Author Topic: What is your opinion of Dave Ramsey?  (Read 18349 times)

wxdevil

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Re: What is your opinion of Dave Ramsey?
« Reply #100 on: March 18, 2018, 11:07:04 AM »
The advice he provides to his followers will surely put them on a much better financial path than they are currently on. However, it's far from the best path they could be on. In a relative sense, he's providing a good service to the masses. It's much better than the realistic alternative for debt slaves. For those who like to think more critically and deeply about finance, there are much better strategies to pursue for financial optimization.

Dang, I guess I'll stop listening to Dave, and now listen to random internet person with 5 posts. How many people have you helped with your excellent program?

What bug crawled up your butt?  The objectively accurate post you are quoting was not an attack on you or your admiration for Ramsey.

Do you have proof that the post is actually accurate?

Do you have proof that it's not?

lexde

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Re: What is your opinion of Dave Ramsey?
« Reply #101 on: March 18, 2018, 11:20:32 AM »
The advice he provides to his followers will surely put them on a much better financial path than they are currently on. However, it's far from the best path they could be on. In a relative sense, he's providing a good service to the masses. It's much better than the realistic alternative for debt slaves. For those who like to think more critically and deeply about finance, there are much better strategies to pursue for financial optimization.

Dang, I guess I'll stop listening to Dave, and now listen to random internet person with 5 posts. How many people have you helped with your excellent program?

What bug crawled up your butt?  The objectively accurate post you are quoting was not an attack on you or your admiration for Ramsey.

Do you have proof that the post is actually accurate?

Do you have proof that it's not?
See: Basic Math.

DR is awesome for people who are not financially literate or don’t want to put in the time to do research. It’s a good, easy to follow plan for people who don’t want to think about it too hard. But it’s not the best plan for everyone (or most people). But the most effective plan is the one that you stick to, and he’s good at getting people to stick to the plan he crafted. So an 80% improvement in finances that’s followed is better than a 90+% improvement that isn’t.

madgeylou

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Re: What is your opinion of Dave Ramsey?
« Reply #102 on: March 18, 2018, 11:31:12 AM »
"I am always looking for a DEAL.  A friend in the car business called m one day with a deal...on a Jaguar.  All those years and tears later - when driving a Jaguar was no longer the driving force behind my desire for a "high approval rating" - God sent a Jaguar back into my life" -Dave Ramsey

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

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

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

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

Exactly my take on him. He seems to have tacked hard into all this crap, which requires "Christians" to literally ignore everything Jesus ever said, over the last several years. I remember listening to him maybe 10 years ago and it wasn't nearly so bad then.

tomsang

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Re: What is your opinion of Dave Ramsey?
« Reply #103 on: March 18, 2018, 11:50:06 AM »
Dang, I guess I'll stop listening to Dave, and now listen to random internet person with 5 posts. How many people have you helped with your excellent program?

Now that I have 1,000 posts, I don't really trust someone with less than 1,000 posts even if what they are saying makes complete sense, and is not overly controversial.  :)

What did you find offensive about his post? 

nick663

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Re: What is your opinion of Dave Ramsey?
« Reply #104 on: March 18, 2018, 11:58:26 AM »
The advice he provides to his followers will surely put them on a much better financial path than they are currently on. However, it's far from the best path they could be on. In a relative sense, he's providing a good service to the masses. It's much better than the realistic alternative for debt slaves. For those who like to think more critically and deeply about finance, there are much better strategies to pursue for financial optimization.

Dang, I guess I'll stop listening to Dave, and now listen to random internet person with 5 posts. How many people have you helped with your excellent program?

What bug crawled up your butt?  The objectively accurate post you are quoting was not an attack on you or your admiration for Ramsey.

Do you have proof that the post is actually accurate?
I believe there was a lot of it in pages 1 and 2 of this thread...

wenchsenior

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Re: What is your opinion of Dave Ramsey?
« Reply #105 on: March 18, 2018, 12:30:02 PM »
So a bunch of people on the internet know more about finance than the guy that's helped millions? I'm super impressed. Where are the hundreds of testimonials about your brilliant systems? I can personally say, along with many others, that Dave's system works. I suppose most of you are still "in progress" with your own super deluxe system. Also, I wouldn't underestimate the financial knowledge of someone who has done Dave's system. Those same people may have a lot less debt, and a lot more in the bank than the internet gurus who claim to have a superior solution. Real world results matter, calculations and spreadsheets are just calculations and spreadsheets. I'm off to count my money; I would pay off some debt with it, but I forgot, I don't have any. I guess I'll just keep adding it to the stack for years and years. Enjoy.

Yes, many on this thread, including people you are attacking, have agreed with you that he has helped a lot of people.  And many on this board (not just you) have accumulated tons of assets...many of them by following strategies that are mathematically superior to Ramsey's. 

You are being unbelievably silly. If you have such contempt for people here and are sure they are all getting it so wrong, then why not go hang out on the Ramsey forums, where you never have to hear another negative opinion of the guru, or consider an alternative strategy for financial freedom?

C-note

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Re: What is your opinion of Dave Ramsey?
« Reply #106 on: March 18, 2018, 12:36:18 PM »
I like how he encourages people to get out of debt, buy a used car with cash, and live within their means.  Simple but effective.  A lot of Americans could benefit from his message.

Agree especially when it comes to American youth.  Personal finance just recently became a required high school graduation requirement in Colorado.  I believe that every high school student should be taught personal finance and the basics of investing before they graduate - especially the beauty of compound interest.  I also believe colleges and universities should  include a refresher someplace in the senior year.

I'm not a DR fan or current follower but I did learn how to budget from the DR book and method because I didn't learn from anyone else and I found him on the radio at a time in my life and marriage that I was stressing about monthly bills.  His method changed my way of thinking about personal finance and debt which led to us living on 40% of our income and investing/saving 60%.   DR's budgeting method played a key role in our current financial state which is quite solid.  His investment advice had no impact whatsoever because the smarter we got about money, we sought out smarter investment advice.
« Last Edit: March 18, 2018, 12:38:37 PM by C-note »

wenchsenior

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Re: What is your opinion of Dave Ramsey?
« Reply #107 on: March 18, 2018, 12:46:13 PM »
I like how he encourages people to get out of debt, buy a used car with cash, and live within their means.  Simple but effective.  A lot of Americans could benefit from his message.

Agree especially when it comes to American youth.  Personal finance just recently became a required high school graduation requirement in Colorado.  I believe that every high school student should be taught personal finance and the basics of investing before they graduate - especially the beauty of compound interest.  I also believe colleges and universities should  include a refresher someplace in the senior year.

I'm not a DR fan or current follower but I did learn how to budget from the DR book and method because I didn't learn from anyone else and I found him on the radio at a time in my life and marriage that I was stressing about monthly bills.  His method changed my way of thinking about personal finance and debt which led to us living on 40% of our income and investing/saving 60%.   DR's budgeting method played a key role in our current financial state which is quite solid.  His investment advice had no impact whatsoever because the smarter we got about money, we sought out smarter investment advice.

Yes, I have several times rec'd the debt snowball approach to friends and family dealing with multiple debts, who I thought were temperamentally unsuited to a mathematical approach because they wouldn't be motivated enough.  I also really like how simple the initial steps are, as well. 

Milizard

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Re: What is your opinion of Dave Ramsey?
« Reply #108 on: March 18, 2018, 12:51:35 PM »
I like how he encourages people to get out of debt, buy a used car with cash, and live within their means.  Simple but effective.  A lot of Americans could benefit from his message.

Agree especially when it comes to American youth.  Personal finance just recently became a required high school graduation requirement in Colorado.  I believe that every high school student should be taught personal finance and the basics of investing before they graduate - especially the beauty of compound interest.  I also believe colleges and universities should  include a refresher someplace in the senior year.

