Dave Ramsey advice that pisses me off

[fb132]

I like that he basically guarantees you'll get 12% in the stock market over the next three decades if you just invest in growth, aggressive growth, growth and income and international funds at 25% each.  He runs calculations, often incorrectly, over the phone at this amazingly high projected annual return and says to the caller they'll have $6M in no time at all.  And then tells callers to pay off their 3% mortgage. 
I'd pay a lot of money to see his actual market returns over the past 20 years.

Actually I wouldn't be surprised if he does have good returns (money talks), but remember, he is advising financial newbies on investments, that is a recipe for disaster.

[libertarian4321]

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

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

There took less then one minute to find one hater here:)

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

I take the good parts of both of them and Robert Kioysaki is a multimillionaire. So what if one of his companies went bankrupt he is still a millionaire. Now I would not pay for his expensive courses, but seeing youtube videos or reading a book lent from library cost nothing.

He's a millionaire because he's a master huckster/slick salesman, not a financial genius.

Like most "get rich" slicksters, he makes his millions selling books, tapes and seminars to those not sophisticated enough to see that he's a thinly veiled con artist. 

He ain't the first, and he won't be the last.  These guys have been around forever. 

Anyone remember Charles Givens?  He was selling snake oil back when Kiyosaki was still just a broke ass loser.  Givens was one smooth talking, slimy SOB, but he (like Kiyosaki) was really, really good at selling snake oil.

As long as there a gullible people looking to get rich quick, some fast talking slickster will be there to take their money.

[Kaikou]

If anyone is interested, dave is selling all his stuff for low prices, including mp3 or audiobooks.  Free shipping can be had through the shipping code FREESHIPAUG through Aug 31st.


NOTE: Use your local library first, don't waste any money you don't have to.

[nereo]

If anyone is interested, dave is selling all his stuff for low prices, including mp3 or audiobooks.  Free shipping can be had through the shipping code FREESHIPAUG through Aug 31st.


NOTE: Use your local library first, don't waste any money you don't have to.

Interesting plug for a thread titled "Dave Ramsey advice that pisses me off!"

[Sofa King]

Dave Ramsey is great and has helped so many people change their lives for the better!!!  :  )

[Bob W]

Anyone use Dave's Every Dollar free on line budget tool?   

[EricP]

Anyone use Dave's Every Dollar free on line budget tool?

Not I.  I'm not paying $100 a year just to get what Mint already gives me for free and I'm not going to input stuff manually.

[Kaikou]

I figured people who want it would read it. there are ways to get everydollar for free. I think I have a free 6 month code somewhere for the full service.

[Josiecat]

I love Dave.  So many people need a swift kick in the arse, and he gives it to them.  Some people respond well to his type of message.
 
If you don't like Dave, then feel free to ignore him. 

[Syonyk]

Yeah, I really don't get the hate... he provides a much more consumer-friendly kick in the ass, which is a bit more feasible for a lot of people, and he serves as a great catalyst to get couples actually talking about money.

His investment advice may be fishy, and I don't agree with his "DEBIT CARDS ONLY" thing (mostly because I seem to have to replace about one credit card a year from fraud), but arguing about that is missing the forest for the trees.

[nereo]

Yeah, I really don't get the hate... he provides a much more consumer-friendly kick in the ass, which is a bit more feasible for a lot of people, and he serves as a great catalyst to get couples actually talking about money.

His investment advice may be fishy, and I don't agree with his "DEBIT CARDS ONLY" thing (mostly because I seem to have to replace about one credit card a year from fraud), but arguing about that is missing the forest for the trees.

ok - did you actually read the replies on this thread and in the numerous parallel threads on DR?  I think people have been pretty clear on the various reasons why he's unpopular with many people on this forum.  You'll also notice that quit a few people acknowledge that he serves a useful purpose getting people in serious financial trouble out of debt.  But the reasons why many here don't care for him are long: promoting high-cost mutual funds (with kickbacks?), pushing people to pay off sub-3% loans, constant comments of 'good evangelical christian', the 'you'll earn 12% annual returns', fuzzy math, etc. etc.  He's good for people who are very bad at handling their finances, but not the inverse.

[fb132]

Yeah, I really don't get the hate... he provides a much more consumer-friendly kick in the ass, which is a bit more feasible for a lot of people, and he serves as a great catalyst to get couples actually talking about money.

