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My thoughts about Dave Ramsey.

tag
800who
Regular Contributor

Re: Thoughts on Dave Ramsey Philosophy

Depends on the person behind the CC... someone like me.. I've had CC for three years and I've never paid any interest since I've started. I have a rotating 5% categories card, a 3% groceries card and a 2% everything card and it's a game to me to use them to their best abilities.. average a few hundred dollars a year in cash back. If the idea of it is daunting to you and you feel as if it'll tempt you to use CC as "extra money" then absolutely avoid because you'll find yourself buying stuff you shouldn't and justifying with something like the cash back haha. Dave Ramsey's financial advice works... no way around that, but I find with CC and marriage he's VERY narrow and doesn't budge with his opinons, which is where I disagree... however if you watch a lot of his videos helping callers you'll see a lot of his advice is very similar and becomes almost predictable.. i.e: spend less, make more, get rid of the over priced car... at the end of the day everyone's different.

Message 81 of 186
Shooting-For-800
Senior Contributor

Re: Thoughts on Dave Ramsey Philosophy

I strongly agree with some of his advice.

I agree with some of his advice.

I disagree with some of his advice.

I strongly disagree with some of his advice.

 

 

Rebuild started in 2014  -  $100k unsecured credit in 2017  -  $500k unsecured credit in 2024.

DON'T WORK FOR CREDIT CARDS ... MAKE CREDIT CARDS WORK FOR YOU!



Message 82 of 186
Anonymous
Not applicable

Re: Thoughts on Dave Ramsey Philosophy

I think there is something there for everyone in his guidance. For some it common sense. For others they need someone to state the obvious.

I agree with pretty much all of his principles. The only one that we had trouble with was not having credit cards with the amount of travel my husband does. Car rentals are a PITA with a debit card. We tried and have switched back to using credit but we are much smarter with it now. We budget, save, PIF and live within our means. We rely on savings and not credit to plan for emergencies.

I honestly cringe when I read some off the posts here. How some rely on their credit utilization padding to cover emergencies but don't have the savings to cover it or how someone wants to buy a house because the mortgage is cheaper than rent but they are in debt, no savings and barely making it now.

Our financial house is made up of more than just our FICO scores. I realize many of us already know this but from some of the posts I can see that some do not.

One of his thoughts that I wholeheartedly agree with is that we spend more when we swipe. With cash we are limited to the money in our wallets. We aren't chasing maximum category cash back or getting starry eyed by an Amex offer.

I also find it easier to reconcile our budget when we operate on cash/debit only.



Message 83 of 186
calyx
Super Contributor

Re: Thoughts on Dave Ramsey Philosophy

For a lot of reasons, I just generally can't stand Dave Ramsey.      I do agree, whole heartedly with a 0 based budget, and I think he's as good of a gateway into that for those who are in debt, but he certainly didn't invent it, so I don't consider that "his" philosophy any more than anyone else's. 

But yeah, the fussiness of credit? People just need to not think of it as "free money" and live within their means.  In the meantime, getting a free flight here or there so I can throw extra money into savings or whatever isn't going to make me rich, but I'll definitely take it.

Happy practitioner of AZE7or8or9or10 | Team Finances > FICO
Message 84 of 186
Save-n-Invest
Established Contributor

Re: Thoughts on Dave Ramsey Philosophy

I tripped over Ramsey while watching YouTube vids. His items began to appear in the sidebar more and more often and eventually took most of the space. No idea of why unless it's because I visit this site. I watched a few. At first he was entertaining with his blowhard presentations. Now I seldom to never click on one because he is a one trick pony selling his financial products/advice that are not entirely sound. 

 

Ramsey mocks the concept of a fiduciary in investing. He's probably getting a kickback from his approved advisors. The deity as wingman cuts against my grain. He is way too political for my tastes. Religion and politics have no place in money management advice. The one exception is areas where political issues impact investing. His distain for credit cards is foolish. People who are not disciplined with funds will overdraw checking or have other issues. 