I'm not a DR fan or current follower but I did learn how to budget from the DR book and method because I didn't learn from anyone else and I found him on the radio at a time in my life and marriage that I was stressing about monthly bills.  His method changed my way of thinking about personal finance and debt which led to us living on 40% of our income and investing/saving 60%.   DR's budgeting method played a key role in our current financial state which is quite solid.  His investment advice had no impact whatsoever because the smarter we got about money, we sought out smarter investment advice.
I'm glad you found his information useful, but I'm not sure you should call it "his" budgeting method (unless, some special aspect of it was instrumental to you). The envelope system has been around for longer than he's been around (I'm thinking 1950's, but probably even before that). It's simply old school. 

Mezzie

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Re: What is your opinion of Dave Ramsey?
« Reply #109 on: March 18, 2018, 01:07:56 PM »
I read his book way back when and thought he stole the cash envelope thing from me (that's how I managed my money from childhood through college). I wasn't in debt, so I didn't really need much of his advice, but I like reading up on finncual choices (I'm here, after all!).

I do like his EveryDollar app. I gave it a test spin to see what budgeting app I would recommend to my students, and I've kept using it for my personal spending money so I can squeeze more money into some creative projects. It's been working well.

the_fixer

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Re: What is your opinion of Dave Ramsey?
« Reply #110 on: March 18, 2018, 05:09:51 PM »
The guy disserves credit, he has helped countless people deal with major debt and get them on a path to better financial stability.

His methods might be different than you, I or MMM would employ but you have to give him credit for understanding the psychology of the average American and how to get them to focus on paying off the debt.

Look at his methods they are designed to give you the little hit of success and get you excited. It is not about the best optimization of the perfect investment strategy it is about creating that positive experience and keeping it rolling.




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C-note

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Re: What is your opinion of Dave Ramsey?
« Reply #111 on: March 18, 2018, 05:34:37 PM »
I like how he encourages people to get out of debt, buy a used car with cash, and live within their means.  Simple but effective.  A lot of Americans could benefit from his message.

Agree especially when it comes to American youth.  Personal finance just recently became a required high school graduation requirement in Colorado.  I believe that every high school student should be taught personal finance and the basics of investing before they graduate - especially the beauty of compound interest.  I also believe colleges and universities should  include a refresher someplace in the senior year.

I'm not a DR fan or current follower but I did learn how to budget from the DR book and method because I didn't learn from anyone else and I found him on the radio at a time in my life and marriage that I was stressing about monthly bills.  His method changed my way of thinking about personal finance and debt which led to us living on 40% of our income and investing/saving 60%.   DR's budgeting method played a key role in our current financial state which is quite solid.  His investment advice had no impact whatsoever because the smarter we got about money, we sought out smarter investment advice.
I'm glad you found his information useful, but I'm not sure you should call it "his" budgeting method (unless, some special aspect of it was instrumental to you). The envelope system has been around for longer than he's been around (I'm thinking 1950's, but probably even before that). It's simply old school.

I completely agree that it's not DR's.  He simply packaged and marketed it well.

My parents used envelopes when I was growing up.  My mom cashed a check every Friday and divided the money into a set of envelopes (plain, white, Mead) marked for different purposes.  It's unfortunate that my parents didn't teach any of their 4 children about the envelope budgeting system.  I could have saved myself some heartache and 20 bucks.

kayvent

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Re: What is your opinion of Dave Ramsey?
« Reply #112 on: March 18, 2018, 06:17:19 PM »
.......
Maybe someone with financial "PTSD" as you describe it shouldn't give financial advice to others?  Especially if that experience is negatively influencing his/her advice? :)

And I disagree with the "if people understood math they wouldn't have debt" argument.  If someone is seeking out advice on how to get out of debt they clearly know they have an issue and are open to advice.  They shouldn't be treated like children and have better strategies hidden from them because someone thinks they can't handle it.

I see no data that shows his approach is more effective but that point keeps getting parroted.  Until there is hard data showing that we shouldn't be assuming that is true.

I tried searching on Google Scholar for any citations around this. Search phrases used included "debt snowball vs avalanche", "debt snowball vs debt avalanche", "debt snowball vs debt avalanche effectiveness", and others but nothing relevant came up. I then Google'd "efficacy debt snowball". Seeing that produced some relevant results. I returned to Google Scholar with the phrase "efficacy debt snowball vs debt avalanche" and found some material. I'd not consider this a thorough research into the available literature but I'd consider it a good starting point.

The Google result was a Forbes article titled: Debt Snowball Versus Debt Avalanche: What The Academic Research Shows

Key Quotes:

Quote

Kellogg School of Management: This 2012 study showed that people with large balances are more likely to stick with their debt payoff plan if they focus on smaller balances first.

David Gal, one of the professors who ran the study, said, ĎWe found that closing debt accounts--independent of the dollar balances of the closed accounts--predicted successful debt elimination at any point in the debt settlement program.Ē

Quote
Boston School of Business:
....
1. Participants who focused on one account at a time worked harder to pay down their debt.

...

In short, the research agrees with the first study that paying debts off one at a time, starting with the smallest account balance, is the way to go.

The article gives a (fairly realistic) example of the debt snowball and debt avalanche against 33,500$ of debt. Both have the same payoff term (52 months) and the avalanche saves $223. (Considering many of us on this forum would say a 34K debt should be clearable in two to three years with the median American salary instead of 4 1/3, this savings is even more paltry.)

The Google Scholar search revealed the same studies, except for this one: Small Victories: Creating Intrinsic Motivation in Savings and Debt Reduction. I read the paper up to Appendix A (30 pages). The two studies the paper focuses on studies the 'small victories' and goal gradients factors with an abstraction of task completion. (The task was writing cells in an Excel doc. They chose this experiment as it would remove participants' perceptions about debt. They were focused predominantly on the psychology of task completion.)

I would personally rate the paper of moderate quality. It does suggest the 'small victories' psychological boost increases task speed and ability to succeed. Again, I'd not take this paper as gospel but it with the others strengthens the case. The authors, when extending this to the financial (debt) sphere do prove that if the interest rates and sizes are highly skewed (ex. large high-interest debt with a large number of small, low interest debt), that the "small victories" benefit would be less than the additional cost of interest.

An interesting quote:

Quote
the subjects who benefit most from the ascending ordering are subjects with the highest self-control and reasoning ability. This last finding may suggest a flaw with the debt-snowball approach: the people who would benefit most from small victories may be the ones least likely to be in debt. Obviously, future research will need to look at the issue more carefully...



Going back to the Forbes article that I mentioned earlier, the fairly realistic example costs the individual .5% extra if they employ the debt snowball instead of the avalanche. Listening to Ramsey, this is a fairly standard debt composition for his converts. If the 'small victories' psychology of the debt snowball is pathetically small (ex. 1% increase in income and 2% increase in debt payments), we'd shave a month off the payment calendar and x00$(?). If it is 13%, we shave nine months off the payment calendar.
« Last Edit: March 18, 2018, 06:23:53 PM by kayvent »

Lan Mandragoran

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Re: What is your opinion of Dave Ramsey?
« Reply #113 on: March 18, 2018, 07:53:10 PM »
Itís not as complicated as everyone is making it. If you want maximal wealth pay off what gets off the best return on your money. If you want maximum simplicity, do Ramsey methods, no credit, no leverage, no waiting on your mortgage etc etc.  One is math based, one is emotional. Choose the best for you.

I wish my mom had just chosen the Ramsey methods, but thatís because sheís really bad at this and lacks the ability to stick with a plan.  Myself and many on this forum strive to do better than satisfy our preferences.

But hey if you want to pay off your 3% mortgage instead of invest in tax deferred accounts... have at it. Itís your monies;-P
« Last Edit: March 18, 2018, 07:55:41 PM by Lan Mandragoran »

J Boogie

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Re: What is your opinion of Dave Ramsey?
« Reply #114 on: March 19, 2018, 08:32:39 AM »
Iím not a Christian, so maybe Iím not understanding...but I donít think a big house makes you a worse Christian. It doesnít make him a Mustachian but I donít see a problem with his house from a religious standpoint. Iím sure itís all paid for in cash. It makes his actions consistent with his words- his motto is ďlive like no one elseĒ (aka scrimping and saving) ďso you can live like no one elseĒ (aka in a 13,000 sqft mansion). Thatís what heís doing. Frankly I think heís more honest than the televangelists I sometimes see on TV. At least he owns up to liking and wanting nice stuff. And he doesnít ask for people to send him donations or try to fleece them. He developed a program that helps people, and people pay him for his books, classes, and lectures. Seems fair and square to me.

