Author Topic: Is Dave Ramsey a bad word here?  (Read 24268 times)

mindaugas

  • Bristles
  • ***
  • Posts: 367
  • Location: Littleton, CO
    • Mike Says Meh
Is Dave Ramsey a bad word here?
« on: August 05, 2016, 09:14:42 AM »
I started with MMM around 2011 which helped us buy our first house, reno it with cash, then sold and moved into a larger home when my wife and I started breeding. 3 kids under 4 later and the credit cards all had balances, 2 new 2015 cars, and the bike was hanging idly in the garage. We were never under water or without savings. But everything MMM and these forums taught us had been thrown out the window. I was so afraid of a palm to the face I wouldn't even click on the new blogs or visit these forums, I was certain MMM could smell my debt debauchery. Then I heard Dave Ramsey. At first I dismissed what he was saying because I didn't think I could pray my debts away. I refused to buy his books or myriad of services he endorsed. But I was missing the point. MMM has endorsements, ads, etc. And I'm not the kind of person that is offended by someone else's religious beliefs. Anyway, something clicked or sunk in and I bought one of his books and then got sucked into the baby steps. I was hearkened back to MMM when he used descriptions like "the house is on fire" or "you need to be on a rice and beans diet". So here I am trudging through baby step 2, I drank the kool-aid. 

tl;dr: I know DR isn't well loved here. I'm wondering why?

boarder42

  • Walrus Stache
  • *******
  • Posts: 7849
Re: Is Dave Ramsey a bad word here?
« Reply #1 on: August 05, 2016, 09:18:39 AM »
hes a good first step.  but a lot of his recommendations are for emotional gains vs the best financial solution.  i dont think he's hated there are many who end up here after using his steps to get back on track.  but to pay down the smallest loan balance first regardless of the interest rate just to get an emotional "gain" is ass backwards for my mathmatical mind but if it work for you it works.

BigHaus89

  • Stubble
  • **
  • Posts: 210
  • Age: 30
  • Location: NW
  • Ride the Spiral to the End
Re: Is Dave Ramsey a bad word here?
« Reply #2 on: August 05, 2016, 09:20:01 AM »
His financial advice is a little too basic and does not follow the math as it does in the MMM community. Nothing wrong with his advice, but MMM readers seem to strive for a more optimal/efficient approach.

Ann

  • Bristles
  • ***
  • Posts: 267
Re: Is Dave Ramsey a bad word here?
« Reply #3 on: August 05, 2016, 09:28:32 AM »
I would say Ramsey is a great beginning and over all a decent personal finance guy.  He's not a FIRE guy, though, and maybe that's why you don't hear much about him on MMM?  The FIRE community also seems to strongly overlap with environmental responsibility, which Dave doesn't highlight at all.  And, yes, his religious ties are off-putting to some(many?).

SwordGuy

  • Walrus Stache
  • *******
  • Posts: 5897
  • Location: Fayetteville, NC
Re: Is Dave Ramsey a bad word here?
« Reply #4 on: August 05, 2016, 09:32:24 AM »
I think Dave Ramsey is absolutely great at getting people motivated to change their behavior for the better. 

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

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

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

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

Where I do NOT NOT NOT NOT like Dave Ramsey is in his investing advice.  I think he sold out as I've seen advice to buy expensive front-loaded mutual funds with high fees.   I would not be surprised to find out he's getting a cut.  It's bad advice.  Vanguard or other low fee funds are better.

rubybeth

  • Handlebar Stache
  • *****
  • Posts: 1402
  • Location: Midwest
Re: Is Dave Ramsey a bad word here?
« Reply #5 on: August 05, 2016, 09:33:29 AM »
DR is how my husband and I got started with some of the more advanced financial stuff. I got bored with it after we were getting really close to paying off our debt. It kind of felt like, "Now what?" We don't have a house or kids, so the steps didn't really fit with our goals. So instead of Baby Step 4 (invest 15%), we just started investing as much as we could and started our stash. For me, Dave doesn't get specific enough about investing, and even MMM's advice is pretty basic, so I did my own reading. I think anything that gets you interested in budgeting and knowing more about money is a good thing.

