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Valued Contributor
Dustink
Posts: 2,980
Registered: ‎10-02-2012
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Re: Thoughts on Dave Ramsey??


drewrico wrote:

I feel like most of what he says is bullcrap. Basically his message is for people to pay off their debt and not live their lives, while he has them buy his books and other crap so he can live the good life. complete bullcrap, hes in it for the money. 

 

i know people that are hardcore dave ramsay followers, they live no lives. they never eat out, they never treat theirselves. i dont believe in living like that. 

 

also i work retail in electronics. and i truly believe in the protection plans we sale, covers accidents and what not. you wouldn't believe how any people say that dave ramsey told them to not buy any kinds of protection plans. I almost feel like asking them if dave ramsey is going to buy them a new computer/tablet if it breaks.


I have never purchased a protection plan that didn't pay for itself. They are not always needed for all items, but for some things they are great. The best value is in the longer plans. For example, spend $2000 on a laptop and $500 on a 3 year ADH warranty. The likelihood that the warranty will be used in 3 year of heavy computer usage is high. Some plans, like the one best buy sells is very flexible. If the item keeps failing, BB will just give you $2,000 to buy another one. I bought a laptop, it failed after a few years. Best buy paid for the next computer, it failed after a couple years. BB paid for the next one. So, all along I have bought one laptop and 3 warranties. Yet have had great computers for many years.

 

Just make sure you aren't buying warranties that aren't needed. Like a 5 year warranty on a TV that comes with a 5 year warranty, or something along those lines. Make sure you know what the warranty covers. Does it cover dropping or spills, or does it only cover the unlikely event of hardware failure on your high end manufacture backed device? Does the device have coverage another way? Many credit cards will cover your device, so buying a warranty may not be needed. Is the device covered under your home insurance? My laptop for example if scheduled on my policy. So, I actually don't need that Best Buy policy. Though, I like only using the home policy for theft and using the best buy policy for everything else. Fewer claims on the insurance that way.

 

Can't say Ramsey is a fool, because he has made himself some great money. He may be more properly addressed as an enlightened scam artist.

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:21    


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New Contributor
drewrico
Posts: 105
Registered: ‎01-02-2013
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Re: Thoughts on Dave Ramsey??


Dustink wrote:

drewrico wrote:

I feel like most of what he says is bullcrap. Basically his message is for people to pay off their debt and not live their lives, while he has them buy his books and other crap so he can live the good life. complete bullcrap, hes in it for the money. 

 

i know people that are hardcore dave ramsay followers, they live no lives. they never eat out, they never treat theirselves. i dont believe in living like that. 

 

also i work retail in electronics. and i truly believe in the protection plans we sale, covers accidents and what not. you wouldn't believe how any people say that dave ramsey told them to not buy any kinds of protection plans. I almost feel like asking them if dave ramsey is going to buy them a new computer/tablet if it breaks.


I have never purchased a protection plan that didn't pay for itself. They are not always needed for all items, but for some things they are great. The best value is in the longer plans. For example, spend $2000 on a laptop and $500 on a 3 year ADH warranty. The likelihood that the warranty will be used in 3 year of heavy computer usage is high. Some plans, like the one best buy sells is very flexible. If the item keeps failing, BB will just give you $2,000 to buy another one. I bought a laptop, it failed after a few years. Best buy paid for the next computer, it failed after a couple years. BB paid for the next one. So, all along I have bought one laptop and 3 warranties. Yet have had great computers for many years.

 

Just make sure you aren't buying warranties that aren't needed. Like a 5 year warranty on a TV that comes with a 5 year warranty, or something along those lines. Make sure you know what the warranty covers. Does it cover dropping or spills, or does it only cover the unlikely event of hardware failure on your high end manufacture backed device? Does the device have coverage another way? Many credit cards will cover your device, so buying a warranty may not be needed. Is the device covered under your home insurance? My laptop for example if scheduled on my policy. So, I actually don't need that Best Buy policy. Though, I like only using the home policy for theft and using the best buy policy for everything else. Fewer claims on the insurance that way.

 

Can't say Ramsey is a fool, because he has made himself some great money. He may be more properly addressed as an enlightened scam artist.


 

 

i completely agree with your opinion on the protecton plans.

Valued Contributor
Dustink
Posts: 2,980
Registered: ‎10-02-2012
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Re: Thoughts on Dave Ramsey??

[ Edited ]

i completely agree with your opinion on the protection plans.


I assume you work at Best Buy?

 

I try to buy open items and consult with the store manager about the price. I can usually get an open item with a warranty for about the original cost of the item. I end up with a basically brand new item that is covered for years to come. Why buy a new one when it is just going to get opened and used anyways?

