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How many of you follow Dave Ramsey's advice for everything?
Posted on 1/9/23 at 9:03 am
Posted on 1/9/23 at 9:03 am
I'm mainly referring to the "get out of debt" rules. I recently bought a "new-to-me" vehicle over the weekend.
2019 Toyota Tacoma 4x4 - $24,200 + tax/fees/warranty.
Of course, I financed it with $6,000 down. I could technically pay it off next month with the company stock I've bought over the past few years, but that would only leave me with a few thousand left over. How do you guys "cope" with writing a check that big.
I've treated my company stock account as a savings account. I would really need to be hurting to touch it seeing as to how long of a process it takes through Fidelity to actually get "cash-in-hand". It's like 3-4 days or so. Not to mention the taxes I would have to pay.
2019 Toyota Tacoma 4x4 - $24,200 + tax/fees/warranty.
Of course, I financed it with $6,000 down. I could technically pay it off next month with the company stock I've bought over the past few years, but that would only leave me with a few thousand left over. How do you guys "cope" with writing a check that big.
I've treated my company stock account as a savings account. I would really need to be hurting to touch it seeing as to how long of a process it takes through Fidelity to actually get "cash-in-hand". It's like 3-4 days or so. Not to mention the taxes I would have to pay.
22
Posted on 1/9/23 at 9:08 am to finchmeister08
What’s your interest rate? If I can confidently outperform my interest rate with margin for effort/time required and the applicable risk, then it makes sense to finance. It was a lot easier to justify that at 0.9% on my last vehicle purchase than the 6% I’m hearing about recently
Posted on 1/9/23 at 9:10 am to finchmeister08
Dave Ramsey is a moron. Ignore everything he says.
Posted on 1/9/23 at 9:16 am to finchmeister08
Not for everything. 90% of the country would be better off if they did though.
This post was edited on 1/9/23 at 9:17 am
Posted on 1/9/23 at 9:43 am to finchmeister08
DR is great for the masses. I took my wife’s car in for service recently and was in the showroom just checking out things.
A young girl was buying a new vehicle and she was in the phone with someone telling them the payment was more than her rent. Her interest rate was like 15 percent.
As someone with a hard and fast rule that my family does not pay interest over 5 percent, that makes me cringe.
A young girl was buying a new vehicle and she was in the phone with someone telling them the payment was more than her rent. Her interest rate was like 15 percent.
As someone with a hard and fast rule that my family does not pay interest over 5 percent, that makes me cringe.
This post was edited on 1/9/23 at 9:45 am
Posted on 1/9/23 at 9:48 am to finchmeister08
quote:
I'm mainly referring to the "get out of debt" rules. I recently bought a "new-to-me" vehicle over the weekend.
2019 Toyota Tacoma 4x4 - $24,200 + tax/fees/warranty.
Of course, I financed it with $6,000 down. I could technically pay it off next month with the company stock I've bought over the past few years, but that would only leave me with a few thousand left over. How do you guys "cope" with writing a check that big.
I've treated my company stock account as a savings account. I would really need to be hurting to touch it seeing as to how long of a process it takes through Fidelity to actually get "cash-in-hand". It's like 3-4 days or so. Not to mention the taxes I would have to pay.
I followed him and to this day i follow most of his principles.
Hes good to follow for kids just getting out of high school or college because usually they dont know what to do with money.
Posted on 1/9/23 at 10:20 am to finchmeister08
I view Dave’s advice like weight loss advice. In all honesty, it would probably benefit 75%+ people in this country just following his basic guidelines. But for those who know their finances and have discipline, it’s elementary
Same with weight loss, most of the country is overweight/obese but very fit people don’t need basic health advice
Same with weight loss, most of the country is overweight/obese but very fit people don’t need basic health advice
Posted on 1/9/23 at 11:08 am to finchmeister08
DR has a plan. That’s better than not having a plan. If you don’t have the financial knowledge to know there are better ways, his way is a good way.
Paying off loans smallest to largest regardless of interest rates is probably the only Baby Step that I don’t agree with.
Paying off loans smallest to largest regardless of interest rates is probably the only Baby Step that I don’t agree with.