His investment advice may be fishy, and I don't agree with his "DEBIT CARDS ONLY" thing (mostly because I seem to have to replace about one credit card a year from fraud), but arguing about that is missing the forest for the trees.

ok - did you actually read the replies on this thread and in the numerous parallel threads on DR?  I think people have been pretty clear on the various reasons why he's unpopular with many people on this forum.  You'll also notice that quit a few people acknowledge that he serves a useful purpose getting people in serious financial trouble out of debt.  But the reasons why many here don't care for him are long: promoting high-cost mutual funds (with kickbacks?), pushing people to pay off sub-3% loans, constant comments of 'good evangelical christian', the 'you'll earn 12% annual returns', fuzzy math, etc. etc.  He's good for people who are very bad at handling their finances, but not the inverse.

His buisness is to help people who are poor at handling finances or else he would of never had started this if he thought he could help out those who are good with handling money. I mean his whole selling point is the baby steps. I think that is what attracts mainly those who are shitty with money.

[justajane]

Yeah, I really don't get the hate... he provides a much more consumer-friendly kick in the ass, which is a bit more feasible for a lot of people, and he serves as a great catalyst to get couples actually talking about money.

His investment advice may be fishy, and I don't agree with his "DEBIT CARDS ONLY" thing (mostly because I seem to have to replace about one credit card a year from fraud), but arguing about that is missing the forest for the trees.

ok - did you actually read the replies on this thread and in the numerous parallel threads on DR?  I think people have been pretty clear on the various reasons why he's unpopular with many people on this forum.  You'll also notice that quit a few people acknowledge that he serves a useful purpose getting people in serious financial trouble out of debt.  But the reasons why many here don't care for him are long: promoting high-cost mutual funds (with kickbacks?), pushing people to pay off sub-3% loans, constant comments of 'good evangelical christian', the 'you'll earn 12% annual returns', fuzzy math, etc. etc.  He's good for people who are very bad at handling their finances, but not the inverse.

His buisness is to help people who are poor at handling finances or else he would of never had started this if he thought he could help out those who are good with handling money. I mean his whole selling point is the baby steps. I think that is what attracts mainly those who are shitty with money.

But I think the problem is that people get stuck with his mindset for their lives and don't realize that after they have learned to be good with money that doing things differently isn't sacrilege or stupid. Look at how many people on here still adhere to the idea of prepaying their mortgage, even though it is 3%. You can argue with them until you are blue in the face, but they will still choose the emotion over the math. I think Dave Ramsey largely popularized that notion ("paid off mortgage as the new status symbol" or whatever it is), and it has stuck. I would also still be doing those things if I hadn't investigated further and found ways to leverage debt to accumulate wealth.

[EricP]

Yeah, I really don't get the hate... he provides a much more consumer-friendly kick in the ass, which is a bit more feasible for a lot of people, and he serves as a great catalyst to get couples actually talking about money.

His investment advice may be fishy, and I don't agree with his "DEBIT CARDS ONLY" thing (mostly because I seem to have to replace about one credit card a year from fraud), but arguing about that is missing the forest for the trees.

ok - did you actually read the replies on this thread and in the numerous parallel threads on DR?  I think people have been pretty clear on the various reasons why he's unpopular with many people on this forum.  You'll also notice that quit a few people acknowledge that he serves a useful purpose getting people in serious financial trouble out of debt.  But the reasons why many here don't care for him are long: promoting high-cost mutual funds (with kickbacks?), pushing people to pay off sub-3% loans, constant comments of 'good evangelical christian', the 'you'll earn 12% annual returns', fuzzy math, etc. etc.  He's good for people who are very bad at handling their finances, but not the inverse.

His buisness is to help people who are poor at handling finances or else he would of never had started this if he thought he could help out those who are good with handling money. I mean his whole selling point is the baby steps. I think that is what attracts mainly those who are shitty with money.

Well could he help poor people without fleecing them with awful mutual funds once they finally have some money?  Or maybe not advise 8%+ Withdrawal Rates for elderly people?  Or give an actual annualized rate of return instead of a meaningless average rate of return when quoting the S&P 500's performance since inception?  Or not tell people to hold off on retirement contributions for multiple years while completing Baby Steps 1, 2, 3, and 3B?  For some of these people it's damn near 10 years that they are missing out on free money from their 401(k)s while they get out of debt, build a 6 month emergency fund and a down payment for a house.

His advice is decent enough, but when he's telling people that "risk" is the reason why they should pay off all debt before investing in ALL circumstances then he's being intellectually dishonest.  Your heart doesn't measure risk, Dave, it pumps blood throughout your body. These people are not over-leveraging themselves like you did, Dave, they are just realizing that 12 is bigger than 3.5.

He could help out financially stupid people without the shitty advice.  Don't have a car payment because then you're forced into full coverage and you're much more likely to buy something you can't afford.  That's good advice, right?  Avoid consumer debt because you're not using it to build wealth, you're just tricking yourself into thinking that.  Preach the 4% SWR.  Stop being so flippin political all the time.  Dave could stop having sucky advice and still be the same "No debt" guy that is a great motivator.