MrsDinero

  • Pencil Stache
  • ****
  • Posts: 935
Re: Is Dave Ramsey a bad word here?
« Reply #6 on: August 05, 2016, 09:50:08 AM »
I don't think so.  I started with Dave Ramsey long before I discovered MMM.  It was a great starting point for me because I learned the basic of budgeting and snowballing my debt.  I don't think 10-years-ago-Me would have been able to handle what MMM was saying/doing.

boarder42

  • Walrus Stache
  • *******
  • Posts: 7849
Re: Is Dave Ramsey a bad word here?
« Reply #7 on: August 05, 2016, 09:53:26 AM »
i do however think its crazy you found this in 2011 and have 2 new 2015 SUVs ...  i mean cmon now. you found the holy grail and started down a good path and then pissed in it and drank it.

oldladystache

  • Pencil Stache
  • ****
  • Posts: 692
  • Age: 74
  • Location: coastal southern california
Re: Is Dave Ramsey a bad word here?
« Reply #8 on: August 05, 2016, 10:18:17 AM »
I've been hearing promos for his radio show in which he says anyone with a high credit score got it by paying thousands of dollars in interest. Absolutely not true. So he lies.

ketchup

  • Magnum Stache
  • ******
  • Posts: 4023
  • Age: 28
Re: Is Dave Ramsey a bad word here?
« Reply #9 on: August 05, 2016, 10:21:25 AM »
Dave Ramsey can be a good "wake up call" to some people to begin getting their shit together.

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

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

EDIT: Looks like he also advocates an 8% withdrawal rate in retirement?  What the hell?
« Last Edit: August 05, 2016, 10:23:14 AM by ketchup »

Zikoris

  • Magnum Stache
  • ******
  • Posts: 3511
  • Age: 33
  • Location: Vancouver, BC
  • Vancouverstachian
Re: Is Dave Ramsey a bad word here?
« Reply #10 on: August 05, 2016, 10:22:20 AM »
His math sucks, and he gives bad investment advice. I suppose he's okay for clueless people who really need things dumbed down though.

mindaugas

  • Bristles
  • ***
  • Posts: 367
  • Location: Littleton, CO
    • Mike Says Meh
Re: Is Dave Ramsey a bad word here?
« Reply #11 on: August 05, 2016, 10:25:38 AM »
i do however think its crazy you found this in 2011 and have 2 new 2015 SUVs ...  i mean cmon now. you found the holy grail and started down a good path and then pissed in it and drank it.

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

I'm selling one of them though, inspection is next week to put it on Beepi.

Playing with Fire UK

  • Magnum Stache
  • ******
  • Posts: 2612
Re: Is Dave Ramsey a bad word here?
« Reply #12 on: August 05, 2016, 10:26:32 AM »
Where I do NOT NOT NOT NOT like Dave Ramsey is in his investing advice.  I think he sold out as I've seen advice to buy expensive front-loaded mutual funds with high fees.   I would not be surprised to find out he's getting a cut.  It's bad advice.  Vanguard or other low fee funds are better.
+1

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

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

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

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

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

gggggg

  • Bristles
  • ***
  • Posts: 430
Re: Is Dave Ramsey a bad word here?
« Reply #13 on: August 05, 2016, 10:30:48 AM »
I love Dave, and still listen to him every day. He is more for the folks in the earlier stages of the personal finance game, like others have said. His baby steps are a great foundation for building your empire. I don't use his investing advice (step 7); this is where I part ways with him. His religious affiliation doesn't bother me, just ignore it if you want. As far as his "pay the smallest debt first" instruction: I agree with him. The folks in over their heads are lost, and need the mental boost of the snowball, imo.

mindaugas

  • Bristles
  • ***
  • Posts: 367
  • Location: Littleton, CO
    • Mike Says Meh
Re: Is Dave Ramsey a bad word here?
« Reply #14 on: August 05, 2016, 10:31:12 AM »
Where I do NOT NOT NOT NOT like Dave Ramsey is in his investing advice.  I think he sold out as I've seen advice to buy expensive front-loaded mutual funds with high fees.   I would not be surprised to find out he's getting a cut.  It's bad advice.  Vanguard or other low fee funds are better.
+1

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

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

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

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

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

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

I haven't heard his specific investing advice, but I also haven't gotten that far in the book. I figured I would take his advice and stop with the baby step I am on, the debt snow ball. When it does come to investing I've read enough MMM and here to know low fees are the way to go and I already have an account with Vanguard.

mindaugas

  • Bristles
  • ***
  • Posts: 367
  • Location: Littleton, CO
    • Mike Says Meh
Re: Is Dave Ramsey a bad word here?
« Reply #15 on: August 05, 2016, 10:33:31 AM »
As far as his "pay the smallest debt first" instruction: I agree with him. The folks in over their heads are lost, and need the mental boost of the snowball, imo.