Posted on 1/9/23 at 11:34 am to finchmeister08
quote:
How many of you follow Dave Ramsey's advice for everything?
No one is perfect so no one is going to be right all the time about "everything". That said, Dave's advice is spot-on for the vast majority of Americans because the vast majority absolutely suck at personal finances. This is evidenced by his making millions by telling people basic things like "live within your means", "invest a little bit from each check", etc.
quote:
6.84% interest
quote:
I could technically pay it off next month with the company stock I've bought over the past few years, but that would only leave me with a few thousand left over. How do you guys "cope" with writing a check that big.
I've treated my company stock account as a savings account. I would really need to be hurting to touch it seeing as to how long of a process it takes through Fidelity to actually get "cash-in-hand". It's like 3-4 days or so. Not to mention the taxes I would have to pay.
Ouch. If it's a retirement account, leave it be. What you would pay for taking that out early would make that interest rate look like an OT 10. Pay ahead on the note as much as you can to get it over with as soon as possible.
Posted on 1/9/23 at 1:06 pm to finchmeister08
Dave is speaking to average debt consumers, and he offers them sage advice. If one cannot handle low interest debt (or debt in general), Dave is their guy.
However, if, for example, your 30-year mortgage is 2.8% and let's say you have the equivalent cash invested, with expected earning 7+%, over mortgage-equivalent period, Dave is not your guy...in my opinion.
(risk / return rears itself again in these pesky financial decisions)
For some, "peace of mind" of being debt free outweighs the alternative thousands/millions of dollars to use other people's money to make money.
It is personal. But, Dave is not for everyone, especially those who use other people's money to make money.
However, if, for example, your 30-year mortgage is 2.8% and let's say you have the equivalent cash invested, with expected earning 7+%, over mortgage-equivalent period, Dave is not your guy...in my opinion.
(risk / return rears itself again in these pesky financial decisions)
For some, "peace of mind" of being debt free outweighs the alternative thousands/millions of dollars to use other people's money to make money.
It is personal. But, Dave is not for everyone, especially those who use other people's money to make money.
Posted on 1/9/23 at 1:55 pm to finchmeister08
Most people would say that haivng 7% rate on a depreciating asset is not a good thing.
I have no issue with Dave's ideas regarding not running credit card debt and paying interest. If you pay it off each month, I don't understand the issue with credit cards.
As far as cars... the reality is that unless you are in college, a $1000 beater car just isn't realistic anymore. A 48 month loan on a reliable car makes a lot of sense for a lot of people. But instaed... they get a 84 month loan on a car that is way more expensive than they need.
There's no gray area with DR, but life is spent mostly in the gray area.
I have no issue with Dave's ideas regarding not running credit card debt and paying interest. If you pay it off each month, I don't understand the issue with credit cards.
As far as cars... the reality is that unless you are in college, a $1000 beater car just isn't realistic anymore. A 48 month loan on a reliable car makes a lot of sense for a lot of people. But instaed... they get a 84 month loan on a car that is way more expensive than they need.
There's no gray area with DR, but life is spent mostly in the gray area.
Posted on 1/9/23 at 2:45 pm to finchmeister08
I would pay that down ASAP. You're failing to account for risk. You are too heavily weighted in your employer's stock. You are dependent on them for income and investment growth. Unless you are very certain that company is the best place for your $ it is best to invest elsewhere.
You will likely pay capital gains eventually so might as well bite the bullet. We're only talking $18k ($24k - $6k down payment). Besides, you only pay capital gains tax on the gains not basis. If the entire contribution was held over 1 year and tripled in value you'd only pay $900 taxes (15% of $6k basis.) In reality some shares have probably grown little or none. You may want to avoid selling shares you've held less than a year though if they've had much growth.
Moving forward, consider selling after the 1 year mark so you only pay lower long term capital gains rate on minimal growth. Then reinvest in something else (like an index ETF) to reduce your concentration in employer stock.
You will likely pay capital gains eventually so might as well bite the bullet. We're only talking $18k ($24k - $6k down payment). Besides, you only pay capital gains tax on the gains not basis. If the entire contribution was held over 1 year and tripled in value you'd only pay $900 taxes (15% of $6k basis.) In reality some shares have probably grown little or none. You may want to avoid selling shares you've held less than a year though if they've had much growth.