 

I consider Ramsey Solutions a cult. He's just another person making a lot of money from "advice" to people who are distressed. Advising people against having expense exceed revenue is comon sense. That would be ok without all the yelling and other weird performance. 

 

Personally I am debt adverse. I alwasy have been. It's just the way I am. No big virtue on my part. I'm uncomfortable owing anything. I use credit cards for most purchases. It's easier and safer than carrying cash. I don't like debit cards. I have one I never activated. One of those bank folks who press you to get a debit card. I agreed to make the transaction move along knowing I would not activate the debit card. 

 

I've never financed a car. I buy new and pay cash. I understand that new vehicles are not the most prudent purchases but I like a new car to my specifications. Personal preference. I have never had any debt with the exception of one home mortgage. It was the longest ten years of my life. Hocking my house for anything other and a vital organ it outside my frame of reference.

 

To some degree I am living Ramsey's philosophy. I know people who get the shakes when they retire the debt on a car and are not comfortable until they go out and go back in debt for another car. I don't understand that but it's their money to use as they see fit. The folks who lease a car than buy it out at the end of the lease term are a fascination to me. Again, their money not mine.

 

Ramsey rails against individual stocks. That makes no sense to me. He's 12% mutual fund is amusing. That fund has a guranteed 12% return witout fees? I'm beating his 12% witht individual stocks. That mutual fund will trigger tax implications without the investor making changes. I don't have that issue. 

 

If a person is serioulsy in debt and Ramsey is helpfult that's great. As soon as that person gets back on their feet another advisor my be more helpful. 

 

 

Message 85 of 186
Anonymous
Not applicable

Re: Thoughts on Dave Ramsey Philosophy

I am not any expert by any means, and have not heard a ton of his stuff, just a few podcast one of my co workers liked to listen to and a few people on here mentioned him to me in my situation, I can say he does seem to have a good message but he also makes things seem a lot simpleler than they are.

 

I do see the benifits in his view of the snowball method paying off smallest debt first as it does keep you motivated, I have not really ever used this method.  I heard people calling in with 100-600k in debt while making 50k a year and he tells them for instance someone with 100k in debt making 50k they can be on a bean and rice diet and pay that off in 2-3 years. NOT POSSIBLE, in my opinon.

 

Also you have to consider what type of debt it is, I had about 112k in revolving debt with interest rates as high as 27percent, I was making a min payement of of 360 to one creditor and 259 of that was interest. so only 100 to the prinicipal. I looked at me making 3k in min payments I was making at one point and saw on my creditors statments I would not be out of this debt for 40 yrs.

 

do some math when I was at my highest debt of about 112k just averaging 20percent interest, that comes to well over 20k a year just not even touching the principal of what you owe, so say someone makes even 60k a year and they net 40 of that, add all their daily expenses, rent,internet,cable,gas,car payment, insurance, food, maitnenance, cell phone, utilites, kids, etc.... can go on and on.

 

I am currently living on a budget with everything included of about 15k a year, but add all that stuff up and most can't do it especially if you have kids your budget is going to be way more than that.

 

So now you net 40k a year and sounds good, yes I could pay off 100k in debt in 3 years easy but now you have to remember all your living expenses so say an average person making that 60k netting 40k, not even having kids can put after living dirt poor on a 15k budget, that is 25k they have to spend towards debt, now depending on their debt with those hight interest rates 20k of that is just interest a year so only 5k towards a principal of that debt, it would take a lifetime of crappy living to pay that off.

Message 86 of 186
Anonymous
Not applicable

Re: Thoughts on Dave Ramsey Philosophy

Also  I want to add I hear him advocating no one to file BK, while yes I am the same thinking that you have to give your all before doing that, he goes against his own principals, from what I read he filed BK at one point, and has managed to make a good life for himself, and its easy when you were born to a nice family that had connections at banks and were already in the real estate business,  now someone who makes millions of his business of advice, through many channels its easy to say pay cash for everything. He has never been in the slums like most of us.

 

Again nothing against him just my opinion and knowing from a real life person not making tons of cash how hard, a debt can be, and realisticaly how paying of a huge debt can be. I had to change many things to get where I am now on paying my own debt off.

things he does not mention.