+1 and I think I see where everyone is coming from. But his advice has mass appeal. As much as I like the idea of the debt snowball, I'm not even strictly following it. I'm paying down the debt with the highest payment first to increase cash flow to hose down the next highest interest rate. Thank MMM for that. But at least it got me back on track.

Inaya

  • Handlebar Stache
  • *****
  • Posts: 1621
  • Age: 34
  • Location: Chicago, IL
Re: Is Dave Ramsey a bad word here?
« Reply #16 on: August 05, 2016, 10:36:48 AM »
Where I do NOT NOT NOT NOT like Dave Ramsey is in his investing advice.  I think he sold out as I've seen advice to buy expensive front-loaded mutual funds with high fees.   I would not be surprised to find out he's getting a cut.  It's bad advice.  Vanguard or other low fee funds are better.
+1

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

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

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

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

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

ShoulderThingThatGoesUp

  • Magnum Stache
  • ******
  • Posts: 3057
  • Location: Emmaus, PA
Re: Is Dave Ramsey a bad word here?
« Reply #17 on: August 05, 2016, 10:52:04 AM »
So what's your plan to not fall in the hole again? You knew buying (or leasing!) new SUVs was dumb and you did it anyways. How will you change your mindset and your family's mindset for the better?

Playing with Fire UK

  • Magnum Stache
  • ******
  • Posts: 2612
Re: Is Dave Ramsey a bad word here?
« Reply #18 on: August 05, 2016, 11:10:37 AM »
"Dave Ramsey says ..." is not a coherent argument.

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

Yep, they are both wrong in the same way.

Any argument based on 'this worked for one person so is the best and only solution for every person in the world under all circumstances' needs to be called out for the bullshit it is.

mindaugas

  • Bristles
  • ***
  • Posts: 367
  • Location: Littleton, CO
    • Mike Says Meh
Re: Is Dave Ramsey a bad word here?
« Reply #19 on: August 05, 2016, 11:16:28 AM »
So what's your plan to not fall in the hole again? You knew buying (or leasing!) new SUVs was dumb and you did it anyways. How will you change your mindset and your family's mindset for the better?

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

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

Lot of tongue in cheek, but seriously good question. I should think about the plan. FIRE is so far away I can't even see it past the mountain of debt. But if I stick to my plan I could be looking at the distant blurry figure of FIRE in 2 years ... and then what, maybe 10 years to get enough stash for FIRE? I'd only be 46. I could still ride my bike and become a ninja warrior. And a 2015 5.0 Mustang in 2028 will probably only be $3,000 Trumpdollars.

TheAnonOne

  • Handlebar Stache
  • *****
  • Posts: 1528
Re: Is Dave Ramsey a bad word here?
« Reply #20 on: August 05, 2016, 11:17:11 AM »
I started listening to him after being on MMM for 3 years. (I started listening to him a few weeks ago just to see other viewpoints)

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

Really, though, once you are in the Boggle/MMM/ERE world, Dave is really, not the best path.(mathematically)

gaja

  • Handlebar Stache
  • *****
  • Posts: 1287
Re: Is Dave Ramsey a bad word here?
« Reply #21 on: August 05, 2016, 11:44:10 AM »
The big difference for me is the goal. For DR the goal is to become rich, so you can live the lifestyle and spend a lot of money. For MMM the goal is to find a sustainable lifestyle that you can enjoy for the rest of your life.

I think DR helps a lot of people in his babysteps 1-3. For the investment advice, I can't really get riled up because a) getting people to save in a bad product is better than them not saving at all, and b) I think he believes it.

Playing with Fire UK

  • Magnum Stache
  • ******
  • Posts: 2612
Re: Is Dave Ramsey a bad word here?
« Reply #22 on: August 05, 2016, 02:03:06 PM »
b) I think he believes it.

I would believe it too if it was making me vast amounts of money.

boarder42

  • Walrus Stache
  • *******
  • Posts: 7849
Re: Is Dave Ramsey a bad word here?
« Reply #23 on: August 05, 2016, 02:05:04 PM »
what is his investment advice?