I think he's straightforward in living up to his live like no one else motto. But that's not the motto of Christianity.

The problem isn't that he's insincere, it's that he is trying to shoehorn his personal financial philosophy into Christianity and giving many, many others the idea that it squares perfectly.

Christians are asked to be good stewards of what we've been given (natural resources) - meaning we should avoid wasteful consumerism, which is probably the biggest way that natural resources get unnecessarily used up. Ramsey seems to believe that we only need to avoid consumerism if we can't personally afford it, and seems to embrace it when it fits into the budget.

Step 7?

That's how he shoehorns it. He mentions charitable giving as a great way to spend money once you have financial peace.

And humans do measure your generosity in terms of how much you give. But Jesus didn't. Jesus judged based on what portion of your net worth you gave (refer to the tale of the widow's mite). And you can give a far greater portion of your net worth if you don't burn tons of cash every year living in luxury.

My opinion is that this isn't purely a Christian take, this is a solid universal moral framework for how to live a virtuous life - and I think Pete champions it far better.


Sorry, but this is wrong.  Dave teaches very specifically that you are to tithe on your increase (aka give 10% of what you make) to chruch / charity no matter what baby step you are on.  Baby Step 7 is for giving generously above and beyond your tithe.

You're right, but in a technical and irrelevant way. My point was not dependent on the timeline of your giving, but the percentage - specifically, the portion which you keep to yourself.

Dave Ramsey:
Before making a large purchase of any kind we ask God if that is what he wants us to do with HIS money. Like you I sometimes hear clearly and other times I am not sure. In the case of our home I was very sure.

I'd have more respect for Dave if he just said he wanted a mansion and so he built one. Plenty of millionaires and billionaires do this and also donate tons of money just like Dave.  I respect that they don't try to make their consumer desires fit some noble sounding narrative of their life.


Acastus

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Re: What is your opinion of Dave Ramsey?
« Reply #115 on: March 19, 2018, 11:14:25 AM »
He reminds me of Steve Martin in "Leap of Faith." He may even have a little of the real thing, just like Martin's character Jonas.

Awesomeness

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Re: What is your opinion of Dave Ramsey?
« Reply #116 on: March 19, 2018, 11:38:25 AM »
I was a fan years ago. Read his books and even attended a live event and was active on his forums,  which I believe are shut down now.  I was in good financial shape for a long time but life got really screwed up and Iím in dept big time. Iím not tackling it the Dave way though, some ways I am but  Iím juggling zero percent cards.  I donít budget and I put everything on my credit card. I donít like carrying cash.  But I am selling everything I can like he recommends, ďtil the kids and dogs think theyíre nextĒ. 

I like to feel Iíve moved up a notch by coming here. Back when I was on Dave forums but only hovered here, I actually recommended MMM to people.  You could tell when people were ready for a more complicated approach, for lack of a better term.

So I was quite knowledgeable and helped lots of people. . Here I have a lot to learn and kind of feel like Iím the cheapest house in a really nice neighborhood, which Iíve done a lot and thatís always good advice.  :)


But Dave is a good guy. He just gets repetitive if you listen enough, you could do his show for him after awhile.  Itís kind of funny, you can tell when heís in a mood, I just cringe when they talk and think ďoh crap. Theyíre gonna get itĒ.  I like when he calls out the BS. 

ReadySetMillionaire

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Re: What is your opinion of Dave Ramsey?
« Reply #117 on: March 19, 2018, 12:33:21 PM »
The one thing I'll add that people on here may dismiss is that people in financial distress often have a complete lack of long-term perspective.

It's pretty scientifically proven at this point that poorer people are *just trying to get through the day or week* rather than worry about how decisions may affect them ten years from now. It's a "scarcity mindset" that pervades everything they do--the focus on just getting by completely trumps self control and long-term planning, which leads to bad decisions.

Anecdotally, I've observed this to be pretty darn accurate.  The two paralegals at my current office are dirt poor to the point that they have asked me to buy gift cards from them that they received for Christmas.  But despite that, after payday, they are out to lunch eating McDonald's the following week.  They go to Dollar General across the street and buy some snacks.  And then money gets tight, they bring in homemade lunches, and that lasts until the next paycheck hits.

My older brother and his wife also used to be like this.  They ate too much fast food to describe. They had horrifically high car--and motorcycle--plural!!!--payments. They had an "eff it, we're poor, and we'll always be poor, so why not spend the money" mentality.

I tried for years and years to get them to stop the small things, but the best thing that ever happened to them (financially) was Dave Ramsey.  I feel like his teachings tap into the "scarcity mindset." My brother and his wife have gone from reckless and constantly asking my parents for money to self-sustaining, while adding a kid to the mix. They've paid off small medical debts and one of their repossessed vehicles.  They are slowly building up their credit to the point that they may be able to buy a house in a couple years, which was unfathomable just twelve months ago.


So while Ramsey's stuff isn't the mathematically best result, it appears to me that it taps into the mindset of people struggling.  It gives them short term wins that are in their grasp. And that leads to noticeable differences, which then leads to the next short term goal, all the way until they at least have control over their money rather than their debt controlling them.

Rosy

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Re: What is your opinion of Dave Ramsey?
« Reply #118 on: March 19, 2018, 03:07:53 PM »
I think he's great at motivating people who are emotional money people, like me. Dave Ramsey's podcasts were great to listen to and who doesn't love the debt-free screams - nice theatre.
Then, somewhere along the line, I graduated. The podcasts became annoying and repetitive, I started questioning the validity of what I was doing - is this really the best approach for me?

So, I'd say he succeeded - I paid off the debt snowball.
Even though I eventually graduated from that to the avalanche concept once I found a different money blog and realized it would save me money and time. But I must say that for me, the avalanche concept was terribly hard to accept, although, in the end, I began seeing that the math does not lie.
It seemed so counter-intuitive to not pay off a small debt and enjoy the feeling of victory.
Emotional money people like me need their happy dance:)
 
I even tried the envelope system - drove me totally insane. I don't understand how anyone can work with envelopes. It is so restrictive, minutely so.
Why can't I freely rob Peter to pay Paul, as long as in the end the budget balances?:)
If I have X, then that is all I have to spend, end of story. How I spend that after I paid my bills and saved a little can't possibly be pre-determined - life just doesn't work that way.
It felt like a silly Kindergarten exercise.

Why would I cut up my credit card? Put it in the freezer - well, maybe:) That alone drove me to look elsewhere for advice. How else does one reserve a hotel room or buy an airline ticket or operate in the world at large?
Do people really charge McDonald's on their credit card?
Then I realized that the EF of a $1000 was a bit too low for me ... by then I graduated away from Dave for good, He was helpful to me until I began to think for myself again.

My debt was not huge and I was nowhere near the level of desperation that I am sure some people had when they found him. I think, he is a good start and then you move on.
The Christianity spin - well, I grew up Catholic, so I have a high tolerance:) for guilt and being yelled at like he does. I even found myself in agreement once in a while.
I'm not convinced that his faith is genuine, but that is not for me to say or even dwell upon. Offering the seminars at churches across America is a simply brilliant business idea. There is no doubt in my mind that he has helped thousands, perhaps millions.

The full program itself is not perfect, but people - at some point we need to take back responsibility for our own finances and educate ourselves. Take away what works for you and get on with your life.

I don't care if he lives in a mansion or what car he drives, or that his wife likes expensive shoes and purses. They've been rich and they've been poor and had to start over again after a bankruptcy. Losing everything no matter how is a tough situation to overcome and come out on top again.
Dave has found his calling. I'm glad to know he tithes, and who knows maybe G will give him extra credit for motivating so many others to tithe as well.
The world will be better off for it:)

I do think we should all share our good fortune, but I object to tithing when one is not financially sound yet.