 

Now back on topic. I am sure DR has some good tips about saving money, but some of his teachers are just too broad. Not everyone is in the same situation. For example: he says everyone should just buy term life insurance. That is way to broad, some people may benefit from a whole life policy. For example, being only 21 and in good health. I could buy a $100,000 single premium whole life policy for well under $10,000. Why would I make a monthly payment for years to come if I can just make one payment now? Why would I continue to pay into something that never builds any value, when I could instead get a policy that has a cash aspect? After paying for that term policy for 30 years I would have put as much into as the whole life policy. At the 30 year mark, that whole life policy is still covering me for $100,000 whereas that term policy is useless. At the 30 year mark I had the term and am still in a position that I need insurance, I will be scrambling to renew at a much higher rate. Term is terrible advice to some people, situations for different people vary. To advice everyone to get term is just stupid.

 

Then again, he got people talking about him. No matter how bad his advice. He is making money off of it.

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:21    


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Established Contributor
TiggerDat
Posts: 1,040
Registered: ‎10-15-2011
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Re: Thoughts on Dave Ramsey??

Seeing as he says things that are factually not correct I don't think it's a good thing to pay much attention to him.

 

He suggests that someone could have a 0 FCIO score, and since the lowest FICO score is 300, this makes it factually incorrect.  It would be possible to have no score, which is different than having a zero!  In the worst case scenario when you showed up in the system, then the lowest score you could have is a 300. 

 

He makes other errors too, but since this forum is about credit I will leave it at that.



Rethink every purchase you make, before you make it. Use the card with the best rewards. Pay in full each month. Redeem rewards often. Use the cards online shopping for more discounts. Smile, knowing that being thrifty allows you to actually get more out of the same amount of money!
Valued Contributor
Repo-ed
Posts: 2,954
Registered: ‎02-09-2012
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Re: Thoughts on Dave Ramsey??


Dustink wrote:

Repo-ed wrote:

DR lives UP (literally) the street from me, and whatever he's done - he's done it right...


I bet he uses rewards cards and just puts on this no credit card facade for all the people he is targeting. No rational, affluent person, with a stable budget, would miss out on the rewards and benefits of credit cards.

 

He has made money by expressing what he conveys, not likely he actually believe's what he is preaching. 


A lot like those that stand in front of church congregations.

 

Here's a quick blurp about his home.  I think they stated he paid cash, etc...

 

But Maybe he does have that much residual money, he truly does not care about rewards?

 

http://www.coolsprings.com/news/dave-ramseys-house/

 

But by nature, I'm a skeptic

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bobebob
Posts: 255
Registered: ‎08-14-2011
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Re: Thoughts on Dave Ramsey??

I never really got more than surface deep reading on Ramsey's advice, but I do TiVo some of the Suze Orman programs.

 

They both seem to stress saving for the future over enjoying life in the present to an excessive amount in my opinion.

 

I think that Orman would have you eating PB&J sandwiches and taking the bus to work to save a couple of extra dollars for retirement.  And at that, she never wants anyone to retire until they are 67 or 70.

 

I think it is more important to strike a balance between enjoying life in the present and saving for the future. I think that it would be tragic to scrimp and save and live like a pauper all your life only to die right when you would be retiring. I plan(and execute that plan) on retiring early and living well, but I also take trips and spend money on my motorcycling hobby in the present.

 

Including both my contributions and the profit sharing my company put into my 401k and my contributions to my Health Savings Account, I saved about 28% of my income into some form of retirement last year.  I also spent 10 to 15% on my hobbies. Assuming my hobby doesn't kill me, I will be comfortable in retirement.  But should something happen and I don't make it to retirement, I won't regret not enjoying my life when I had the opportunity.

 

And I don't think that living in the moment is an acceptable excuse for running up credit card debt.  I don't have any debt other than my mortgage and I am paying that off early as well.  I use credit cards, but I pay them off in full every month.  When used responsibly they can give you some great benefits (cash back, extra warranty coverage, low interest rate if you do have to carry a balance).  I put most of my purchases and budget items through my AMEX.  Next month, they will be sending me a check for over $600 and I haven't paid a dime in interest or fees. If you are disciplined, I fail to see the downside to playing the credit card game. I'm looking into refinancing my house and I know that with my 800 FICO score I'll get the best rates available.

 

Orman also irritates me in her logic for not taking out a 401K loan. She states that since you pay taxes on the money you pay back to the 401k account and on the money you eventually take out of the 401k, you are being taxed twice if you take out a loan.  This ignores the fact that the money you took out of the 401k for the loan had not been taxed yet, which makes it a wash in my opinion.  There is the potential risk of loosing your job before the loan is paid back and having to take the outstanding loan amount as a distribution with the penalties that apply.  But her position that you are being taxed twice is ridiculous.

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Valued Contributor
Dustink
Posts: 2,980
Registered: ‎10-02-2012
0

Re: Thoughts on Dave Ramsey??


Repo-ed wrote:

Dustink wrote:

Repo-ed wrote:

DR lives UP (literally) the street from me, and whatever he's done - he's done it right...