[nereo]

Yeah, I really don't get the hate... he provides a much more consumer-friendly kick in the ass, which is a bit more feasible for a lot of people, and he serves as a great catalyst to get couples actually talking about money.

His investment advice may be fishy, and I don't agree with his "DEBIT CARDS ONLY" thing (mostly because I seem to have to replace about one credit card a year from fraud), but arguing about that is missing the forest for the trees.

ok - did you actually read the replies on this thread and in the numerous parallel threads on DR?  I think people have been pretty clear on the various reasons why he's unpopular with many people on this forum.  You'll also notice that quit a few people acknowledge that he serves a useful purpose getting people in serious financial trouble out of debt.  But the reasons why many here don't care for him are long: promoting high-cost mutual funds (with kickbacks?), pushing people to pay off sub-3% loans, constant comments of 'good evangelical christian', the 'you'll earn 12% annual returns', fuzzy math, etc. etc.  He's good for people who are very bad at handling their finances, but not the inverse.

His buisness is to help people who are poor at handling finances or else he would of never had started this if he thought he could help out those who are good with handling money. I mean his whole selling point is the baby steps. I think that is what attracts mainly those who are shitty with money.

Well could he help poor people without fleecing them with awful mutual funds once they finally have some money?  Or maybe not advise 8%+ Withdrawal Rates for elderly people?  Or give an actual annualized rate of return instead of a meaningless average rate of return when quoting the S&P 500's performance since inception?  Or not tell people to hold off on retirement contributions for multiple years while completing Baby Steps 1, 2, 3, and 3B?  For some of these people it's damn near 10 years that they are missing out on free money from their 401(k)s while they get out of debt, build a 6 month emergency fund and a down payment for a house.

His advice is decent enough, but when he's telling people that "risk" is the reason why they should pay off all debt before investing in ALL circumstances then he's being intellectually dishonest.  Your heart doesn't measure risk, Dave, it pumps blood throughout your body. These people are not over-leveraging themselves like you did, Dave, they are just realizing that 12 is bigger than 3.5.

He could help out financially stupid people without the shitty advice.  Don't have a car payment because then you're forced into full coverage and you're much more likely to buy something you can't afford.  That's good advice, right?  Avoid consumer debt because you're not using it to build wealth, you're just tricking yourself into thinking that.  Preach the 4% SWR.  Stop being so flippin political all the time.  Dave could stop having sucky advice and still be the same "No debt" guy that is a great motivator.

Well said EricP.

[fb132]

Yeah, I really don't get the hate... he provides a much more consumer-friendly kick in the ass, which is a bit more feasible for a lot of people, and he serves as a great catalyst to get couples actually talking about money.

His investment advice may be fishy, and I don't agree with his "DEBIT CARDS ONLY" thing (mostly because I seem to have to replace about one credit card a year from fraud), but arguing about that is missing the forest for the trees.

ok - did you actually read the replies on this thread and in the numerous parallel threads on DR?  I think people have been pretty clear on the various reasons why he's unpopular with many people on this forum.  You'll also notice that quit a few people acknowledge that he serves a useful purpose getting people in serious financial trouble out of debt.  But the reasons why many here don't care for him are long: promoting high-cost mutual funds (with kickbacks?), pushing people to pay off sub-3% loans, constant comments of 'good evangelical christian', the 'you'll earn 12% annual returns', fuzzy math, etc. etc.  He's good for people who are very bad at handling their finances, but not the inverse.

His buisness is to help people who are poor at handling finances or else he would of never had started this if he thought he could help out those who are good with handling money. I mean his whole selling point is the baby steps. I think that is what attracts mainly those who are shitty with money.

Well could he help poor people without fleecing them with awful mutual funds once they finally have some money?  Or maybe not advise 8%+ Withdrawal Rates for elderly people?  Or give an actual annualized rate of return instead of a meaningless average rate of return when quoting the S&P 500's performance since inception?  Or not tell people to hold off on retirement contributions for multiple years while completing Baby Steps 1, 2, 3, and 3B?  For some of these people it's damn near 10 years that they are missing out on free money from their 401(k)s while they get out of debt, build a 6 month emergency fund and a down payment for a house.

His advice is decent enough, but when he's telling people that "risk" is the reason why they should pay off all debt before investing in ALL circumstances then he's being intellectually dishonest.  Your heart doesn't measure risk, Dave, it pumps blood throughout your body. These people are not over-leveraging themselves like you did, Dave, they are just realizing that 12 is bigger than 3.5.