Zikoris

  • Magnum Stache
  • ******
  • Posts: 3511
  • Age: 33
  • Location: Vancouver, BC
  • Vancouverstachian
Re: Is Dave Ramsey a bad word here?
« Reply #24 on: August 05, 2016, 02:40:56 PM »

v8rx7guy

  • Handlebar Stache
  • *****
  • Posts: 1401
  • Location: Bellingham, WA
Re: Is Dave Ramsey a bad word here?
« Reply #25 on: August 05, 2016, 02:49:21 PM »
I too started with Dave Ramsey.  He was a great wake-up call and was the real reason I my wife and I actually started to budget and soon after paid off my student loan and credit cards within 2 years.  I know actually teach his "Financial Peace University" through my church... starting with a fresh group this September.  I think it's a great start for so many people that go thru my class, the change in thinking is dramatic.  I do think that his investment advice is a little bunk, with his 12% ROI promise and cookie cutter mutual fund allocations, but his advice is what it is and it does get people starting to save for retirement even though the fees might be high.

Uturn

  • Pencil Stache
  • ****
  • Posts: 671
  • Age: 49
  • Location: Holly Springs, NC
Re: Is Dave Ramsey a bad word here?
« Reply #26 on: August 05, 2016, 03:10:09 PM »
I love his steps 1-3, then we diverge rapidly.  Why smallest debt first?   Because it's easier to see progress.   In everything else in life, we start small and easy.  We learn the fundamentals, then move on to more advanced skills.  We fuck up along the way, and I would rather fuck up small.   

mindaugas

  • Bristles
  • ***
  • Posts: 367
  • Location: Littleton, CO
    • Mike Says Meh
Re: Is Dave Ramsey a bad word here?
« Reply #27 on: August 05, 2016, 03:19:46 PM »
I love his steps 1-3, then we diverge rapidly.  Why smallest debt first?   Because it's easier to see progress.   In everything else in life, we start small and easy.  We learn the fundamentals, then move on to more advanced skills.  We fuck up along the way, and I would rather fuck up small.

I'm kind of in the same boat. idk if I want just $1k in savings though. I think I'd rather have the "fully funded" emergency fund, but I'm a nervous nelly.

mindaugas

  • Bristles
  • ***
  • Posts: 367
  • Location: Littleton, CO
    • Mike Says Meh
Re: Is Dave Ramsey a bad word here?
« Reply #28 on: August 05, 2016, 03:30:55 PM »
Listening to most of his calls, its mind boggling that these people made it through life. Some of the shit they do, buy, waste is beyond comprehension. For them, having a specific, simple and defined goal is key imo.

At least those people are seeking help. It boggles my mind when others are resistant to getting out of debt.

jjcamembert

  • Stubble
  • **
  • Posts: 153
Re: Is Dave Ramsey a bad word here?
« Reply #29 on: August 05, 2016, 04:32:09 PM »
I read Dave Ramsey's book maybe 8 years ago. Even then as a kid out of college I didn't find it very insightful. And then when I saw, "after you pay off your house, then you'll have tons of money to give away" I thought, "Then why would I keep going to work?"

SwordGuy

  • Walrus Stache
  • *******
  • Posts: 5897
  • Location: Fayetteville, NC
Re: Is Dave Ramsey a bad word here?
« Reply #30 on: August 05, 2016, 06:43:44 PM »
I like Ramsey a lot. I'm a fan 😃

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

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


Remember, half of all people are dumber than average.


Riff

  • Stubble
  • **
  • Posts: 116
  • Location: West Michigan
Re: Is Dave Ramsey a bad word here?
« Reply #31 on: August 05, 2016, 08:33:12 PM »
Dave has a different target audience than those of us here.  Sure, his pay the smallest debt first doesn't make sense mathematically.  Whenever he has a caller question him about that, he replies that math isn't the problem, because if they were good at math, they wouldn't be in so much debt. 

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

Plus, Dave isn't an early retirement guru.  More of a do these things, retire comfortably at 65 kind of guru.

pbkmaine

  • Walrus Stache
  • *******
  • Posts: 8371
  • Age: 63
  • Location: The Villages, Florida
Re: Is Dave Ramsey a bad word here?
« Reply #32 on: August 05, 2016, 09:29:27 PM »
I think he's fine on debt and spending, but has absolutely no clue on investing.

MissNancyPryor

  • Pencil Stache
  • ****
  • Posts: 538
  • Age: 50
  • Location: Northwest USA
  • The Stewardess is Flying the Plane!
Re: Is Dave Ramsey a bad word here?
« Reply #33 on: August 05, 2016, 09:43:05 PM »
I read Dave Ramsey's book maybe 8 years ago. Even then as a kid out of college I didn't find it very insightful. And then when I saw, "after you pay off your house, then you'll have tons of money to give away" I thought, "Then why would I keep going to work?"

