Dave Ramsey: If you have $1.7M and blew $100k one time, it wouldn't change life

[ixtap]

It seems much of the Dave backlash here and elsewhere is that he's evangelical.

Every single criticism I've read of DR on this forum has to do with the terrible quality of his investing advice. I have never heard one person get upset at him due to his religious views.

I think promising an 8% withdrawal rate is criminal, whether Jesus loves you or not.

[Villanelle]

With those numbers I'd buy 2 economy seats, plus $10 at the grocery store to buy snack and another $15 if necessary at the overpriced airport shop for beverages, before I spent 12x on business. 


~~~~
And if you think the DR crticism is because of his religion, you aren't paying attention and are looking for something to fit your narrative.  IDC that he's religious--no matter the name or shape of his god--but I do care that he gives a lot of bad financial advice.  Invest in actively managed funds--"growth" funds in particular--and expecting ~12% returns?  God or no God, that's bad advice.  8% SWR?  God or no God, that's bad advice. No gifts or loans to children in any circumstances?  Not only is this IMO bad advice, it seems pretty contrary to the book Dave says he believes in.  Would Jesus say, "sorry, responsible 25 year old offspring, even though I have $1.5m in the bank and a 3% WR, I can't give or lend you $10k to help you pay off your medical bills.  Super glad the chemo worked, but suck it up and find a way to pay for it!"  Is that WJWD, or good advice?   Even "don't use credit cards" is bad advice for many (most?) people as there are financial and security benefits to them as long as you don't overspend. 

So yeah, it's not because he's an evangelical. It's because lots of his advice is bad and lots more of it (PAY OFF YOUR MORTGAGE ASAP!!!) lacks nuance and is bad for plenty of people. 

[41_swish]

It seems much of the Dave backlash here and elsewhere is that he's evangelical.

Every single criticism I've read of DR on this forum has to do with the terrible quality of his investing advice. I have never heard one person get upset at him due to his religious views.

I think promising an 8% withdrawal rate is criminal, whether Jesus loves you or not.

I started out my personal finance journey as a Dave Ramsey guy. I thought that his core message of live on less than you make and get out of debt was good. This was a good starting point for me, but as I learned more and more, I soon realized that his advice is lackluster at best.

Not having a credit score is very dumb in this credit-based economy. I will need to finance a home and using credit cards as a tool is good.

As I learned more and more, hearing him say that up to a 10% rate of withdrawal was completely sustainable was INSANITY. I get that his model relies on you being completely debt free, but the average mustache only usually has a mortgage and maybe a car loan at a good rate. When I have looked at the trinity study, a 10% rate of withdrawal does not have an amazing success rate.

[Geppetto]

I encountered Dave Ramsey at the right time in life: when I was young and in graduate school, and living a lot larger than "beans-and-rice, rice-and-beans" while racking up a fair amount of student debt. The overall message was the same as I later encountered with MMM: Your Debt Is An Emergency. Ramsey's radio program ignited an internal desire to live within my means and erase the debt.

I stopped listening to it organically when I was done commuting to grad school. But I spent the next 5 years living like a mouse and deferring gratification and obliterating the debt - with the full support of my thankfully frugal spouse - launching our family into a prosperous future. So I'm grateful to Ramsey for the overall inspiration, specifically when I received it. I wouldn't be surprised if the quality of the programming has declined in the meantime (and it sounds like there are some off-the-wall ideas on offer now), since the whole Ramsey thing turned into a big ecosystem of commodified financial stuff. But, three cheers for Dave Ramsey's influence 20 years ago.

[Scandium]

People don't go around criticising others for spending inordinate amounts of time/money/energy on children, pets or other things - I

Ehh, what? First time on the internet?

[41_swish]

People don't go around criticising others for spending inordinate amounts of time/money/energy on children, pets or other things - I

Ehh, what? First time on the internet?

I actually think it's a tale as old as time.

[EliteZags]

Ramsey is so hung on "there's no such thing as good debt" that he once went as far as saying he would refuse a $1B interest free loan

most asinine thing I've ever heard

that's 8 figures a year in just return on treasuries

[41_swish]

Ramsey is so hung on "there's no such thing as good debt" that he once went as far as saying he would refuse a $1B interest free loan

most asinine thing I've ever heard

that's 8 figures a year in just return on treasuries

I think the Ramsey method is borderline all emotion. I think that his system works on just getting out of debt at any cost and then never ever going back for any reason.

Even though he does allow 15 year fixed rate mortgages, he would still prefer you buy a home cash. It is wild.

You should not get drunk off credit card debt and 10% APR 50k car loans, but a 3-4% mortgage won't kill you.

[FIREin2018]

It seems much of the Dave backlash here and elsewhere is that he's evangelical.

Every single criticism I've read of DR on this forum has to do with the terrible quality of his investing advice. I have never heard one person get upset at him due to his religious views.

I think promising an 8% withdrawal rate is criminal, whether Jesus loves you or not.

Wait, he's advocating a 8% swr when you retire?!?
Die with $0 or die homeless?

I thought the 7% swr rate in my sig was aggressive.
How does he justify 8%? What's his math?

[FIREin2018]

Ramsey is so hung on "there's no such thing as good debt" that he once went as far as saying he would refuse a $1B interest free loan

most asinine thing I've ever heard

that's 8 figures a year in just return on treasuries

I think the Ramsey method is borderline all emotion. I think that his system works on just getting out of debt at any cost and then never ever going back for any reason.

Even though he does allow 15 year fixed rate mortgages, he would still prefer you buy a home cash. It is wild.

yes, he's targeting people's emotions instead of logic. he said financial decision making for broke people is 20% logic, 80% emotion.