He could help out financially stupid people without the shitty advice.  Don't have a car payment because then you're forced into full coverage and you're much more likely to buy something you can't afford.  That's good advice, right?  Avoid consumer debt because you're not using it to build wealth, you're just tricking yourself into thinking that.  Preach the 4% SWR.  Stop being so flippin political all the time.  Dave could stop having sucky advice and still be the same "No debt" guy that is a great motivator.

Look, I am not defending him, he is a buisnessman first and his goal is somewhat to help people go out of debt and also make money off of that. Like you, I don't agree with him, but he does have a huge viewership so even though you don't like his religious crap and total republican stance, he does strike a chord to alot of people (mainly those types of people). What I don't understand is why is there no one competing against him on the radio and using the FIRE way to live your life? Usually in buisness there are always competitors, but in the financial media world, Dave Ramsey is on top with no one to really challenge him therefore people are more proned to listen to Dave's advices since there are not many who have their own radio/tv show.

[Chris22]

Yeah, I really don't get the hate... he provides a much more consumer-friendly kick in the ass, which is a bit more feasible for a lot of people, and he serves as a great catalyst to get couples actually talking about money.

His investment advice may be fishy, and I don't agree with his "DEBIT CARDS ONLY" thing (mostly because I seem to have to replace about one credit card a year from fraud), but arguing about that is missing the forest for the trees.

ok - did you actually read the replies on this thread and in the numerous parallel threads on DR?  I think people have been pretty clear on the various reasons why he's unpopular with many people on this forum.  You'll also notice that quit a few people acknowledge that he serves a useful purpose getting people in serious financial trouble out of debt.  But the reasons why many here don't care for him are long: promoting high-cost mutual funds (with kickbacks?), pushing people to pay off sub-3% loans, constant comments of 'good evangelical christian', the 'you'll earn 12% annual returns', fuzzy math, etc. etc.  He's good for people who are very bad at handling their finances, but not the inverse.

His buisness is to help people who are poor at handling finances or else he would of never had started this if he thought he could help out those who are good with handling money. I mean his whole selling point is the baby steps. I think that is what attracts mainly those who are shitty with money.

Well could he help poor people without fleecing them with awful mutual funds once they finally have some money?  Or maybe not advise 8%+ Withdrawal Rates for elderly people?  Or give an actual annualized rate of return instead of a meaningless average rate of return when quoting the S&P 500's performance since inception?  Or not tell people to hold off on retirement contributions for multiple years while completing Baby Steps 1, 2, 3, and 3B?  For some of these people it's damn near 10 years that they are missing out on free money from their 401(k)s while they get out of debt, build a 6 month emergency fund and a down payment for a house.

His advice is decent enough, but when he's telling people that "risk" is the reason why they should pay off all debt before investing in ALL circumstances then he's being intellectually dishonest.  Your heart doesn't measure risk, Dave, it pumps blood throughout your body. These people are not over-leveraging themselves like you did, Dave, they are just realizing that 12 is bigger than 3.5.

He could help out financially stupid people without the shitty advice.  Don't have a car payment because then you're forced into full coverage and you're much more likely to buy something you can't afford.  That's good advice, right?  Avoid consumer debt because you're not using it to build wealth, you're just tricking yourself into thinking that.  Preach the 4% SWR.  Stop being so flippin political all the time.  Dave could stop having sucky advice and still be the same "No debt" guy that is a great motivator.

Look, I am not defending him, he is a buisnessman first and his goal is somewhat to help people go out of debt and also make money off of that. Like you, I don't agree with him, but he does have a huge viewership so even though you don't like his religious crap and total republican stance, he does strike a chord to alot of people (mainly those types of people). What I don't understand is why is there no one competing against him on the radio and using the FIRE way to live your life? Usually in buisness there are always competitors, but in the financial media world, Dave Ramsey is on top with no one to really challenge him therefore people are more proned to listen to Dave's advices since there are not many who have their own radio/tv show.

Because, as I said early, common sense doesn't sell.  How do you monetize "pay off debt with an interest rate higher than your RoR and not debt lower than your RoR"?  You have to take an extremist view to get people's attention.  Hell, even MMM does this with his "complainypants" and "facepunch" and other bullshit surrounding generally good ideas.

[sky_northern]

Look, I am not defending him, he is a buisnessman first and his goal is somewhat to help people go out of debt and also make money off of that. Like you, I don't agree with him, but he does have a huge viewership so even though you don't like his religious crap and total republican stance, he does strike a chord to alot of people (mainly those types of people). What I don't understand is why is there no one competing against him on the radio and using the FIRE way to live your life? Usually in buisness there are always competitors, but in the financial media world, Dave Ramsey is on top with no one to really challenge him therefore people are more proned to listen to Dave's advices since there are not many who have their own radio/tv show.