I bet he uses rewards cards and just puts on this no credit card facade for all the people he is targeting. No rational, affluent person, with a stable budget, would miss out on the rewards and benefits of credit cards.

 

He has made money by expressing what he conveys, not likely he actually believe's what he is preaching. 


A lot like those that stand in front of church congregations.

 

Here's a quick blurp about his home.  I think they stated he paid cash, etc...

 

But Maybe he does have that much residual money, he truly does not care about rewards?

 

http://www.coolsprings.com/news/dave-ramseys-house/

 

But by nature, I'm a skeptic


I was going to use that as an example as well, but didn't want to offend anyone. The all too many preachers and priests who do not believe in god, but do not mind taking money from the congregation.

 

I understand paying cash for a house, to completely believe he did pay cash for that house. Why take out the loan if you don't have to? Although, with a 15 year loan at 2.5% he could likely earn more money elsewhere with his cash and just make payments on the house.

 

The credit cards though, I don't see a single reason to not use them for rewards and PIF. 

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:21    


     $14k          $8.5K          $7.5k          $7.5k         $6.5k             $6k             $5k            $5k             $5k              $5k           NPSL       @ 0%
Established Contributor
FutureBillionaire
Posts: 644
Registered: ‎12-12-2012
0

Re: Thoughts on Dave Ramsey??


bobebob wrote:

I never really got more than surface deep reading on Ramsey's advice, but I do TiVo some of the Suze Orman programs.

 

They both seem to stress saving for the future over enjoying life in the present to an excessive amount in my opinion.

 

I think that Orman would have you eating PB&J sandwiches and taking the bus to work to save a couple of extra dollars for retirement.  And at that, she never wants anyone to retire until they are 67 or 70.

 

I think it is more important to strike a balance between enjoying life in the present and saving for the future. I think that it would be tragic to scrimp and save and live like a pauper all your life only to die right when you would be retiring. I plan(and execute that plan) on retiring early and living well, but I also take trips and spend money on my motorcycling hobby in the present.

 

Including both my contributions and the profit sharing my company put into my 401k and my contributions to my Health Savings Account, I saved about 28% of my income into some form of retirement last year.  I also spent 10 to 15% on my hobbies. Assuming my hobby doesn't kill me, I will be comfortable in retirement.  But should something happen and I don't make it to retirement, I won't regret not enjoying my life when I had the opportunity.

 

And I don't think that living in the moment is an acceptable excuse for running up credit card debt.  I don't have any debt other than my mortgage and I am paying that off early as well.  I use credit cards, but I pay them off in full every month.  When used responsibly they can give you some great benefits (cash back, extra warranty coverage, low interest rate if you do have to carry a balance).  I put most of my purchases and budget items through my AMEX.  Next month, they will be sending me a check for over $600 and I haven't paid a dime in interest or fees. If you are disciplined, I fail to see the downside to playing the credit card game. I'm looking into refinancing my house and I know that with my 800 FICO score I'll get the best rates available.

 

Orman also irritates me in her logic for not taking out a 401K loan. She states that since you pay taxes on the money you pay back to the 401k account and on the money you eventually take out of the 401k, you are being taxed twice if you take out a loan.  This ignores the fact that the money you took out of the 401k for the loan had not been taxed yet, which makes it a wash in my opinion.  There is the potential risk of loosing your job before the loan is paid back and having to take the outstanding loan amount as a distribution with the penalties that apply.  But her position that you are being taxed twice is ridiculous.


I agree about the 401k loans.  You are taking out loans that don't show up on your credit.  Also, you are paying yourself interest back.  I take loans all the time from my 401k. I'm getting a better return by paying myself interest than through my investments.  They all say the same thing, but I don't see great results from their advice. 

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Contributor
thebanjoman
Posts: 76
Registered: ‎07-30-2011
0

Re: Thoughts on Dave Ramsey??

Best Dave Ramsey advice I know...

 

https://www.daveramsey.com/index.cfm?event=askdave/&intContentItemId=124792

 

Excerpt:


Let me give you an example. I have debit cards all through this company—like 60 of them—that my employees use. They are authorized users on those debit cards. It does not help their credit at all.


If you can find usefulness in his advice, more power to you, but take him with a grain of salt... possibly on the rim of a margarita glass. Y'know, to take the edge off.

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LionLaw
Posts: 258
Registered: ‎06-10-2012
0

Re: Thoughts on Dave Ramsey??

I've never really followed people like Dave Ramsey, so I can't really speak to the advice he's giving. But to advocate never having or using a credit card because you MIGHT get in over your head is just bad advice. If you want to avoid getting in over your head, then set a reasonable budget and stick to it. Having and using credit and charge cards is helpful for a variety of reasons that people here are already aware of.

For people who are so weak willed and irresponsible that they can't have an open credit limit without spending it all right away, then credit cards are a bad idea. Maybe that's s big enough portion of the population to keep people like Dave Ramsey in business. But people with the maturity to handle their finances responsibly don't need such advice.

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