Moving forward, consider selling after the 1 year mark so you only pay lower long term capital gains rate on minimal growth. Then reinvest in something else (like an index ETF) to reduce your concentration in employer stock.
This post was edited on 1/9/23 at 2:49 pm
Posted on 1/9/23 at 3:07 pm to finchmeister08
I was really bad with finances with I was younger and got myself into a LOT of debt. I started listening to Dave and watching Suze Orman, buckled down and did a hybrid approach between the 2 of them. I wasn't 100% all in, rice-and-beans, as Dave suggests, but I certainly got very focused on my financing, my debt and getting myself out of it. It took several years, but I got it done. I now live 100% debt free other than my mortgage, which I am actively working on having paid off in the next 6-7 years. After years of drowning in debt, there is definitely a freedom and liberation that comes from being debt free. Perhaps paying down debt (especially low interest debt) vs. investing is not always the best decision on paper, but the peace of mind that comes from being debt free is worth it to me.
Posted on 1/9/23 at 6:45 pm to finchmeister08
I follow baby steps and thats about it.
Posted on 1/9/23 at 11:06 pm to finchmeister08
DR is for people who can't handle money. Lots of his advice is just stupid but sometimes people are dumber than his advice and it works for them. Some of the concepts he preaches are sound, but some are just "I couldn't handle a credit card so nobody could handle a credit card" and that is just dumb. We make a couple hundred dollars a month off of cash back CC's and get some nice perks on some of them and never pay a dime of interest, I also don't keep any annual fee cards.
Posted on 1/10/23 at 10:21 am to finchmeister08
I follow some of it. Have credit card that pay off monthly, don’t pay off mortgage since 1.99% interest rate which he wouldn’t agree with but debt free in every capacity.
He preaches debt free lifestyle. Being debt free has more value to some than others. His advice is more valuable to certain people.
If it helps people don’t sh*t on it.
He preaches debt free lifestyle. Being debt free has more value to some than others. His advice is more valuable to certain people.
If it helps people don’t sh*t on it.
Posted on 1/10/23 at 2:28 pm to finchmeister08
Dave Ramsey in a nutshell:
This post was edited on 1/10/23 at 2:30 pm
Posted on 1/10/23 at 4:49 pm to finchmeister08
Personally, financial security and reducing risk are more important than beating the market, so I tend to agree with a lot of what he says, especially when interest rates are higher than stock market returns.
For the folks who think they can get better ROI by investing and beating the average interest rate on a car, house, truck, whatever, they will ignore Dave.
For the folks who think they can get better ROI by investing and beating the average interest rate on a car, house, truck, whatever, they will ignore Dave.
Posted on 1/10/23 at 10:29 pm to finchmeister08
Another thing to consider: Ramsey has a massive following and he makes millions monthly in ways his audience doesn't realize.
He's not just peddling books.
His ELP program is huge. From life insurance, real estate agents, lenders, invesement professionals. He's eating about 30% of every commission those people make. He's in every market in the country selling billions in RE etc a year that's he's never laid eyes on.
He likes controversy on this views...it gets eyeballs on his show and like this thread, discussion to land people viewing on his sites.
He's not just peddling books.
His ELP program is huge. From life insurance, real estate agents, lenders, invesement professionals. He's eating about 30% of every commission those people make. He's in every market in the country selling billions in RE etc a year that's he's never laid eyes on.
He likes controversy on this views...it gets eyeballs on his show and like this thread, discussion to land people viewing on his sites.
This post was edited on 1/10/23 at 10:31 pm
Posted on 1/10/23 at 11:34 pm to finchmeister08
My early days when I knew nothing about handling money, DR was a great way to start off. I do not follow all of his advice and do believe that there are some subtle things that could be changed/updated. However, I believe being debt free, living on less than you make, consistent investing over a long time, avoiding “get rich quick”, are all philosophies that most Americans would benefit from following as best as possible.
To all the detractors, Dave Ramsey has helped more people in regards to money management than everyone in this thread combined. I respect him for that.
To all the detractors, Dave Ramsey has helped more people in regards to money management than everyone in this thread combined. I respect him for that.
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