In Canada we have Gail, but she has a completely different business model. I don't think she is out to make big bucks. She has some books, TV shows and a blog. She doesn't give much for investment advice more budgeting and "Don't spend more money than you make, you idiot" kind of advice.

[nereo]

Look, I am not defending him, he is a buisnessman first and his goal is somewhat to help people go out of debt and also make money off of that. Like you, I don't agree with him, but he does have a huge viewership so even though you don't like his religious crap and total republican stance, he does strike a chord to alot of people (mainly those types of people). What I don't understand is why is there no one competing against him on the radio and using the FIRE way to live your life? Usually in buisness there are always competitors, but in the financial media world, Dave Ramsey is on top with no one to really challenge him therefore people are more proned to listen to Dave's advices since there are not many who have their own radio/tv show.

No one to challenge him?  Admittedly DR is the "big fish" when it comes to a nationally syndicated financial radio show, but he's far from being the mass-media source available.  On radio there's the Motly Fool Radio Show, Money Girl, Clark Howard's show, Rich Dad (which I think is far worse than DR's show), So Money (Mrs MMM did an episode there) and lots of others. Marketplace Money (NRP) spends more time on personal finance than it's daily sibling, 'Marketplace'.  Then there's forums like this one and bogelheads, glossy-print magazines covering every flavor of economics from Forbes to Homesteading.  At my local library there's probably 500 'self-help' style books strictly dealing with finances.

DR's not alone in the space. 

[Syonyk]

Because, as I said early, common sense doesn't sell.  How do you monetize "pay off debt with an interest rate higher than your RoR and not debt lower than your RoR"?  You have to take an extremist view to get people's attention.  Hell, even MMM does this with his "complainypants" and "facepunch" and other bullshit surrounding generally good ideas.

If "Spend less than you make" and "don't stay in debt, and if you are, pay off the high interest stuff first" worked, Dave Ramsey wouldn't be needed.

Even though it's "sub-optimal," his debt snowball is popular because it works.  It works for people who have tried and repeatedly failed to pay off debt using the logical method, because it's tapping into something different.  The "Debt free!" calls are regular motivators for other people as well.

If you have your finances in order, Dave Ramesy is mostly useless, and can safely be ignored.  But the reality is, he's helping a lot of people get out of debt.  And his methods work where "common sense" hasn't.  So, from that perspective, he's worth a good bit.

And regarding mortgage payoff/etc, there are other things to consider than just "on paper wealth."  I fully intend to pay off my mortgage early (when we eventually have one), because that's something concrete, even if the economy tanks.  I'd rather not have to suck out money from investments during a downturn just to pay my mortgage, and paying off a mortgage has much higher yields than a savings account (best I've seen is about 0.95%).  *shrug*  I'm aware it's not "optimal," and I intend to do it anyway, because I'd rather own my house/car/etc outright than possibly make a bit extra on investments.

... and I'm pessimistic about our post-peak-energy future, so I sit firmly in the "Past performance does not guarantee future results" camp about the stock market.

[Chris22]

Because, as I said early, common sense doesn't sell.  How do you monetize "pay off debt with an interest rate higher than your RoR and not debt lower than your RoR"?  You have to take an extremist view to get people's attention.  Hell, even MMM does this with his "complainypants" and "facepunch" and other bullshit surrounding generally good ideas.

If "Spend less than you make" and "don't stay in debt, and if you are, pay off the high interest stuff first" worked, Dave Ramsey wouldn't be needed.

Even though it's "sub-optimal," his debt snowball is popular because it works.  It works for people who have tried and repeatedly failed to pay off debt using the logical method, because it's tapping into something different.  The "Debt free!" calls are regular motivators for other people as well.

If you have your finances in order, Dave Ramesy is mostly useless, and can safely be ignored.  But the reality is, he's helping a lot of people get out of debt.  And his methods work where "common sense" hasn't.  So, from that perspective, he's worth a good bit.

And regarding mortgage payoff/etc, there are other things to consider than just "on paper wealth."  I fully intend to pay off my mortgage early (when we eventually have one), because that's something concrete, even if the economy tanks.  I'd rather not have to suck out money from investments during a downturn just to pay my mortgage, and paying off a mortgage has much higher yields than a savings account (best I've seen is about 0.95%).  *shrug*  I'm aware it's not "optimal," and I intend to do it anyway, because I'd rather own my house/car/etc outright than possibly make a bit extra on investments.

To make an accurate comparison, I'd want to weigh "OMG pay off all debt" against someone who took a more reasoned approach balanced against investing (401k and other).  I don't think the "OMG pay off all debt" folks are necessarily going to come out ahead.

... and I'm pessimistic about our post-peak-energy future,

As someone spending his days frantically running scenarios to understand the effect of ever-plumeting oil and nat gas prices on his business, I'm curious when this peak energy thing is going to happen. 