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

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

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

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

I agree that DR is really geared toward those who are just about clueless with money and have gotten themselves way in over their heads; it is a good way to start.  I think we forget how many out there simply don't get it and are living the minimum payments lifestyle without much hope.  He does offer a very simplified path out for those who can't even comprehend the MMM model. 

tonycar17

  • 5 O'Clock Shadow
  • *
  • Posts: 19
Re: Is Dave Ramsey a bad word here?
« Reply #34 on: August 06, 2016, 11:28:05 AM »
I love Dave......disagree with some of what he says, specifically around the investing piece, but honestly, if I had not stumbled across him about 5-6 years ago, I would still be pissing away a ery good combined income and sitting with student loans that are 20 years old. 

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

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

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

TC

TheStachery

  • Guest
Re: Is Dave Ramsey a bad word here?
« Reply #35 on: August 06, 2016, 12:00:40 PM »
I love Dave......disagree with some of what he says, specifically around the investing piece, but honestly, if I had not stumbled across him about 5-6 years ago, I would still be pissing away a ery good combined income and sitting with student loans that are 20 years old. 

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

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

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

TC

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

 

Playing with Fire UK

  • Magnum Stache
  • ******
  • Posts: 2612
Re: Is Dave Ramsey a bad word here?
« Reply #36 on: August 07, 2016, 12:43:50 AM »
The smartvestors and ELPs are making money for Dave.

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

Tithing during a brankrupy feels like taking money out of someone's wallet and then claiming it's okay because you've given the money away. 

mustachepungoeshere

  • Handlebar Stache
  • *****
  • Posts: 2384
  • Location: Sydney, Oz
Re: Is Dave Ramsey a bad word here?
« Reply #37 on: August 07, 2016, 01:59:48 AM »
My path to this forum was GRS-DR-MMM.

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

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

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

kayvent

  • Pencil Stache
  • ****
  • Posts: 637
  • Location: Canada
Re: Is Dave Ramsey a bad word here?
« Reply #38 on: August 07, 2016, 05:07:37 AM »
hes a good first step.  but a lot of his recommendations are for emotional gains vs the best financial solution.  i dont think he's hated there are many who end up here after using his steps to get back on track.  but to pay down the smallest loan balance first regardless of the interest rate just to get an emotional "gain" is ass backwards for my mathmatical mind but if it work for you it works.

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

I also believe there is a silent assumption in the snowballing technique. It is who you owe money too. Thinking about the debts of my debtees, their smallest debts are very personal (friends, family) and their largest debts are to impersonal entities (government, bank, or credit card company). There is a social and visible benefit to paying off personal debts. Some people drowning in debt also feel like they are on an isolated island because they feel they have put a barrier between them and their friends/family due to trivially sized 'loans'.
« Last Edit: August 07, 2016, 05:10:52 AM by kayvent »

Playing with Fire UK

  • Magnum Stache
  • ******
  • Posts: 2612
Re: Is Dave Ramsey a bad word here?
« Reply #39 on: August 07, 2016, 05:49:04 AM »
... There is a social and visible benefit to paying off personal debts. Some people drowning in debt also feel like they are on an isolated island because they feel they have put a barrier between them and their friends/family due to trivially sized 'loans'.

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

In the UK PF sites tend to differentiate between priority and non-priority debts. Priority debts tend to include those that can put you in prison (Council Tax, HMRC, TV Licence) and those that can make you homeless. I'd include loans to family in this category.

boarder42

  • Walrus Stache
  • *******
  • Posts: 7849
Re: Is Dave Ramsey a bad word here?
« Reply #40 on: August 07, 2016, 06:05:58 AM »
hes a good first step.  but a lot of his recommendations are for emotional gains vs the best financial solution.  i dont think he's hated there are many who end up here after using his steps to get back on track.  but to pay down the smallest loan balance first regardless of the interest rate just to get an emotional "gain" is ass backwards for my mathmatical mind but if it work for you it works.

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

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

I also believe there is a silent assumption in the snowballing technique. It is who you owe money too. Thinking about the debts of my debtees, their smallest debts are very personal (friends, family) and their largest debts are to impersonal entities (government, bank, or credit card company). There is a social and visible benefit to paying off personal debts. Some people drowning in debt also feel like they are on an isolated island because they feel they have put a barrier between them and their friends/family due to trivially sized 'loans'.

Sofa King

  • Bristles
  • ***
  • Posts: 381
Re: Is Dave Ramsey a bad word here?
« Reply #41 on: August 07, 2016, 04:22:09 PM »
I think Dave Ramsey is absolutely great at getting people motivated to change their behavior for the better. 