Pigeon

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Re: What is your opinion of Dave Ramsey?
« Reply #119 on: March 19, 2018, 04:12:59 PM »
Quote
I'm glad you found his information useful, but I'm not sure you should call it "his" budgeting method (unless, some special aspect of it was instrumental to you). The envelope system has been around for longer than he's been around (I'm thinking 1950's, but probably even before that). It's simply old school.

Yup.  When my parents (who were extremely frugal) got married in the early 1940s, my grandmother showed my mother the envelope system that she'd used for decades.  My mom tried it for two months and tore up the envelopes and said never again.  She didn't like the fussiness and all the cash, but she could save money like nobody's business.

Ramsey didn't invent this stuff.  He's just good at marketing it and himself.  But you can find the same basic information
in any number of personal finance books.  At the public library, of course.

His Jesusy stuff would turn me off completely if I needed budgeting advice.

v8rx7guy

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Re: What is your opinion of Dave Ramsey?
« Reply #120 on: March 19, 2018, 04:46:48 PM »
I understood his budgeting system, the thing that makes him fairly unique, to be the "zero based budget" system in which every dollar gets a name.  The cash envelope system that he often suggests is actually mostly just for people getting out of debt or learning to control their money by forcing you to not overspend.  He recommends debit card usage for the later baby steps.  In the Financial Peace University class he actually shows a cash envelope from the 1940's with an envelope labeled "Hawaii" as a pretty powerful example of how times have changed.  I don't think he has ever claimed to have invented the cash envelope system by any means, and he certainly doesn't say it's the only method.

Yes, I probably know more than I should about DR, but again... I teach the class.

kayvent

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Re: What is your opinion of Dave Ramsey?
« Reply #121 on: March 20, 2018, 02:37:07 AM »
Even though I eventually graduated from that to the avalanche concept once I found a different money blog and realized it would save me money and time. But I must say that for me, the avalanche concept was terribly hard to accept, although, in the end, I began seeing that the math does not lie.

Just curious about the math and your composition of debt at the time. I mentioned earlier that I've done the math of Ramseys' callers and the Forbes article quoted gave another example. In a somewhat typical use case, the snowball requires O(100$) more to be spent and one to six weeks extra versus the equivalent avalanche. Aberrations to that are trivial to conjure (ex. 39K debt at 3.2% with 40K debt at 28%) but I'm more so curious about a real world example.

Quote

I even tried the envelope system - drove me totally insane. I don't understand how anyone can work with envelopes. It is so restrictive, minutely so.
Why can't I freely rob Peter to pay Paul, as long as in the end the budget balances?:)
If I have X, then that is all I have to spend, end of story. How I spend that after I paid my bills and saved a little can't possibly be pre-determined - life just doesn't work that way.
It felt like a silly Kindergarten exercise.

This is what I like about the YNAB model. I have a stack of cash. I'm going to 'spend it' (ex on cloths, groceries, to other accounts) and there is a rough plan to. If I spend too much in one area, I just reallocate from another area.

channtheman

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Re: What is your opinion of Dave Ramsey?
« Reply #122 on: March 21, 2018, 12:02:31 PM »
One thing about the debt snowball vs avalanche I haven't seen mentioned yet (maybe I missed it) is that it starts to simplify one's life.  And with people who are drowning in debt, they fewer obligations they have, the sooner they can start to feel like the noose around their neck is loosening.  It also frees up monthly cash flow sooner allowing someone riddled in debt to be better equipped to cash flow an emergency rather than go right back in debt for it. 

RangerOne

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Re: What is your opinion of Dave Ramsey?
« Reply #123 on: March 21, 2018, 01:57:20 PM »
Only things he doesn't mess with are having children pretty much whenever you want, women quitting their jobs to become SAHMs while the family is in lots of debt, and MLM schemes ...any statement even lightly against those three things would upset a lot of his base.


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

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

That may be true that there could be some intrinsic value to staying at work if your long term career prospects are bettered by staying in the workforce. Even if one spouses pay is totally consumed by child care, which happens fairly easily.

But that is simply not true for everyone. Like anything else you have to weigh the pros and cons of having both spouses work. For some people you could easily end up with a spouse working simply so they can pay for someone else to watch your kids. And have no tangible long term gains for the sacrifice.

I think day cars naturally overplay their value in early education. They are just glorified day car. Which I would be happy to go in the hole for if it meant both my wife and I had stellar careers. But it would never change the fact that I would vastly prefer my wife our I to be at home for our young children.

There are simply limits on how much I would sacrifice to full fill that desire. At the same time this is a highly personal choice. Some people would simply go crazy having to work at home all day watching their young kids. For those people money gained may not be a huge or even the most important issue.

RangerOne

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Re: What is your opinion of Dave Ramsey?
« Reply #124 on: March 21, 2018, 02:16:40 PM »
"I am always looking for a DEAL.  A friend in the car business called m one day with a deal...on a Jaguar.  All those years and tears later - when driving a Jaguar was no longer the driving force behind my desire for a "high approval rating" - God sent a Jaguar back into my life" -Dave Ramsey

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

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

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

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

Exactly my take on him. He seems to have tacked hard into all this crap, which requires "Christians" to literally ignore everything Jesus ever said, over the last several years. I remember listening to him maybe 10 years ago and it wasn't nearly so bad then.

In general I try to keep an open mind with religion. I don't buy into any of it but I recognize that some of the values that get preached carry a fair amount of ancient human wisdom and can be philosophically good.

But as soon as someone mixes in wealth building with God my opinion of them plummets to rock bottom.

How detached and shitty a person do you have to be to celebrate the fact that you believe in a creator who has decided you have earned an I-Pad while some other poor bastard in a 3rd world country deserve to be born starving and then later jump off the building where your I-Pad was assembled....

If you want to believe in something like the teachings of Jesus then you best focus on what he preached. And that hinges around transcending petty human obsession with wealth and stuff and focusing on being good to all people.

If God loves everyone. And half the world is poverty stricken doomed to live a short life and die with nothing. Then God must not give a crap about what wealth good or bad people have. Otherwise all good people would be showered in wealth.

I suppose this is why in the Bible it mentions that it is exceeding hard for a wealthy person to be accepted into heaven. Clearly it must be because people become so enamored with their own good fortune that they pervert this into being symbolic for Gods love for them. While word after word in the Bible seems to go to great lengths that the only condition for receiving Gods love is loving him in return.

I guess I forgot the part of my brief exposure to Catholicism where God promised me a Telsa if I was patient, paid off my debt and believe in him.

Lance Burkhart

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Re: What is your opinion of Dave Ramsey?
« Reply #125 on: March 21, 2018, 02:38:10 PM »
I like how he encourages people to get out of debt, buy a used car with cash, and live within their means.  Simple but effective.  A lot of Americans could benefit from his message.

Agree especially when it comes to American youth.  Personal finance just recently became a required high school graduation requirement in Colorado.  I believe that every high school student should be taught personal finance and the basics of investing before they graduate - especially the beauty of compound interest.  I also believe colleges and universities should  include a refresher someplace in the senior year.

I'm not a DR fan or current follower but I did learn how to budget from the DR book and method because I didn't learn from anyone else and I found him on the radio at a time in my life and marriage that I was stressing about monthly bills.  His method changed my way of thinking about personal finance and debt which led to us living on 40% of our income and investing/saving 60%.   DR's budgeting method played a key role in our current financial state which is quite solid.  His investment advice had no impact whatsoever because the smarter we got about money, we sought out smarter investment advice.
I'm glad you found his information useful, but I'm not sure you should call it "his" budgeting method (unless, some special aspect of it was instrumental to you). The envelope system has been around for longer than he's been around (I'm thinking 1950's, but probably even before that). It's simply old school.

I completely agree that it's not DR's.  He simply packaged and marketed it well.

