finance - budgeting, needs vs. wants, realistic views of finances, etc. I also like his rather blunt manner when dealing with call-ins.

As an example, a close family member recently got divorced and had to start managing her own finances after ~30 years of her husband taking care of it. At first, she had a really tough time making sure money was available to pay bills, planning for less often bills like insurance or taxes, and the like. She took an offer through her church for one of the FP courses and it made a huge impact on how she handled things. Now she had a system for creating a budget, she got a handle on planning for expenses, debts are being reduced, etc. By FIRE standards, she would have a long way to go, but for the vast majority it's a good fit.

For folks that worship at the alter of FIRE this all seems remedial and quaint but for the majority of people in financial trouble this is the missing link or the needed foundation to get their finances squared away. I didn't start thinking of it that way until a friend started sending me vids of the DR call-in segments and it really hit home that there's just a huge number of people that have no idea what debt means or how to budget or just simply how money works. The same thing can be seen in the Case Studies forum.

The downside if everyone followed the DR plan is that the economy would probably collapse. lol. There is so much debt-spending keeping things going it's more than a little scary. The upside is that it's unlikely to make that big of a dent because of plain ol' human nature.

[Dicey]

This is a pretty good reason to revive this thread, IMO:

https://www.fool.com/investing/2021/08/18/3-things-dave-ramsey-gets-wrong-about-retirement/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article

I'm not a huge Fool Fan, but I think they nailed it on this one. At least it's a good start on what should be a much longer list.

[HPstache]

This is a pretty good reason to revive this thread, IMO:

https://www.fool.com/investing/2021/08/18/3-things-dave-ramsey-gets-wrong-about-retirement/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article

I'm not a huge Fool Fan, but I think they nailed it on this one. At least it's a good start on what should be a much longer list.

I don't necessarily agree with Dave, but I think #1 in this article is the reason Dave claims #2.  I don't think Dave ever says that the S&P500 returns 12%, I do think that he claims with good mutual funds you can return 12%.  Whether this magical mutual fund exists or not, depends on how big of a data set you are using.  He usually says something like choosing a mutual fund with 20 or 30 year track record... I think that AGTHX has returned something like 17% since it's inception in 1973, not sure what the actual CAGR is over that time frame less fees though... probably over 12%?

[ericrugiero]

This is a pretty good reason to revive this thread, IMO:

https://www.fool.com/investing/2021/08/18/3-things-dave-ramsey-gets-wrong-about-retirement/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article

I'm not a huge Fool Fan, but I think they nailed it on this one. At least it's a good start on what should be a much longer list.

I like Dave and he has definitely helped a lot of people.  But, this article makes some very good points.  Dave is the kind of guy who forms an opinion based on his experiences and then thinks that's the only way to be successful.  There is more than one way to succeed financially but his way is certainly low risk and has a high likelihood of success.  If you are willing to put in the work, I (and many others here) would argue you can optimize further than his plan.  Some ways I would optimize:
-  Invest enough in your 401K to get the match.  It's free money.  Even if you take it out and use it to pay down debt, the match generally covers the penalties with some left over.  (not that I recommend this)
-  Use the snowball method but don't be afraid to make exceptions.  ex:  CC debt of $40K at 19% interest and student loan of $35K at 6%.  Pay off the credit card debt first.  If the interest rates aren't dramatically different the momentum of paying off the smallest debts keeps you motivated. 
-  College debt can make sense (although some people go WAY overboard)
-  Paying for an investment advisor is only worth it if you need someone to talk you out of selling in a dip.  Index funds are likely to perform better. 


 

[ericrugiero]

This is a pretty good reason to revive this thread, IMO:

https://www.fool.com/investing/2021/08/18/3-things-dave-ramsey-gets-wrong-about-retirement/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article

I'm not a huge Fool Fan, but I think they nailed it on this one. At least it's a good start on what should be a much longer list.

I don't necessarily agree with Dave, but I think #1 in this article is the reason Dave claims #2.  I don't think Dave ever says that the S&P500 returns 12%, I do think that he claims with good mutual funds you can return 12%.  Whether this magical mutual fund exists or not, depends on how big of a data set you are using.  He usually says something like choosing a mutual fund with 20 or 30 year track record... I think that AGTHX has returned something like 17% since it's inception in 1973, not sure what the actual CAGR is over that time frame less fees though... probably over 12%?

You are right, but hindsight is 20-20.  It's a lot easier to pick the funds that HAVE done better than the S&P500 than the ones that WILL do better.  Supposedly he has been able to do it.  But, the average investor hasn't. 