[Josiecat]

To moustachians 'spend less than you make... duh' is true.  The is NOT true for a lot of other people out there.  Those other people need an ass kicking of epic proportions.  DR gives them the push the need to do the baby steps.

[Syonyk]

As someone spending his days frantically running scenarios to understand the effect of ever-plumeting oil and nat gas prices on his business, I'm curious when this peak energy thing is going to happen.

An awful lot of the low prices are demand destruction - only part of it is production increases.

I'd argue it is happening, but the "prices will skyrocket" assertion doesn't come from a solid understanding of economics and demand destruction - which is happening on more than just energy right now.  See "Most commodities."

[Milizard]

If it were just the financial trainwrecks going to DR for advice, I'd encourage them.  However, when people that don't spend everything they have and more, who are more than intelligent enough to understand the basics of investing bring him up, I cringe.  If they follow his advice, they could do themselves a huge disservice. 

[EricP]

If it were just the financial trainwrecks going to DR for advice, I'd encourage them.  However, when people that don't spend everything they have and more, who are more than intelligent enough to understand the basics of investing bring him up, I cringe.  If they follow his advice, they could do themselves a huge disservice.

I've heard more than few people with several hundred thousand in TSP accounts go to him and he'll recommend they take it out because there's "not enough choices" and "you can beat the market with one of my ELP's."  And then there's some crooked ELP on the other hand who just got handed $5k/yr for the rest of his life because he's got the "heart of a teacher."

[nereo]

As someone spending his days frantically running scenarios to understand the effect of ever-plumeting oil and nat gas prices on his business, I'm curious when this peak energy thing is going to happen.

An awful lot of the low prices are demand destruction - only part of it is production increases.

I'd argue it is happening, but the "prices will skyrocket" assertion doesn't come from a solid understanding of economics and demand destruction - which is happening on more than just energy right now.  See "Most commodities."

Can't help but notice you seem to be dodging Chris22's question about when peak energy will happen.  In your statement above you say we've had production increases, but then assert that we've already hit peak energy.  Production increases don't seem to support a post peak-energy world. 
I'm also not certain where I am supposed to go when you say See "Most commodities" - can you be more specific?

[Chris22]

As someone spending his days frantically running scenarios to understand the effect of ever-plumeting oil and nat gas prices on his business, I'm curious when this peak energy thing is going to happen.

An awful lot of the low prices are demand destruction - only part of it is production increases.

I'd argue it is happening, but the "prices will skyrocket" assertion doesn't come from a solid understanding of economics and demand destruction - which is happening on more than just energy right now.  See "Most commodities."

The reason there isn't more production increase is because a huge portion of known reserves cost more to retrieve than they can sell for on the current market.  bring back $100 oil and you'd see a big spike in production.

[Syonyk]

Peak energy?  I don't have a great answer.  We've got an awful lot of coal.  So at some point in the future.

Peak oil?  About 2005.  Though we're still staggering along the top of the production curves, driven by the boom in fracking.

Copper: http://www.nasdaq.com/markets/copper.aspx?timeframe=3y

Silver: http://www.nasdaq.com/markets/silver.aspx?timeframe=3y

Lead and coal prices are doing similar things.

*shrug*  Maybe I'm wrong.  Feel free to entirely ignore me.  And this is pretty far off topic for this thread anyway.

[nereo]

Peak energy?  I don't have a great answer.  We've got an awful lot of coal.  So at some point in the future.

Peak oil?  About 2005.  Though we're still staggering along the top of the production curves, driven by the boom in fracking.

Copper: http://www.nasdaq.com/markets/copper.aspx?timeframe=3y

Silver: http://www.nasdaq.com/markets/silver.aspx?timeframe=3y

How can we have passed peak oil ten years ago if production has continued to increase?  Those two statements directly contradict each other.  Either we peaked or we didn't.

Also - I cannot understand how a decrease in the futures of copper or silver would indicate a peak in those metals.  I'm not saying it hasn't happened, just that the data you are using doesn't seem to address the question.

*shrug*  Maybe I'm wrong.  Feel free to entirely ignore me.  And this is pretty far off topic for this thread anyway.

agreed - so... why bring up "peak energy" in a thread about DR advice?

[Syonyk]

How can we have passed peak oil ten years ago if production has continued to increase?  Those two statements directly contradict each other.  Either we peaked or we didn't.

Peak conventional oil happened 10 years ago.  We've proceeded to get really creative with debt backed fracking companies, but the year over year declines on those wells are 30-40%, so... not a long term solution.

Also - I cannot understand how a decrease in the futures of copper or silver would indicate a peak in those metals.  I'm not saying it hasn't happened, just that the data you are using doesn't seem to address the question.