My parents used envelopes when I was growing up.  My mom cashed a check every Friday and divided the money into a set of envelopes (plain, white, Mead) marked for different purposes.  It's unfortunate that my parents didn't teach any of their 4 children about the envelope budgeting system.  I could have saved myself some heartache and 20 bucks.

To what extent is DR leveraging Larry Burkett, who preceded him? 

Dave gets an 'A' for financial advice targeted to your average American.  His audience must be considered.

His theology gets an F-.

Rosy

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Re: What is your opinion of Dave Ramsey?
« Reply #126 on: March 21, 2018, 02:51:24 PM »
Even though I eventually graduated from that to the avalanche concept once I found a different money blog and realized it would save me money and time. But I must say that for me, the avalanche concept was terribly hard to accept, although, in the end, I began seeing that the math does not lie.

Just curious about the math and your composition of debt at the time. I mentioned earlier that I've done the math of Ramseys' callers and the Forbes article quoted gave another example. In a somewhat typical use case, the snowball requires O(100$) more to be spent and one to six weeks extra versus the equivalent avalanche. Aberrations to that are trivial to conjure (ex. 39K debt at 3.2% with 40K debt at 28%) but I'm more so curious about a real world example.


For some unfathomable reason, I could not figure out for myself for the longest time if there was a mathematical advantage. All I remember from my time in hell is that it was around 5K total cc debt and very little income to speak of - not to mention I could not work. I had only $1200 or so total debt left by the time I heard about the avalanche ($300 on one card and the remainder on another).
I think I may have saved $30 to $50, but I don't really know, it was such a long time ago.

SK Joyous

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Re: What is your opinion of Dave Ramsey?
« Reply #127 on: March 21, 2018, 04:55:31 PM »
Only things he doesn't mess with are having children pretty much whenever you want, women quitting their jobs to become SAHMs while the family is in lots of debt, and MLM schemes ...any statement even lightly against those three things would upset a lot of his base.


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

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

That may be true that there could be some intrinsic value to staying at work if your long term career prospects are bettered by staying in the workforce. Even if one spouses pay is totally consumed by child care, which happens fairly easily.

But that is simply not true for everyone. Like anything else you have to weigh the pros and cons of having both spouses work. For some people you could easily end up with a spouse working simply so they can pay for someone else to watch your kids. And have no tangible long term gains for the sacrifice.

I think day cars naturally overplay their value in early education. They are just glorified day car. Which I would be happy to go in the hole for if it meant both my wife and I had stellar careers. But it would never change the fact that I would vastly prefer my wife our I to be at home for our young children.

There are simply limits on how much I would sacrifice to full fill that desire. At the same time this is a highly personal choice. Some people would simply go crazy having to work at home all day watching their young kids. For those people money gained may not be a huge or even the most important issue.

Who on earth pays $2500 a month for childcare?? A $40,000 income, take home of 75%, clears $2500 per month - wow, that would be crazy expensive childcare!

v8rx7guy

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Re: What is your opinion of Dave Ramsey?
« Reply #128 on: March 21, 2018, 05:13:16 PM »
Only things he doesn't mess with are having children pretty much whenever you want, women quitting their jobs to become SAHMs while the family is in lots of debt, and MLM schemes ...any statement even lightly against those three things would upset a lot of his base.


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

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

That may be true that there could be some intrinsic value to staying at work if your long term career prospects are bettered by staying in the workforce. Even if one spouses pay is totally consumed by child care, which happens fairly easily.

But that is simply not true for everyone. Like anything else you have to weigh the pros and cons of having both spouses work. For some people you could easily end up with a spouse working simply so they can pay for someone else to watch your kids. And have no tangible long term gains for the sacrifice.

I think day cars naturally overplay their value in early education. They are just glorified day car. Which I would be happy to go in the hole for if it meant both my wife and I had stellar careers. But it would never change the fact that I would vastly prefer my wife our I to be at home for our young children.

There are simply limits on how much I would sacrifice to full fill that desire. At the same time this is a highly personal choice. Some people would simply go crazy having to work at home all day watching their young kids. For those people money gained may not be a huge or even the most important issue.

Who on earth pays $2500 a month for childcare?? A $40,000 income, take home of 75%, clears $2500 per month - wow, that would be crazy expensive childcare!

There is much more to the equation than just the cost childcare.  Read "Your Money or Your Life".

MrUpwardlyMobile

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Re: What is your opinion of Dave Ramsey?
« Reply #129 on: March 22, 2018, 05:50:12 AM »
Only things he doesn't mess with are having children pretty much whenever you want, women quitting their jobs to become SAHMs while the family is in lots of debt, and MLM schemes ...any statement even lightly against those three things would upset a lot of his base.


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

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

That may be true that there could be some intrinsic value to staying at work if your long term career prospects are bettered by staying in the workforce. Even if one spouses pay is totally consumed by child care, which happens fairly easily.

But that is simply not true for everyone. Like anything else you have to weigh the pros and cons of having both spouses work. For some people you could easily end up with a spouse working simply so they can pay for someone else to watch your kids. And have no tangible long term gains for the sacrifice.

I think day cars naturally overplay their value in early education. They are just glorified day car. Which I would be happy to go in the hole for if it meant both my wife and I had stellar careers. But it would never change the fact that I would vastly prefer my wife our I to be at home for our young children.

There are simply limits on how much I would sacrifice to full fill that desire. At the same time this is a highly personal choice. Some people would simply go crazy having to work at home all day watching their young kids. For those people money gained may not be a huge or even the most important issue.

Who on earth pays $2500 a month for childcare?? A $40,000 income, take home of 75%, clears $2500 per month - wow, that would be crazy expensive childcare!

In my area, itís 1600-2200/month for infants and thatís not really adequate for a couple that is working full time.  I actually moved jobs to get closer to home and day care, my in laws moved walking distance and weíre still going to need day care.

In Manhattan, day care can run as high as $3500.

Milizard

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Re: What is your opinion of Dave Ramsey?
« Reply #130 on: March 22, 2018, 08:52:06 AM »
Only things he doesn't mess with are having children pretty much whenever you want, women quitting their jobs to become SAHMs while the family is in lots of debt, and MLM schemes ...any statement even lightly against those three things would upset a lot of his base.


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

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

That may be true that there could be some intrinsic value to staying at work if your long term career prospects are bettered by staying in the workforce. Even if one spouses pay is totally consumed by child care, which happens fairly easily.

But that is simply not true for everyone. Like anything else you have to weigh the pros and cons of having both spouses work. For some people you could easily end up with a spouse working simply so they can pay for someone else to watch your kids. And have no tangible long term gains for the sacrifice.

I think day cars naturally overplay their value in early education. They are just glorified day car. Which I would be happy to go in the hole for if it meant both my wife and I had stellar careers. But it would never change the fact that I would vastly prefer my wife our I to be at home for our young children.

There are simply limits on how much I would sacrifice to full fill that desire. At the same time this is a highly personal choice. Some people would simply go crazy having to work at home all day watching their young kids. For those people money gained may not be a huge or even the most important issue.

Who on earth pays $2500 a month for childcare?? A $40,000 income, take home of 75%, clears $2500 per month - wow, that would be crazy expensive childcare!

Perhaps someone with more than 1 kid?  And you're missing commuting costs, which includes additional time in daycare, gas and wear and tear.

kayvent

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Re: What is your opinion of Dave Ramsey?
« Reply #131 on: March 22, 2018, 10:40:46 AM »
Only things he doesn't mess with are having children pretty much whenever you want, women quitting their jobs to become SAHMs while the family is in lots of debt, and MLM schemes ...any statement even lightly against those three things would upset a lot of his base.


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

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

That may be true that there could be some intrinsic value to staying at work if your long term career prospects are bettered by staying in the workforce. Even if one spouses pay is totally consumed by child care, which happens fairly easily.

But that is simply not true for everyone. Like anything else you have to weigh the pros and cons of having both spouses work. For some people you could easily end up with a spouse working simply so they can pay for someone else to watch your kids. And have no tangible long term gains for the sacrifice.