[HPstache]

This is a pretty good reason to revive this thread, IMO:

https://www.fool.com/investing/2021/08/18/3-things-dave-ramsey-gets-wrong-about-retirement/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article

I'm not a huge Fool Fan, but I think they nailed it on this one. At least it's a good start on what should be a much longer list.

I don't necessarily agree with Dave, but I think #1 in this article is the reason Dave claims #2.  I don't think Dave ever says that the S&P500 returns 12%, I do think that he claims with good mutual funds you can return 12%.  Whether this magical mutual fund exists or not, depends on how big of a data set you are using.  He usually says something like choosing a mutual fund with 20 or 30 year track record... I think that AGTHX has returned something like 17% since it's inception in 1973, not sure what the actual CAGR is over that time frame less fees though... probably over 12%?

You are right, but hindsight is 20-20.  It's a lot easier to pick the funds that HAVE done better than the S&P500 than the ones that WILL do better.  Supposedly he has been able to do it.  But, the average investor hasn't.

Yes, of course.  Past performance does not guarantee future returns.  However, this is the fund that many who follow Dave closely believe he is referring to, and I just wanted to point it out.  The author of this article makes kind of a funny jump in criticism #1 to #2.  Here is a quick youtube video of that shows a clip from the DR show and determines that he must be referring to AGTHX as well as one other American Funds Mutual fund:

https://www.youtube.com/watch?v=pYFRuBjXRNQ

[MrMoneySaver]

Dave Ramsey is great for his target market. He helps people a lot. His audience is not ready for a lot of nuance. The Mr. Money Mustache crew is not his target audience.

[DadJokes]

This is a pretty good reason to revive this thread, IMO:

https://www.fool.com/investing/2021/08/18/3-things-dave-ramsey-gets-wrong-about-retirement/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article

I'm not a huge Fool Fan, but I think they nailed it on this one. At least it's a good start on what should be a much longer list.

I don't necessarily agree with Dave, but I think #1 in this article is the reason Dave claims #2.  I don't think Dave ever says that the S&P500 returns 12%, I do think that he claims with good mutual funds you can return 12%.  Whether this magical mutual fund exists or not, depends on how big of a data set you are using.  He usually says something like choosing a mutual fund with 20 or 30 year track record... I think that AGTHX has returned something like 17% since it's inception in 1973, not sure what the actual CAGR is over that time frame less fees though... probably over 12%?

From his website: https://www.ramseysolutions.com/retirement/the-12-reality

When Dave Ramsey says you can expect to make a 12% return on your investments, he’s using a real number that’s based on the historical average annual return of the S&P 500.

[PDXTabs]

Dave Ramsey is bad at math. If you want a debt snowball smallest to largest that's fine. But don't tell people to take out 15 year mortgages and invest in actively managed mutual funds:

Mutual Funds
Mutual funds let you invest in a lot of companies at once, from the largest and most stable to the newest and fastest growing. They have teams of managers who choose companies for the fund to invest in based on the fund type.

Okay, so why is this the only investment option Dave recommends? Well, Dave likes mutual funds because spreading your investment across many companies helps you avoid the risks that come with investing in single stocks—like Dogecoin. Since mutual funds are actively managed by pros trying to pick stocks that will outperform the stock market, they’re a great option for long-term investing.

He's a charlatan that is preying on the weak, or he's an idiot, pick one.

[HPstache]

This is a pretty good reason to revive this thread, IMO:

https://www.fool.com/investing/2021/08/18/3-things-dave-ramsey-gets-wrong-about-retirement/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article

I'm not a huge Fool Fan, but I think they nailed it on this one. At least it's a good start on what should be a much longer list.

I don't necessarily agree with Dave, but I think #1 in this article is the reason Dave claims #2.  I don't think Dave ever says that the S&P500 returns 12%, I do think that he claims with good mutual funds you can return 12%.  Whether this magical mutual fund exists or not, depends on how big of a data set you are using.  He usually says something like choosing a mutual fund with 20 or 30 year track record... I think that AGTHX has returned something like 17% since it's inception in 1973, not sure what the actual CAGR is over that time frame less fees though... probably over 12%?

From his website: https://www.ramseysolutions.com/retirement/the-12-reality

When Dave Ramsey says you can expect to make a 12% return on your investments, he’s using a real number that’s based on the historical average annual return of the S&P 500.

I stand corrected... that's new info.

[DadJokes]

This is a pretty good reason to revive this thread, IMO:

https://www.fool.com/investing/2021/08/18/3-things-dave-ramsey-gets-wrong-about-retirement/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article

I'm not a huge Fool Fan, but I think they nailed it on this one. At least it's a good start on what should be a much longer list.