So that's why pay off your smallest credit card instead of highest interest. You will feel good at that success which would encourage you to continue.

I only started listening to DR the past few months because random videos get thrown at me.
He says if mortgage: get 15yr *AND* no PMI *AND* payment is only 25% of you're monthly take hoome pay even though you qualify for twice that.

[FIREin2018]

Yeah I might be being a little overly dramatic here.

My point is just that maybe OP can instead of thinking so much about if they can afford x thing and investment returns, to instead think more about if x thing gives them the best bang for their happiness bucks or not.

With the price of one business class flight they can buy a lot of amusement park tickets, video games, hiking shoes, time out playing cards with friends, etc. There are a lot of things that may be much cheaper that may make them happier in the long run.

I would spend some time thinking about why they want the business class flights, the new car, and so on, and if there are other things that they might enjoy more that may also cost less so they don't have to worry about the money either.

I can find a lot of things to spend 9k on that would make me way happier than one flight, but maybe that's just me, idk.

Honestly 9k can buy me a lifetime supply of hiking shoes, and spending a lifetime hiking in nature makes me way happier than one flight.

Blow $9k on something that brings more happiness than 1 business class flight.
Never thought of it that way.

Yeah, i guess Xbox + games comes to mind and would cost waaaay less than $9k.

Edit:
Bought the $700 airfare.
Will choose something else to blow the $9k on.
Thx

Awesome!

So i went to a chocolate factory tour in 3rd world country. They make their chocolates onsite and more natural and blah blah blah.
they gave out samples and it did taste better that stuff i buy at costco.
but it costs 5x more!
it was $9 for a single bar vs $10 for 5 bars at costco.

Does it taste 5x better? no.
But i bought one anyway because of this thread.

[Scandium]

Yeah I might be being a little overly dramatic here.

My point is just that maybe OP can instead of thinking so much about if they can afford x thing and investment returns, to instead think more about if x thing gives them the best bang for their happiness bucks or not.

With the price of one business class flight they can buy a lot of amusement park tickets, video games, hiking shoes, time out playing cards with friends, etc. There are a lot of things that may be much cheaper that may make them happier in the long run.

I would spend some time thinking about why they want the business class flights, the new car, and so on, and if there are other things that they might enjoy more that may also cost less so they don't have to worry about the money either.

I can find a lot of things to spend 9k on that would make me way happier than one flight, but maybe that's just me, idk.

Honestly 9k can buy me a lifetime supply of hiking shoes, and spending a lifetime hiking in nature makes me way happier than one flight.

Blow $9k on something that brings more happiness than 1 business class flight.
Never thought of it that way.

Yeah, i guess Xbox + games comes to mind and would cost waaaay less than $9k.

Edit:
Bought the $700 airfare.
Will choose something else to blow the $9k on.
Thx

Awesome!

So i went to a chocolate factory tour in 3rd world country. They make their chocolates onsite and more natural and blah blah blah.
they gave out samples and it did taste better that stuff i buy at costco.
but it costs 5x more!
it was $9 for a single bar vs $10 for 5 bars at costco.

Does it taste 5x better? no.
But i bought one anyway because of this thread.

Personally I'd rather eat amazing chocolate 1/5th as often as shitty chocolate from costco. That just sounds better overall. Healthier too.

[ixtap]

It seems much of the Dave backlash here and elsewhere is that he's evangelical.

Every single criticism I've read of DR on this forum has to do with the terrible quality of his investing advice. I have never heard one person get upset at him due to his religious views.

I think promising an 8% withdrawal rate is criminal, whether Jesus loves you or not.

Wait, he's advocating a 8% swr when you retire?!?
Die with $0 or die homeless?

I thought the 7% swr rate in my sig was aggressive.
How does he justify 8%? What's his math?

I am not sure if it is SWR or constant percentage, but the "logic" is that his approved advisors will give you a 12% return minus 4% inflation = 8%.

[41_swish]

Ramsey is so hung on "there's no such thing as good debt" that he once went as far as saying he would refuse a $1B interest free loan

most asinine thing I've ever heard

that's 8 figures a year in just return on treasuries

I think the Ramsey method is borderline all emotion. I think that his system works on just getting out of debt at any cost and then never ever going back for any reason.

Even though he does allow 15 year fixed rate mortgages, he would still prefer you buy a home cash. It is wild.

yes, he's targeting people's emotions instead of logic. he said financial decision making for broke people is 20% logic, 80% emotion.
So that's why pay off your smallest credit card instead of highest interest. You will feel good at that success which would encourage you to continue.

I only started listening to DR the past few months because random videos get thrown at me.
He says if mortgage: get 15yr *AND* no PMI *AND* payment is only 25% of you're monthly take hoome pay even though you qualify for twice that.

When it comes to credit card debt, I actually do see the psychological side of the debt snowball method. However, once you start working with bigger and bigger numbers like a mortgage vs maxing out retirement accounts the math gets way more interesting.

A lot of money is emotional, but you still need to be logical and crank the math. There have certainly been times where I did the emotional thing, instead of the logical thing. My best example was nuking 20k of 4.0 % student loans. In hindsight I really should have just rode those forever and maxxed my retirement accounts. I do regret missing a year of a maxed roth ira for that.

[Tempname23]

Permission to splurge:
https://www.facebook.com/reel/904247011525222

I Fired in 2018.
7yrs later, i have more $ now thanks to the hot stock market.

If i blow the difference on hookers/Coke, it should make no difference in my life at all.

As you may have heard, there are those would spend the money on hookers and blow and then just waste the rest.