I think day cars naturally overplay their value in early education. They are just glorified day car. Which I would be happy to go in the hole for if it meant both my wife and I had stellar careers. But it would never change the fact that I would vastly prefer my wife our I to be at home for our young children.

There are simply limits on how much I would sacrifice to full fill that desire. At the same time this is a highly personal choice. Some people would simply go crazy having to work at home all day watching their young kids. For those people money gained may not be a huge or even the most important issue.

Who on earth pays $2500 a month for childcare?? A $40,000 income, take home of 75%, clears $2500 per month - wow, that would be crazy expensive childcare!

In my area, itís 1600-2200/month for infants and thatís not really adequate for a couple that is working full time.  I actually moved jobs to get closer to home and day care, my in laws moved walking distance and weíre still going to need day care.

In Manhattan, day care can run as high as $3500.

I forget the numbers when my daughter was one.

I remember when she was three, daycare was 750$ a month and I my take-home working pay was 2,020$/month. When my daughter started at one in 2014, it was the top-rated one in our city. They had something like a 75% turnover rate though. The quality slipped accordingly. Not horribly but noticeably. It continued to slip after she left due to even more turnover.

The other daycare with repute, a Montessori daycare, did maintain over the years. It costs 800$/month.

The other daycares in the city are within the ballpark of those two.
« Last Edit: March 22, 2018, 10:42:23 AM by kayvent »

Milizard

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Re: What is your opinion of Dave Ramsey?
« Reply #132 on: March 22, 2018, 12:25:32 PM »
Since i had taken a few years off, the jobs I'm offered pay about 20-25% less than my last one. I crunched the numbers for one job offer. After daycare for 2 kids, I would have made $1-2/hour. I had a lot of other things to take care of outside of work, so it just didn't seem worth it at the time. That's a lot of additional stress on my whole family for pennies in return.  It can be argued that I should never had taken the time off from work in the first place, and I would agree, except it saved my health.  I was stressed, and teetering on the edge of obese BMI, with heart disease running on both sides of my family. I got back in shape, improved my diet, and lowered the stress factor by limiting the obligations.  You're not winning if you drop dead of a heart attack in your 40's!

SK Joyous

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Re: What is your opinion of Dave Ramsey?
« Reply #133 on: March 23, 2018, 10:44:57 AM »
Only things he doesn't mess with are having children pretty much whenever you want, women quitting their jobs to become SAHMs while the family is in lots of debt, and MLM schemes ...any statement even lightly against those three things would upset a lot of his base.


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

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

That may be true that there could be some intrinsic value to staying at work if your long term career prospects are bettered by staying in the workforce. Even if one spouses pay is totally consumed by child care, which happens fairly easily.

But that is simply not true for everyone. Like anything else you have to weigh the pros and cons of having both spouses work. For some people you could easily end up with a spouse working simply so they can pay for someone else to watch your kids. And have no tangible long term gains for the sacrifice.

I think day cars naturally overplay their value in early education. They are just glorified day car. Which I would be happy to go in the hole for if it meant both my wife and I had stellar careers. But it would never change the fact that I would vastly prefer my wife our I to be at home for our young children.

There are simply limits on how much I would sacrifice to full fill that desire. At the same time this is a highly personal choice. Some people would simply go crazy having to work at home all day watching their young kids. For those people money gained may not be a huge or even the most important issue.

Who on earth pays $2500 a month for childcare?? A $40,000 income, take home of 75%, clears $2500 per month - wow, that would be crazy expensive childcare!

In my area, itís 1600-2200/month for infants and thatís not really adequate for a couple that is working full time.  I actually moved jobs to get closer to home and day care, my in laws moved walking distance and weíre still going to need day care.

In Manhattan, day care can run as high as $3500.

I was certainly running on the assumption that if you are making $40,000 per year you are not living in Manhattan - if it is a much higher cost of living area, salaries should be higher as well no? To the other comment on more than one kid - yup, my comment still stands, but of course here in Canada we can take maternity leave for 1 year, so we generally don't have to find childcare for kids under 12 months - I would assume that would be more expensive.

SK Joyous

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Re: What is your opinion of Dave Ramsey?
« Reply #134 on: March 23, 2018, 10:47:14 AM »
Only things he doesn't mess with are having children pretty much whenever you want, women quitting their jobs to become SAHMs while the family is in lots of debt, and MLM schemes ...any statement even lightly against those three things would upset a lot of his base.


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

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

That may be true that there could be some intrinsic value to staying at work if your long term career prospects are bettered by staying in the workforce. Even if one spouses pay is totally consumed by child care, which happens fairly easily.

But that is simply not true for everyone. Like anything else you have to weigh the pros and cons of having both spouses work. For some people you could easily end up with a spouse working simply so they can pay for someone else to watch your kids. And have no tangible long term gains for the sacrifice.

I think day cars naturally overplay their value in early education. They are just glorified day car. Which I would be happy to go in the hole for if it meant both my wife and I had stellar careers. But it would never change the fact that I would vastly prefer my wife our I to be at home for our young children.

There are simply limits on how much I would sacrifice to full fill that desire. At the same time this is a highly personal choice. Some people would simply go crazy having to work at home all day watching their young kids. For those people money gained may not be a huge or even the most important issue.

Who on earth pays $2500 a month for childcare?? A $40,000 income, take home of 75%, clears $2500 per month - wow, that would be crazy expensive childcare!

There is much more to the equation than just the cost childcare.  Read "Your Money or Your Life".

Not sure why you are replying to me, since I literally only commented on the cost of childcare. Perhaps you meant to reply to someone else. Have read it, thanks.

v8rx7guy

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Re: What is your opinion of Dave Ramsey?
« Reply #135 on: March 23, 2018, 12:28:19 PM »
Only things he doesn't mess with are having children pretty much whenever you want, women quitting their jobs to become SAHMs while the family is in lots of debt, and MLM schemes ...any statement even lightly against those three things would upset a lot of his base.


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

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

That may be true that there could be some intrinsic value to staying at work if your long term career prospects are bettered by staying in the workforce. Even if one spouses pay is totally consumed by child care, which happens fairly easily.

But that is simply not true for everyone. Like anything else you have to weigh the pros and cons of having both spouses work. For some people you could easily end up with a spouse working simply so they can pay for someone else to watch your kids. And have no tangible long term gains for the sacrifice.

I think day cars naturally overplay their value in early education. They are just glorified day car. Which I would be happy to go in the hole for if it meant both my wife and I had stellar careers. But it would never change the fact that I would vastly prefer my wife our I to be at home for our young children.

There are simply limits on how much I would sacrifice to full fill that desire. At the same time this is a highly personal choice. Some people would simply go crazy having to work at home all day watching their young kids. For those people money gained may not be a huge or even the most important issue.

Who on earth pays $2500 a month for childcare?? A $40,000 income, take home of 75%, clears $2500 per month - wow, that would be crazy expensive childcare!

There is much more to the equation than just the cost childcare.  Read "Your Money or Your Life".

Not sure why you are replying to me, since I literally only commented on the cost of childcare. Perhaps you meant to reply to someone else. Have read it, thanks.

Here is why.  You said "who on earth pays $2,500 for childcare", with respect to Dave: "break[ing] down the costs behind a mother going to work, and he stated that unless Mom makes upwards of $40,000 it's not worth the daycare/clothes/transportation costs for her to go back to work".  You took $40,000 multiplied it by 0.75 and divided that by 12 and made the bad assumption that this means the mother is paying $2,500 for childcare.  When in fact Dave breaks down the trade-off of working vs. not working into more things than just the cost of childcare in a similar way to how "Your Money or Your Life" puts you through the exercise of calculating what it really costs to work.  It's not just Daycare costs.

jax8

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Re: What is your opinion of Dave Ramsey?
« Reply #136 on: March 23, 2018, 01:07:34 PM »
To be fair, Dave's $40K working mom figure was for daycare, a 2nd car, work clothes, haircuts, lunches out, etc.  It wasn't just a daycare budget.