I don't necessarily agree with Dave, but I think #1 in this article is the reason Dave claims #2.  I don't think Dave ever says that the S&P500 returns 12%, I do think that he claims with good mutual funds you can return 12%.  Whether this magical mutual fund exists or not, depends on how big of a data set you are using.  He usually says something like choosing a mutual fund with 20 or 30 year track record... I think that AGTHX has returned something like 17% since it's inception in 1973, not sure what the actual CAGR is over that time frame less fees though... probably over 12%?

From his website: https://www.ramseysolutions.com/retirement/the-12-reality

When Dave Ramsey says you can expect to make a 12% return on your investments, he’s using a real number that’s based on the historical average annual return of the S&P 500.

I stand corrected... that's new info.

He's addressed why he uses that misleading number before. It was something along the lines of:

"If it gets people to invest, why does it matter whether the number is 10% or 12%? If you invest your whole life thinking you'll have $5 million at retirement and only have $4 million, are you going to be upset and wish that you hadn't invested at all? No, so quit nitpicking."

[Hash Brown]

I started listening to Dave Ramsey in the early 2000s, when I lived in Nashville, and his show had just started getting syndicated to a few other stations in the south.  He's pretty much the same guy now that he was then, except his kids are grown and his company is much, much bigger.  He might have had 100 employees back then but he now has well over 1,000.

One thing I never got about him was how averse he is to public transportation and especially bicycling.  Part of that comes from the character of Nashville - it's a really tough place to be a pedestrian or ride a bike. 

I think though the real problem people have with Dave isn't Dave - it's that people aren't used to people having real personalities anymore.  Yeah, his anti-Covid stance is insane.  But then again, most successful people have big blind spots like that. 

If you spend any time around sales teams and successful small business owners, you'll find that his sort of personality isn't all that rare.  It's just kept out of the mainstream media, since for the most part, advertisers shy away from such characters.  The thing about Dave's radio show is that a lot of the ads are for his own products, so there isn't going to be an advertiser boycott.   

[clarkfan1979]

I don't really follow much of his guidelines. However, I love watching his show. His level of arrogance is through the roof and very entertaining.  One of my favorite re-occurring comments that he gives is when he talks about his discretionary spending being a small percentage of his net worth. He says, "When I go out and buy a $70,000 truck, it's like you buying a biscuit. I don't put much thought into it because it's not a big purchase for me."

I enjoyed the article. I enjoyed the math section for point #2. I never understand how Dave got 12%. Now I know. When calculating my average return for my stocks and/or real estate, I have also done the compounding math. To me it's common sense. It difficult for me to understand that someone would do it differently and be praised for their high level of knowledge of personal finance.

Dave is very good with helping millions get out of debt. He deserves credit for that. However, when it comes to investing, his advice seems to lack some basic logic in more than a few areas. 

[youngwildandfree]

This is a pretty good reason to revive this thread, IMO:

https://www.fool.com/investing/2021/08/18/3-things-dave-ramsey-gets-wrong-about-retirement/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article

I'm not a huge Fool Fan, but I think they nailed it on this one. At least it's a good start on what should be a much longer list.

I don't necessarily agree with Dave, but I think #1 in this article is the reason Dave claims #2.  I don't think Dave ever says that the S&P500 returns 12%, I do think that he claims with good mutual funds you can return 12%.  Whether this magical mutual fund exists or not, depends on how big of a data set you are using.  He usually says something like choosing a mutual fund with 20 or 30 year track record... I think that AGTHX has returned something like 17% since it's inception in 1973, not sure what the actual CAGR is over that time frame less fees though... probably over 12%?

From his website: https://www.ramseysolutions.com/retirement/the-12-reality

When Dave Ramsey says you can expect to make a 12% return on your investments, he’s using a real number that’s based on the historical average annual return of the S&P 500.

I stand corrected... that's new info.

He's addressed why he uses that misleading number before. It was something along the lines of:

"If it gets people to invest, why does it matter whether the number is 10% or 12%? If you invest your whole life thinking you'll have $5 million at retirement and only have $4 million, are you going to be upset and wish that you hadn't invested at all? No, so quit nitpicking."

This made me sad-chuckle. I know quite a few people that define retirement as "that age I can no longer work" and they will take a look at how much money they have at that point. It's mind boggling/terrifying.

[GreenToTheCore]

This is a pretty good reason to revive this thread, IMO:

https://www.fool.com/investing/2021/08/18/3-things-dave-ramsey-gets-wrong-about-retirement/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article

I'm not a huge Fool Fan, but I think they nailed it on this one. At least it's a good start on what should be a much longer list.