Message 87 of 186
Save-n-Invest
Established Contributor

Re: Thoughts on Dave Ramsey Philosophy

@bdub1234, on some of Ramsey's vids he gives the reason/excuse for his bankruptcy “so they didn't come and take the baby's crib”. That one makes my eyes roll. Typical do as I say not as I do”

Message 88 of 186
loyalsudz
Regular Contributor

Re: My thoughts about Dave Ramsey.

Dave Ramsey actually teaches basic financial literacy, very well.  Now, The Total Money Makeover is a great start and an easy (less than 3 hour) read and at less than $10 or free in the library - I do not feel like I have been bamboozled in the least. Personal experiences include not just reading, The Total Money Makeover but also going thru Financial Peace University (dual online and DVD/cd $99 deal). This 6 to 9 week course that walked me thru not just motivational stories, which there are plenty in the side bars of The Total Money Makeover, but the answered how and help me develop my why - (future me thanking me for doing the work so I can live like no one else - my weird).  It allows you to exercise your financial muscles, especially if they have been in a state of inertia (i.e., dumb with zeros attached to it mistakes).  Moreover, to begin with the ETFs investing when all the money is in debt payments or you are living in fear of stepping out into a world where the jargon is new did not make sense.  I wanted to understand why things were ordered the way they were in his 7 Baby Steps and then how that would translate in terms of a turning point as I leveraged other tools like active and passive income, investments, insurance, along with credit cards, heloc/ploc.  My Fico forum education has been crucial to the latter tools aforementioned along with other financial mentors.(1)   Meanwhile, I have watched Bank of America, Vanguard, Fidelity type of videos, podcast, and articles along with remaining on good terms with my loan manager at my CU as I achieve milestones to ensure that the products and services I selected are still aligned with my future objectives and goals.  I have gone from debt up to my eyeballs, i.e. a secure card because of baddies to actually having a plan and it has been 10 years in the making (passive income and leaving a legacy inheritance in perpetuity).  Finally, it is never too late to clean up and take a chance to make a change for the better.  I am starting over again after a storm or two+ and it has literally saved my life to be able to take advantage of these tools. Dave Ramsey is a good start but some people just do not need that level of support, no biggie. 

 

(1) JMoney at Budgets are Sexy, Financial Samuri (How to Reach $1M) and Todd Tressider (living off only 10 to 20% of your income to invest/save the rest) and Mr. Money Mustache (FIRE)/Mad Fientist - aka Science of Financial Independence.

Message 89 of 186
Anonymous
Not applicable

Re: My thoughts about Dave Ramsey.

Honestly my thoughts on Dave Ramsey is that the guy is beyond worthless.  If someone is completely clueless about money they should read George S Clason's book The Richest Man in Babylon.  It gives timeless advice and covers all the same things Dave Ramsey talks about but does so in a non idiotic way.  For example the book talks about paying yourself first i.e. reverse budgeting which is much easier for a beginner to do then trying to stick to zero sum budget which being honest sets the vast majority of people up for failure.  First most people aren't going to stay consistent with it and second even if they do stay consistent with it it's probably going to make them miserable..."oh no! I bought a monster energy drink last month and went $3 over budget!!!!!!!!"  This might seem silly but what happens is when someone fails to meet the budget exactly they get bent out of shape over it and beat themsevles up for spending $3.  I really honestly believe his budgeting method is horrible for 99% of the population...but hey that just keeps giving Dave repeat business though right? 

 

It's a lot easier to set money aside into investments and savings first.  Then pay the your bills and then spend the left over money and have peace of mind doing so.  As far as his finicial planners and products go the guy is a flat out conman getting a kickback off those planners ripping off naive people.  It's amazing to hear him talk about index funds being bad investment vehicles and then have him preach about lousy mutual funds with horrible fees...however he gets a kickback so he doesn't want you to use the better product.

 

Honestly when it comes to Dave Ramsey I always advice people to look elsewhere because I view the guy is a conman.  

Message 90 of 186
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