But--in my short personal experience as a suburban SAHM--Mom will still want a car, clothes and haircuts, and cash for playdates or MOPS meetings if she's not working.  SAHM doesn't equal free.  I was a SAHM who couldn't afford to work, and I remember being jealous of SAHMs at MOPS meetings who rolled up in nice mini-vans with Starbucks coffee.  I couldn't afford $3 coffees.  (Isn't that such a silly thing to feel pangs over?!?)  And I couldn't afford the music classes/gymnastics/dance classes and 2 hours of pre-school that kept their schedules so full and their nice mini-vans gliding around town.

My in-laws provide free daycare now, so I ultimately landed in the best financial situation!  All income stays in my pocket!  I just pay for that "free" daycare in other ways...   HAHAHA

MrUpwardlyMobile

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Re: What is your opinion of Dave Ramsey?
« Reply #137 on: March 24, 2018, 01:17:38 PM »
Only things he doesn't mess with are having children pretty much whenever you want, women quitting their jobs to become SAHMs while the family is in lots of debt, and MLM schemes ...any statement even lightly against those three things would upset a lot of his base.


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

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

That may be true that there could be some intrinsic value to staying at work if your long term career prospects are bettered by staying in the workforce. Even if one spouses pay is totally consumed by child care, which happens fairly easily.

But that is simply not true for everyone. Like anything else you have to weigh the pros and cons of having both spouses work. For some people you could easily end up with a spouse working simply so they can pay for someone else to watch your kids. And have no tangible long term gains for the sacrifice.

I think day cars naturally overplay their value in early education. They are just glorified day car. Which I would be happy to go in the hole for if it meant both my wife and I had stellar careers. But it would never change the fact that I would vastly prefer my wife our I to be at home for our young children.

There are simply limits on how much I would sacrifice to full fill that desire. At the same time this is a highly personal choice. Some people would simply go crazy having to work at home all day watching their young kids. For those people money gained may not be a huge or even the most important issue.

Who on earth pays $2500 a month for childcare?? A $40,000 income, take home of 75%, clears $2500 per month - wow, that would be crazy expensive childcare!

In my area, itís 1600-2200/month for infants and thatís not really adequate for a couple that is working full time.  I actually moved jobs to get closer to home and day care, my in laws moved walking distance and weíre still going to need day care.

In Manhattan, day care can run as high as $3500.

I was certainly running on the assumption that if you are making $40,000 per year you are not living in Manhattan - if it is a much higher cost of living area, salaries should be higher as well no? To the other comment on more than one kid - yup, my comment still stands, but of course here in Canada we can take maternity leave for 1 year, so we generally don't have to find childcare for kids under 12 months - I would assume that would be more expensive.

Youíd be surprised. 40k salary isnt unheard of for people in some high cost of living areas.  Young lawyers tend to make 60k and they have mountains of debt to service.

Arbit Trage

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Re: What is your opinion of Dave Ramsey?
« Reply #138 on: March 25, 2018, 07:28:32 AM »
I'll listen from time to time, but as has been stated before, his advice is simplistic and geared toward getting out of debt. I feel that I need more advanced guidance, which Investor Alley has been able to provide me so far. Definitely don't agree with his stance on credit cards since I'm into travel hacking, piggybacking, cash rewards, etc.

swampwiz

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Re: What is your opinion of Dave Ramsey?
« Reply #139 on: March 25, 2018, 07:34:17 AM »
Only things he doesn't mess with are having children pretty much whenever you want, women quitting their jobs to become SAHMs while the family is in lots of debt, and MLM schemes ...any statement even lightly against those three things would upset a lot of his base.


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

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

That may be true that there could be some intrinsic value to staying at work if your long term career prospects are bettered by staying in the workforce. Even if one spouses pay is totally consumed by child care, which happens fairly easily.

But that is simply not true for everyone. Like anything else you have to weigh the pros and cons of having both spouses work. For some people you could easily end up with a spouse working simply so they can pay for someone else to watch your kids. And have no tangible long term gains for the sacrifice.

I think day cars naturally overplay their value in early education. They are just glorified day car. Which I would be happy to go in the hole for if it meant both my wife and I had stellar careers. But it would never change the fact that I would vastly prefer my wife our I to be at home for our young children.

There are simply limits on how much I would sacrifice to full fill that desire. At the same time this is a highly personal choice. Some people would simply go crazy having to work at home all day watching their young kids. For those people money gained may not be a huge or even the most important issue.

Who on earth pays $2500 a month for childcare?? A $40,000 income, take home of 75%, clears $2500 per month - wow, that would be crazy expensive childcare!

That would be like working just to pay for the childcare.

SK Joyous

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Re: What is your opinion of Dave Ramsey?
« Reply #140 on: March 26, 2018, 11:28:12 AM »
Only things he doesn't mess with are having children pretty much whenever you want, women quitting their jobs to become SAHMs while the family is in lots of debt, and MLM schemes ...any statement even lightly against those three things would upset a lot of his base.


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

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

That may be true that there could be some intrinsic value to staying at work if your long term career prospects are bettered by staying in the workforce. Even if one spouses pay is totally consumed by child care, which happens fairly easily.

But that is simply not true for everyone. Like anything else you have to weigh the pros and cons of having both spouses work. For some people you could easily end up with a spouse working simply so they can pay for someone else to watch your kids. And have no tangible long term gains for the sacrifice.

I think day cars naturally overplay their value in early education. They are just glorified day car. Which I would be happy to go in the hole for if it meant both my wife and I had stellar careers. But it would never change the fact that I would vastly prefer my wife our I to be at home for our young children.

There are simply limits on how much I would sacrifice to full fill that desire. At the same time this is a highly personal choice. Some people would simply go crazy having to work at home all day watching their young kids. For those people money gained may not be a huge or even the most important issue.

Who on earth pays $2500 a month for childcare?? A $40,000 income, take home of 75%, clears $2500 per month - wow, that would be crazy expensive childcare!

There is much more to the equation than just the cost childcare.  Read "Your Money or Your Life".

Not sure why you are replying to me, since I literally only commented on the cost of childcare. Perhaps you meant to reply to someone else. Have read it, thanks.

Here is why.  You said "who on earth pays $2,500 for childcare", with respect to Dave: "break[ing] down the costs behind a mother going to work, and he stated that unless Mom makes upwards of $40,000 it's not worth the daycare/clothes/transportation costs for her to go back to work".  You took $40,000 multiplied it by 0.75 and divided that by 12 and made the bad assumption that this means the mother is paying $2,500 for childcare.  When in fact Dave breaks down the trade-off of working vs. not working into more things than just the cost of childcare in a similar way to how "Your Money or Your Life" puts you through the exercise of calculating what it really costs to work.  It's not just Daycare costs.

Here man, I bolded the part I was replying to in the post I was replying to - are you happy now?

SK Joyous

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Re: What is your opinion of Dave Ramsey?
« Reply #141 on: March 26, 2018, 11:30:13 AM »
Only things he doesn't mess with are having children pretty much whenever you want, women quitting their jobs to become SAHMs while the family is in lots of debt, and MLM schemes ...any statement even lightly against those three things would upset a lot of his base.


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

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

That may be true that there could be some intrinsic value to staying at work if your long term career prospects are bettered by staying in the workforce. Even if one spouses pay is totally consumed by child care, which happens fairly easily.

But that is simply not true for everyone. Like anything else you have to weigh the pros and cons of having both spouses work. For some people you could easily end up with a spouse working simply so they can pay for someone else to watch your kids. And have no tangible long term gains for the sacrifice.

I think day cars naturally overplay their value in early education. They are just glorified day car. Which I would be happy to go in the hole for if it meant both my wife and I had stellar careers. But it would never change the fact that I would vastly prefer my wife our I to be at home for our young children.

There are simply limits on how much I would sacrifice to full fill that desire. At the same time this is a highly personal choice. Some people would simply go crazy having to work at home all day watching their young kids. For those people money gained may not be a huge or even the most important issue.