Nice one. Agree that it's a surprisingly well written article.

[Zamboni]

I thought everyone already knew his investment advice is garbage (most likely he is lining the "Ramsey-certified financial planner" pockets with those front-loads).

But I love his advice on money issues with extended families and his folksy comments, like the ones above about "nit picking" or the truck and the biscuit. He's the first one to admit he's just a stubborn old hill billy: a marketing genius old hill billy who plugged into the religious financial fountain for spreading "the gospel of money management."

[RWD]

He's addressed why he uses that misleading number before. It was something along the lines of:

"If it gets people to invest, why does it matter whether the number is 10% or 12%? If you invest your whole life thinking you'll have $5 million at retirement and only have $4 million, are you going to be upset and wish that you hadn't invested at all? No, so quit nitpicking."

I agree with the sentiment, getting people to invest is better than them not investing at all. Though it does run the risk of them under-investing due to optimistic projections.

Also, the difference between 12% and 10% is more than that over a 40 year working career (what I'd assume from "invest your whole life"). 10% would end up with $2.8 million, not $4 million. Which is still plenty in this example. But not as fine if you were targeting a cool million and find yourself with only $567k at retirement.

[Missy B]

I like Dave for the way he always looks at money problems through the lens of relationship.
It seems like a lot of people don't want to think about the problems in their marriage, and he never lets them get away with pretending that isn't the real problem. And his solutions are clean, boundary-wise.

I never watched him at all before this year. I'd heard of him, but knew I didn't need his help. He's entertaining, and I was really sorry to learn he's a covidiot. And apparently, a very controlling, culty type of employer.

[RetiredAt63]

Overall I'm put off a bit by the religiosity in his writing, but I did get one very useful piece of advice from him -- "If you will live like no one else, later you can live like no one else."  I used that as the inspiration to amortize a refinanced mortgage balance of $40K CDN over five years, with weekly payments.

Did you calculate how much this coasted you over investing in the stock market?  I would think that this set you back several years from financial independence based on the stock markets return over the past decade.

Canada has different tax rules for principle residences.  This can make paying off a mortgage a better strategy.

[jinga nation]

I've listened to a bit of him over the years.

I like his message to eliminate debt.

I do not like his messages of suggesting some financial services which are questionable.

Suze Orman is very similar. There's is an aspect to monetizing advice. The Bogleheads wiki is unique in this regard.

[Zamboni]

As much as I want to like the lady guru, there's nothing that draws me to Suze Orman. I've read some of her books (from the library), I've seen her on TV spots, and I'm just bored and think she's not great. All of the financial gurus are repetitive for the purpose of messaging and making their own money, I get that, but she's repetitive in a way that bores me. I do really like Gail Vaz-Oxlade and her shows. She gives people credit when they try even if they are a little obnoxious but she can see right through their BS when they are being disingenuous. I like David Bach, the latte factor guy (automatic millionaire). He's charming and very high energy. Heck, even the financial advice book by Elizabeth Warren and her daughter is quite good. Suze Orman, though? Ugh.

Dave, on the other hand, is like getting some straight shooting from my crotchety late grandpa. Sometimes you might not like what Papa has to say, or you suspect one little part of his advice is a little off, but you love him anyway and there is no point in arguing with him. You know he means well, in his way.

[AO1FireTo]

I used to love listening to Dave Ramsey, I think his advice can help most people, and he is pretty entertaining.  He lost me during Covid with his actions and I stopped listening.  Just stick to personal finance, I don't want to hear your opinion on politics, Covid etc.

[RetiredAt63]

As much as I want to like the lady guru, there's nothing that draws me to Suze Orman. I've read some of her books (from the library), I've seen her on TV spots, and I'm just bored and think she's not great. All of the financial gurus are repetitive for the purpose of messaging and making their own money, I get that, but she's repetitive in a way that bores me. I do really like Gail Vaz-Oxlade and her shows. She gives people credit when they try even if they are a little obnoxious but she can see right through their BS when they are being disingenuous. I like David Bach, the latte factor guy (automatic millionaire). He's charming and very high energy. Heck, even the financial advice book by Elizabeth Warren and her daughter is quite good. Suze Orman, though? Ugh.

Dave, on the other hand, is like getting some straight shooting from my crotchety late grandpa. Sometimes you might not like what Papa has to say, or you suspect one little part of his advice is a little off, but you love him anyway and there is no point in arguing with him. You know he means well, in his way.

I know she has been mentioned before in "get out of debt" threads, but Gail Vaz Oxlade is excellent for basic finances.  'Till debt do us part was a great TV show and she has lots of good books.  She is pretty blunt when necessary.