It doesn't mean those metals are peaking, but it's a good clue that demand destruction is happening, which also effects energy.

agreed - so... why bring up "peak energy" in a thread about DR advice?

Because it's part of why I intend to pay off my mortgage instead of keeping "low interest debt."  I don't expect the continuing stock market gains to continue over, say, 30 years, so I'd rather pay it off quickly so I don't have to worry about losing my house.

[Chris22]

How can we have passed peak oil ten years ago if production has continued to increase?  Those two statements directly contradict each other.  Either we peaked or we didn't.

Peak conventional oil happened 10 years ago.  We've proceeded to get really creative with debt backed fracking companies, but the year over year declines on those wells are 30-40%, so... not a long term solution.

Huh?  Oil is oil.  Yes, some is harder to get, but if production is increasing, it doesn't matter (except in terms of price) that it's easier or harder to get out of the ground.

[Syonyk]

It does, if the amount of energy involved in the extraction is significantly greater than what has historically been the case.  Some of the fracked wells only return a 2-3x return on energy invested.

Anyway, I'm planning for another 60-70 years of life on this planet if all goes well, so trying to figure out how to navigate the likely future is interesting.  I think these things will certainly matter in my expected lifespan.  So, planning for them makes sense.  It's not as useful if you're trying to figure out 6 months or a year from now.

[nereo]

To use a science phrases: "Your data does not match your conclusions".

It does, if the amount of energy involved in the extraction is significantly greater than what has historically been the case.  Some of the fracked wells only return a 2-3x return on energy invested.

Oil was more costly to extract in the 1960s than the 1940s.  It was more expensive to extract in the 80s than the 60s, etc etc.  Every decade has seen the cost of extraction rise slightly.  What you are arguing is increased production cost, not peak oil.
Also, you seem to be confusing "peak energy" with "peak oil" - they aren't the same thing.  Take a look at the global capacity of solar and wind over the last decade.  Then there's always coal and natural gas.

Anyway, I'm planning for another 60-70 years of life on this planet if all goes well, so trying to figure out how to navigate the likely future is interesting.  I think these things will certainly matter in my expected lifespan.  So, planning for them makes sense. 

Agreed that planning for multi-decade timelines makes sense, and the future is bound to be interesting.  Your argument, if true, also torpedos DR's expected 12% returns.

Because it's part of why I intend to pay off my mortgage instead of keeping "low interest debt."  I don't expect the continuing stock market gains to continue over, say, 30 years, so I'd rather pay it off quickly so I don't have to worry about losing my house.

I'm always skeptical when someone says stock market gains aren't likely to continue.  It's a variant of "it's different this time" and even financially educated smart people have been making the same prediction every decade over hte last century.
Regardless, if a mortgage at/around historical inflationary rates beats the market over 30 years than we have much bigger problems.  Owning your house isn't a promise that you won't loose that ohuse if you don't have significant assets leftover to pay for the upkeep, taxes, and to fund your own lifestyle. 

[zephyr911]

It does, if the amount of energy involved in the extraction is significantly greater than what has historically been the case.  Some of the fracked wells only return a 2-3x return on energy invested.

Anyway, I'm planning for another 60-70 years of life on this planet if all goes well, so trying to figure out how to navigate the likely future is interesting.  I think these things will certainly matter in my expected lifespan.  So, planning for them makes sense.  It's not as useful if you're trying to figure out 6 months or a year from now.

As long a we're off on tangents: how far below 1x EROI do you think the oil industry will go before demand is eliminated entirely? My money is on coal-powered oil rigs and maybe even EVs hauling gas to stations, sucking up the last of the shale oil to run gas vehicles for just a little longer. I hope I live long enough to see just how batshit it gets.

[Syonyk]

As long a we're off on tangents: how far below 1x EROI do you think the oil industry will go before demand is eliminated entirely? My money is on coal-powered oil rigs and maybe even EVs hauling gas to stations, sucking up the last of the shale oil to run gas vehicles for just a little longer. I hope I live long enough to see just how batshit it gets.

Probably a good bit below 1x, but at that point, it won't be going to run gas vehicles - it will be used as a chemical feedstock for processes in which paying the energy cost to get it is easier than the alternative.  You can create synthetic gasoline from a variety of processes a whole lot easier than bothering to dig out the oil for it.

https://en.wikipedia.org/wiki/Fischer%E2%80%93Tropsch_process

Though it's probably easier to just switch to diesel-type engines that will burn "damned near anything" at that point.  I mean, you can run them just fine on crushed coal and water...

