Dave Ramsey question

[Horseshoez]

Regarding "six-figures", these days that really isn't a lot of money.  Yes, I understand it is unobtanium for many, but the fact is, hitting that level is both unsurprising and unimpressive.  Another way to look at is, talking about your salary is like talking about how fast your car is, someone always has one faster.  

[Remedios]

Unless uploading  paystub or W2 becomes a requirement for asking questions, income is what someone says it is. 

[GatorGuy]

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@Brian_Earl_Spilner wrote:

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@disdreamin wrote:

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@Anonymous wrote:

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I think Ramsey and others do address this, saying that most people don't make anything overall in credit card rewards, interest and other fees more than eat this up any gains.    And obviously, if you don't PIF (nearly) all the time, that can be the case.  I've heard a low figure (maybe 5-10% gave a net gain) from someone I respect, but don't know where that figure comes from.   He also said, and I'm sure the same is true on MyFico, that nearly ALL his clients say that they are in that 5-10% (PIF and getting good rewards) and he's really not so convinced!

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I find it funny that he doesn't believe his clients. I'd venture a guess that many here are more educated about card selection and good rewards than the general public. Personally, the last time I carried a balance was about 15 years ago and it was a large sum for one month (plus trailing interest the following month, of course). It was an unexpected expense that I couldn't delay and my cash reserves at the time didn't allow me to cut that check immediately, unfortunately. Since then, haven't paid a dime in credit card interest and I can't see why anyone would doubt my word on that.

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Mainly because so many here claim the same, along with making over 6 figures a year. When the reality is only 5-10% it's hard to believe over half the posters here do it. While it's possible, statistically it's highly unlikely. Even though there's anonymity people don't want to look bad on the webz. Personally, I go with whatever someone posts as the truth. If they're lying, they're only hurting themselves when it comes to getting help. 

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However this forum is not a random sample of the population. Which means that attributes of the population can not be applied to our group.

In fact, those who are earning above average incomes are the ones most likely interested in improving their finances and credit.

[incognitony]

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@Remedios wrote:

Unless uploading  paystub or W2 becomes a requirement for asking questions, income is what someone says it is. 

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So basically it's a credit card  app or in many cases an auto app. I used to do collections for a sub prime credit card company and it was laughable the numbers people put in for income to get a $350 card with no grace period and crazy fees. .50 to use automated services for more than 2 things.

[Guyatthebeach]

Mark3038,

You're not missing much other than Dave is in this for the money. He makes money from the books, his show, the clicks & comments on his YouTube channel.  

The only thing I agree with him on is building an emergency savings fund and retirement.  I disagree with him on pulling money out of savings for most purchases. I completely disagree with him on having a FICO and using credit cards & lines of credit.  In today's world with cyber attacks and privacy hacks, you're better off using a credit card and paying it off when the bill arrives.  

Just my opinion. 

Guyatthebeach

[Anonymous]

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@GatorGuy wrote:

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However this forum is not a random sample of the population. Which means that attributes of the population can not be applied to our group.

In fact, those who are earning above average incomes are the ones most likely interested in improving their finances and credit.

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Maybe, or maybe not.   At certain incomes levels, a lot of these are basically in the noise, and 20% interest for a few months doesn't matter at all.    Whereas some with much smaller incomes are, by neccessity, much more careful to attempt to avoid interest when they are able.

Also, MyFico, compared to say FlyerTalk, has a much higher percentage of people rebuilding, and there are a number of regular posts about the best way to attack some significant credit card debt.  So, while it's great that they are asking, they obviously didn't PIF all the time in the past.

[Anonymous]

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@disdreamin wrote:

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I find it funny that he doesn't believe his clients. I'd venture a guess that many here are more educated about card selection and good rewards than the general public. 

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His client base are generally the young contributing small amounts to retirement, or older ones who have started late.   So not necessarily financially savvy, or with enough resources/discipline to not spend more than they can fully payoff, at least not every month.

Thinking about it, I wonder how much crossover there is here, are the credit card savvy also well set up for retirement, or does chasing CLIs and SUBs hinder retirement funding!

[Horseshoez]

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@Anonymous wrote:

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@disdreamin wrote:

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I find it funny that he doesn't believe his clients. I'd venture a guess that many here are more educated about card selection and good rewards than the general public. 

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His client base are generally the young contributing small amounts to retirement, or older ones who have started late.   So not necessarily financially savvy, or with enough resources/discipline to not spend more than they can fully payoff, at least not every month.

Thinking about it, I wonder how much crossover there is here, are the credit card savvy also well set up for retirement, or does chasing CLIs and SUBs hinder retirement funding!

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Some of us cover the full spectrum of being both credit savvy and needing to start (or restart in our case) our retirement from zero relatively late in life.  We went from zero debt to draining all of our retirement accounts and maxing our credit cards to keep food on the table and the lights on.  Then bankruptcy set in with the long cold winter of a 5-year Chapter 13.

I have to tell you, it is a bizarre feeling to go from being relatively well off to flat broke, and then back to being relatively well off, with a nice comfortable 401(K) all in the span of about 12 years.

[Citylights18]

I tend to think a more balance approach can work better. Use debit card for non-bonus purchases and carry around a rewards card for bonus categories. This is what I'm doing, though I admit I am getting 4% cash back on my debit card while I'm pushing 9-15% on my rewards cards.

Does Dave Ramsey not realize the benefits of some of the travel cards? Certain people are frequent flyers and take multiple vacations a year. Loyalty cards earn extra status and simplify booking for people.

When you are under 30 its one thing to go all cash and do without. I didn't have my first credit card until I was 33. But I could get by with driving to see family, taking girlfriends on one road trip a year, maybe going out to dinner Saturday night and that is it. You can't do that as you get older.

[disdreamin]

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@Anonymous wrote:

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@disdreamin wrote:

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I find it funny that he doesn't believe his clients. I'd venture a guess that many here are more educated about card selection and good rewards than the general public. 

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His client base are generally the young contributing small amounts to retirement, or older ones who have started late.   So not necessarily financially savvy, or with enough resources/discipline to not spend more than they can fully payoff, at least not every month.

Thinking about it, I wonder how much crossover there is here, are the credit card savvy also well set up for retirement, or does chasing CLIs and SUBs hinder retirement funding!

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I can only speak for myself, but I know I started saving for retirement very late. It's a combination of not going to college straightaway and it taking a lot of years - 11 of them to be exact lol - to finish. I think I've done alright with retirement savings, but I prioritized paying down my mortgage and saving for college over retirement. That might not make financial sense (it would almost certainly have been profitable to put money into retirement savings and let the mortgage ride for 30 years), but it has worked for me.

As far as chasing CLI's - which I don't - and SUB - which I do, when they make sense - I don't ever spend anything extra to meet SUBs. I might redirect spend from one cc to another, but it's nothing I wouldn't normally spend. If a cards SUB doesn't fit into that, I probably wouldn't benefit from that card anyways. 

If anything, it was my focus on paying down my mortgage and making sure my kids finish college debt-free that will keep me from having more substantial retirement savings. I'm completely okay with that.