I concur!!!!

whodidntante

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: Is Dave Ramsey a bad word here?
« Reply #42 on: August 07, 2016, 08:13:59 PM »
It's the story
Of David Ramsey
Who got over leveraged on investment real estate
Now he says all debt is bad
And quotes the Bible
Overgeneralization from self

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

The Davie Bunch
The Davie Bunch
That's the way
We became
The Davie Bunch

TheStachery

  • Guest
Re: Is Dave Ramsey a bad word here?
« Reply #43 on: August 08, 2016, 11:37:07 AM »
One thing I forgot to mention is that I hate his credit card advice. I understand cutting them up for people in debt, but he swears by his debt card. (more on that in a minute)  I think it's just free money left on the table.  I'm not talking about churning, just paying for things with a cc you would normally pay for anyway and collecting the rewards.  He claims that by using a credit card you are apt to purchasing more per transaction.  I don't know bout y'all but i don't ever go into a store and say hmm, i'm going to impluse buy this because i'm putting it on a cc card.  if you have a budget(like YNAB classic), that can't happen without you knowing it.

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

boarder42

  • Walrus Stache
  • *******
  • Posts: 7849
Re: Is Dave Ramsey a bad word here?
« Reply #44 on: August 08, 2016, 11:52:06 AM »
One thing I forgot to mention is that I hate his credit card advice. I understand cutting them up for people in debt, but he swears by his debt card. (more on that in a minute)  I think it's just free money left on the table.  I'm not talking about churning, just paying for things with a cc you would normally pay for anyway and collecting the rewards.  He claims that by using a credit card you are apt to purchasing more per transaction.  I don't know bout y'all but i don't ever go into a store and say hmm, i'm going to impluse buy this because i'm putting it on a cc card.  if you have a budget(like YNAB classic), that can't happen without you knowing it.

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

yes i'm in your camp on this but far too many americans cant use a credit card as they would use a debit card and see it as "free money" ...

Jrr85

  • Handlebar Stache
  • *****
  • Posts: 1204
Re: Is Dave Ramsey a bad word here?
« Reply #45 on: August 08, 2016, 12:38:32 PM »
He really is great if you understand his audience.  He basically is very successful at realizing that money management is mainly a behavioral/emotional issue for most people, and he's actually successful at tapping into people's emotions and getting them to make positive changes.  His advice is occasionally spectacularly wrong (or maybe more accurately, it's often spectacularly wrong but it's consistently wrong about the same few issues), but even with some bad advice mixed in, if you follow his program, it still results in you getting rich, just maybe more slowly than you would with better advice.  And for much of his audience, the alternative without Dave Ramsey is not to get rich more quickly, but to work until you or your body gives up, retire with lots of debt and no assets and live off social security. 

DoubleNickels

  • 5 O'Clock Shadow
  • *
  • Posts: 15
Re: Is Dave Ramsey a bad word here?
« Reply #46 on: August 08, 2016, 12:39:56 PM »
I think that Dave Ramsey has one interest one interest alone:  Padding his bank accounts. Kudos to him:  He figured out how to mass market him fairly self-evident advice and make a buck.   Does he really care whether YOU get out of debt?  No.   Only to the extent that your success may lead to him being able to sell more.

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

frugaliknowit

  • Handlebar Stache
  • *****
  • Posts: 1671
Re: Is Dave Ramsey a bad word here?
« Reply #47 on: August 09, 2016, 02:02:43 PM »
For me, Dave Ramseyism is a "menu religion".  I like some of it, disagree with some of it.

Disagreements:

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

Agree with:

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


libertarian4321

  • Handlebar Stache
  • *****
  • Posts: 1372
Re: Is Dave Ramsey a bad word here?
« Reply #48 on: August 09, 2016, 02:16:59 PM »
what is his investment advice?

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

It's pretty bad.

Among the nuggets of fine advice:

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

OMFG!  Why?

But I think it's his Jihad (or Crusade?) against any credit card use, for anyone, at any time, that seems most ridiculous.
« Last Edit: August 09, 2016, 02:26:44 PM by libertarian4321 »

asauer

  • Pencil Stache
  • ****
  • Posts: 591
  • Location: North Carolina
Re: Is Dave Ramsey a bad word here?
« Reply #49 on: August 09, 2016, 06:05:11 PM »
I don't think it's bad.  I consider DR to be high school and MMM to be a graduate degree.  DR program helped us to change some behaviors and get out of debt.  Now MMM is helping us to pay off the mortgage and RE!