[HPstache]

I think Dave Ramsey's message of the importance of getting out of debt is the single most important message to Americans right now who are in debt up to their eyeballs and buying things they can't afford.  I do have a problem with his investment strategies, I will say that.  But his message is to have savings available, get out of debt, invest in your retirement, invest in your children, live within your means and don't buy what you can't afford.  I really don't see how that's a problem...

[FLA]

A man called in wanting to know if he should take a reverse mortgage.  Dave asked him a few questions:

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

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

I found myself yelling at the radio.

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

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

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

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

this is amongst the stupidest things I have ever heard:

He suggested he take out a conventional mortgage

I hope the old guy did not take any of those suggestions

[Sid Hoffman]

I think Dave Ramsey's message of the importance of getting out of debt is the single most important message to Americans right now who are in debt up to their eyeballs and buying things they can't afford.  I do have a problem with his investment strategies, I will say that.  But his message is to have savings available, get out of debt, invest in your retirement, invest in your children, live within your means and don't buy what you can't afford.  I really don't see how that's a problem...

This is a forum of MMM readers.  Let's compare it to fitness:

Dave Ramsey = Weight Watchers

In this comparison, MMM is basically a forum for financial Ironman athletes.  Only a teeny, tiny group of people really do things like saving 75% of their income, yet that is common on this forum.  Similarly, only a teeny, tiny group of people complete Ironman events, but on an Ironman forum, it's very common.

So basically Dave Ramsey's system is like the Weight Watchers of financial health.  It's enough to get you the basics you need to be healthy and for somebody who's overweight in debt, that's exactly what they need.  Once you're out of debt? Well just like I don't go to Weight Watchers to train for a marathon, I wouldn't stop with DR books to plan for FIRE.  In the fitness world it's obvious that Weight Watchers isn't for athletes, and it should be similarly obvious that DR isn't for FIRE planning.

[clarkfan1979]

I used to get upset with his advice to others, but I stopped because I realized that I am not his target audience. His target audience is a group of people who are really bad with money and living above their means. They are almost like a 12 year old with money and he teaches them how to be an 18 year old with money.

He can be very persuasive with people who are very bad with money to be a little bit better. I'm not sure if I could be as impactful on people who are really bad at money. I would have a list of 150 things that they are doing wrong and they would probably get overwhelmed and not listen.

He keeps it simple and recommends things that are related to changes in human behavior. Sometimes the math is a little weird, but he can get people to make some changes for the better.

I am also a huge fan of "Rich Dad: Poor Dad." I read it when I was 20 years old and it was perfect for me at the time. 

[cerebus]

I think Dave Ramsey's message of the importance of getting out of debt is the single most important message to Americans right now who are in debt up to their eyeballs and buying things they can't afford.  I do have a problem with his investment strategies, I will say that.  But his message is to have savings available, get out of debt, invest in your retirement, invest in your children, live within your means and don't buy what you can't afford.  I really don't see how that's a problem...

This is a forum of MMM readers.  Let's compare it to fitness:

Dave Ramsey = Weight Watchers

In this comparison, MMM is basically a forum for financial Ironman athletes.  Only a teeny, tiny group of people really do things like saving 75% of their income, yet that is common on this forum.  Similarly, only a teeny, tiny group of people complete Ironman events, but on an Ironman forum, it's very common.

So basically Dave Ramsey's system is like the Weight Watchers of financial health.  It's enough to get you the basics you need to be healthy and for somebody who's overweight in debt, that's exactly what they need.  Once you're out of debt? Well just like I don't go to Weight Watchers to train for a marathon, I wouldn't stop with DR books to plan for FIRE.  In the fitness world it's obvious that Weight Watchers isn't for athletes, and it should be similarly obvious that DR isn't for FIRE planning.

Well kind of, yeah. But the flipside is the portion of his advice that is misleading, ill-advised and inappropriate for the situation of the person he's advising. And all that comes in the specifics of advice to individuals, where he exposes just how poorly equipped he is to act as any kind of financial adviser despite being in that position. He's the Dr Oz of finances.

[Drew664]

The one thing DR says that I'm not a huge fan of is the delay or stopping of your 401k even if there is an employer match.

Outside of that,  he's got great advice on money and life in general. I don't listen to him like a zombie,  nor MMM for that matter. I'll walk my own path, but will do it with an open mind!

[RangerOne]

Yeah IRA's, 401k's and Roth's are really special and most financial advice places maxing them out before all debt except high interest credit card debt. If there weren't contribution limits maybe this wouldn't be as huge a deal...

Telling people to pay off their debt as priority 1 and giving them false hope on returns while maybe not the best advice it could be a whole lot worse. If a person wants to get all their financial advice from one source they are in trouble anyway. Though people in Dave's position should take more precautions to look out for people who take him too seriously.