Who on earth pays $2500 a month for childcare?? A $40,000 income, take home of 75%, clears $2500 per month - wow, that would be crazy expensive childcare!

In my area, itís 1600-2200/month for infants and thatís not really adequate for a couple that is working full time.  I actually moved jobs to get closer to home and day care, my in laws moved walking distance and weíre still going to need day care.

In Manhattan, day care can run as high as $3500.

I was certainly running on the assumption that if you are making $40,000 per year you are not living in Manhattan - if it is a much higher cost of living area, salaries should be higher as well no? To the other comment on more than one kid - yup, my comment still stands, but of course here in Canada we can take maternity leave for 1 year, so we generally don't have to find childcare for kids under 12 months - I would assume that would be more expensive.

Youíd be surprised. 40k salary isnt unheard of for people in some high cost of living areas.  Young lawyers tend to make 60k and they have mountains of debt to service.

That does sound terrible, especially in a place as expensive to live as Manhattan - my deepest sympathies to those folks, that would be a hard slog for a while for sure, even being frugal.

Apple_Tango

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Re: What is your opinion of Dave Ramsey?
« Reply #142 on: March 26, 2018, 02:24:36 PM »
Dave is coming for us, yíall!!! Haha this is a new clip where he mentions "Financial Independence" and slams it...without actually talking about what it really means.

https://youtu.be/msYY-LI4jJ0
« Last Edit: March 30, 2018, 05:24:47 PM by Apple_Tango »

texxan1

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Re: What is your opinion of Dave Ramsey?
« Reply #143 on: March 30, 2018, 03:55:52 PM »
I personally hold Dave high but that is because my adventure to personal and financial freedom started out with his podcasts and his book.. I still give away 100 of his books a year.. I don't care what others think about him, because it made a difference in my life... and I'm 100 percent greatful for that.. However, I know that what he says does not work for everyone, and never will... I don't go by what he says nowadays, as I'm more advanced in my thinking.. But I'm more advanced by first following his simple teachings. They got me where I am today, and I will asways respect that about him

Its not for the advanced people, but for every day common folk it is a good path to start out on

Michael in ABQ

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Re: What is your opinion of Dave Ramsey?
« Reply #144 on: March 30, 2018, 05:47:49 PM »
I personally hold Dave high but that is because my adventure to personal and financial freedom started out with his podcasts and his book.. I still give away 100 of his books a year.. I don't care what others think about him, because it made a difference in my life... and I'm 100 percent greatful for that.. However, I know that what he says does not work for everyone, and never will... I don't go by what he says nowadays, as I'm more advanced in my thinking.. But I'm more advanced by first following his simple teachings. They got me where I am today, and I will asways respect that about him

Its not for the advanced people, but for every day common folk it is a good path to start out on

Well put. His book and show definitely provided us the motivation to get out of debt. I think the majority of people in the US could benefit from his teachings. However, finance is something I'm interested in (business degree with a minor in finance) so once I was able to get out of debt and get my income up I can see things from a less emotional view. I still agree with most of his teachings but for instance I have a side business reselling products on Amazon and the interest charges for buying all the inventory on a credit card are hugely outweighed by the ability to buy more inventory that I can then turnover. If I tried to cash flow it all there's simply a limitation on how many times you can turn your inventory in a year since you basically have to wait to sell things, and get paid by Amazon before you can buy more inventory. Putting a few thousand in working capital on a credit card vs. cash will easily double or triple my growth compared to a pure cash operation.

pantherchams

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Re: What is your opinion of Dave Ramsey?
« Reply #145 on: March 30, 2018, 05:55:58 PM »
I personally hold Dave high but that is because my adventure to personal and financial freedom started out with his podcasts and his book.. I still give away 100 of his books a year.. I don't care what others think about him, because it made a difference in my life... and I'm 100 percent greatful for that.. However, I know that what he says does not work for everyone, and never will... I don't go by what he says nowadays, as I'm more advanced in my thinking.. But I'm more advanced by first following his simple teachings. They got me where I am today, and I will asways respect that about him

Its not for the advanced people, but for every day common folk it is a good path to start out on

Nice! Whatever works for people is awesome IMO.  I listen to the podcast on the road often because I find a lot of the success stories inspirational.  It's basic stuff, but I think what he teaches is what most American families need.  When you hang out on FIRE sites and talk about complex financial strategies, I find it becomes easy to forget that this community is very abnormal compared to the status quo.  If it takes beating people over the head with basic hard and fast rules to keep people from going bankrupt i think that is fine, and it indirectly benefits all of us.  I am not religious, but I also enjoy his moral stances on most issues refreshing, maybe that makes me abnormal.

highplainsdrifter

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Re: What is your opinion of Dave Ramsey?
« Reply #146 on: April 01, 2018, 10:18:28 AM »
Dave Ramsey is a good entry point for people interested in taking control of their finances. He introduces us to dig deeper into the financial community. He provides a ton of content to give people motivation. I thank him for giving me motivation to stick through paying off my debts.

However, I think all of us here would agree that there are issues with much of the strategy that he preaches. We are on the Mustache forum after all! I think we'd all agree that the Mustache philosophy is much more logical and complete.

Dave preaches strategy that isn't mathematically logical, such as paying of the smallest debts first rather than the highest interest rate debts first. He rarely mentions that this strategy is based on behavioral finance rather than by math. He's not dumb for creating a strategy based on behavior but he does insist his audience to blindly follow his lead without questioning his tactics. As Mustachians' we naturally take a bit of offense to this and start to question all of his plan.

On top of that we are bothered by his overt pushing of Christianity and his repeating rants on the same topics over and over. His hatred for credit cards are based on one comment an AMEX credit card collector made to his wife, which made his wife question their relationship, so he now has a secret agenda to take away as much business from credit card companies as possible. Which he's doing an alright job there.

As Mustachians' are more objective financial thinkers we are bothered by this since we know that credit card rewards generate new money, a small source of income, from doing nothing more than what we are already doing. Not partaking in credit card rewards would be like not contributing to a 401k plan with match! My credit card gives double cash back (2%) if you put the proceeds into a retirement account. I often think how it's a legal loophole to get tax free credit card rewards and put them into a roth. The time value of money increases so much here with the tax free earnings. Do to higher than normal spending last year I generated $1,000 in rewards for my roth. After 20 of compounding, the rewards might make me rich (Dave Ramsey often says that rewards dollars will never make you rich. To this sentiment, I laugh in your face Dave).

Anyways I digress. Dave isn't all bad. He's the training wheels for the financial independence community. He will never evolve his beliefs to become better which may be the root of why he is so annoying to us. We strive to be better and more efficient.

birdman2003

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Re: What is your opinion of Dave Ramsey?
« Reply #147 on: April 02, 2018, 07:14:35 AM »
Quote
Do to higher than normal spending last year I generated $1,000 in rewards for my roth. After 20 of compounding, the rewards might make me rich (Dave Ramsey often says that rewards dollars will never make you rich. To this sentiment, I laugh in your face Dave).

$1000 a year for 20 years at 8% interest is only around $50k.

SwitchActiveDWG

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Re: What is your opinion of Dave Ramsey?
« Reply #148 on: April 02, 2018, 08:06:06 AM »
Quote
Do to higher than normal spending last year I generated $1,000 in rewards for my roth. After 20 of compounding, the rewards might make me rich (Dave Ramsey often says that rewards dollars will never make you rich. To this sentiment, I laugh in your face Dave).

$1000 a year for 20 years at 8% interest is only around $50k.

I donít think thatís correct..

Edited: read it as ten thousand, my mistake.

Also to his point I generated an extra $2,435 in income last year from rewards.
« Last Edit: April 02, 2018, 10:14:47 AM by SwitchActiveDWG »

mathlete

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Re: What is your opinion of Dave Ramsey?
« Reply #149 on: April 02, 2018, 08:53:38 AM »
$1,000 a year for 20 years at 8% = ((1.08 ^ 20) - 1)/ .08 * $1,000 ~= $45,700