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re: Did y'all catch Dave Ramsey rip George Kamel apart over withdrawing 4% from retirement?
Posted on 4/6/24 at 10:25 pm to thunderbird1100
Posted on 4/6/24 at 10:25 pm to thunderbird1100
quote:
25% of take homepay on a 15 year fixed rate mortgage is an absolute dream for probably 80-90%+ of people out there if you're buying now.
Very few first time homebuyers can afford this.
So what do they do instead? They keep renting.
How much rental property does Ramsey own?
1
Posted on 4/6/24 at 10:27 pm to urinetrouble
quote:
agree with the other poster about 15 year mortgages not being realistic in the current environment, but his 25% of after-tax is a good guideline.
25% of after tax on a 30 year mortgage is perfectly reasonable for a first time home buyer in this market.
Another example about how his No credit card debt makes sense, but everything else he says does not
Posted on 4/7/24 at 8:21 pm to LSUFanHouston
1) It seems like George's video was talking about FIRE related retirement and how you needed a 3% withdrawl rate to be safe on the FIRE plan. He wasn't really talking about regular retirment.
2) I don't like Dave's investment or withdrawl advice in general.
3) I do think Dave is a great resource for people with bad financial skills. I think he is good for society overall. But this board is probably 90% personal finance junkies, so his stuff would be overly simplistic. But I don't get the Dave hate from people.
4) I do understand why he sells a one size fits all approach. He is like AA for personal finance.
2) I don't like Dave's investment or withdrawl advice in general.
3) I do think Dave is a great resource for people with bad financial skills. I think he is good for society overall. But this board is probably 90% personal finance junkies, so his stuff would be overly simplistic. But I don't get the Dave hate from people.
4) I do understand why he sells a one size fits all approach. He is like AA for personal finance.
Posted on 4/8/24 at 10:25 am to Billy Blanks
quote:
It drives me insane he pretends taxes don't exist.
Yeah I always love the advice about if someone has a brokerage account with say $200k invested in it and they have like $150k left on their house he will always say "just sell off what you need from the brokerage and pay off the mortgage" even if they say something like a I have a 3% mortgage. They could even say something like most of that money will be taxed at the 32% federal level and we have high state income taxes and he's like who cares you wont have a mortgage
Posted on 4/8/24 at 10:59 am to finchmeister08
Posted on 4/8/24 at 11:00 am to LSUFanHouston
quote:
How much rental property does Ramsey own?
He claims he has 600 million in real estate holdings.
Posted on 4/8/24 at 12:38 pm to finchmeister08
quote:
What's the Money Board think?
Withdraw nothing. Live off SS and let it grow in low risk funds at 4-5% between 65-70.5.
Posted on 4/8/24 at 12:52 pm to ronricks
quote:
He claims he has 600 million in real estate holdings.
Sounds like he has an incentive to discourage people from buying a home unless they meet some almost impossible metric.
Posted on 4/8/24 at 1:08 pm to LSUFanHouston
quote:
Sounds like he has an incentive to discourage people from buying a home unless they meet some almost impossible metric.
He's had this same advice for like 3 decades, well before he owned a bunch of rental property. Also I dont think he actually owns much residential property anymore, mostly commercial he said.
Also like half of that $600M in property is that big HQ he had built in Franklin TN
So not to defend him, but thats definitely not why he gives out the 25% of take home pay on 15 year fixed rate mortgage. To his credit, this was actually fairly doable when interest rates were like 2-3% on 15 year mortgages also considering housing prices then as well
The biggest issue many people have with Ramsey is his advice never changes which makes no sense as the landscape can always change.
This post was edited on 4/8/24 at 1:10 pm
Posted on 4/8/24 at 1:59 pm to ronricks
quote:
He claims he has 600 million in real estate holdings.
He claims the vast majority is commercial real estate. Plus his big Ramsey office building and the event center they just build in the last couple years.
Posted on 4/8/24 at 2:15 pm to finchmeister08
quote:
What's the Money Board think?
That Dave doesn't know the difference between arithmetic and geometric returns.
Posted on 4/8/24 at 5:49 pm to thunderbird1100
quote:
To his credit, this was actually fairly doable when interest rates were like 2-3% on 15 year mortgages also considering housing prices then as well
This point annoys me. Like I said before, I understand his AA style hard and fast rules, but times have certainly changed when it comes to home prices.
Posted on 4/8/24 at 7:50 pm to GeauxTigers123
Arguably, it was terrible advice to take out a 15 when rates were historically low. Besides the opportunity costs if you have a temporary income/financial crisis the lower 30 yr payments are more manageable.
His advice isnt evolving or nuanced because his target demographic cant handle it. They're financial ibiciles, the type that prefers unwaivering doctrinal dictates. Intellectually curious beginners inevjtably graduate past his blanket prescription for the ignorant masses. To be clear, I like Ramsey but disagree w the fine details and consider his show more like financial Jerry Springer show.
His advice isnt evolving or nuanced because his target demographic cant handle it. They're financial ibiciles, the type that prefers unwaivering doctrinal dictates. Intellectually curious beginners inevjtably graduate past his blanket prescription for the ignorant masses. To be clear, I like Ramsey but disagree w the fine details and consider his show more like financial Jerry Springer show.
Posted on 4/8/24 at 8:24 pm to thunderbird1100
quote:
They could even say something like most of that money will be taxed at the 32% federal level and we have high state income taxes and he's like who cares you wont have a mortgage
I've even heard him blindly give that advice near the end of the year when caller could easily optimize taxes by splitting up the transaction over 2 tax years.
Highest LTCG rate is 20% plus 3.8% NIIT. Sure, a big liquidation could also drive SS to be taxed and trigger IRMAA for elderly. I doubt any of his callers are dealing w enough income and short term gains to trigger highest bracket.
Posted on 4/8/24 at 9:08 pm to jcaz
quote:
Seems like Ramsey's advice is to live in a shack while having a million in the bank and then die and pass it off to your children who will continue living in that shack.
Live like no one else do you can live like no one else!
Posted on 4/9/24 at 8:05 am to TorchtheFlyingTiger
quote:
I doubt any of his callers are dealing w enough income and short term gains to trigger highest bracket.
Idk. Sometimes he has people call in for advice who are making a million plus per year. Usually it seems like they have just started making those sums.
Posted on 4/9/24 at 8:16 am to TorchtheFlyingTiger
quote:
Arguably, it was terrible advice to take out a 15 when rates were historically low. Besides the opportunity costs if you have a temporary income/financial crisis the lower 30 yr payments are more manageable.
Depends on situation. We went from a 30 year at 4.25% we got in 2017 on our house purchase to a 15 year refi at 2.375% in 2020. Main reasons?
- We wanted to make sure this first house we bought had enough equity in it once we sold it to move to another place would easily provide a 20%+ down payment on the next house, we bought the house with 5% down @ $275k (so $261,500 financed), we refi'd $248,000 and then the house was worth $320k at that point so right around 20%, this also got rid of PMI when original lender we were having issues with getting rid of the PMI and they wanted a lot of money to refinance themselves which would get rid of PMI they said
- The refinance cost itself was really minimal, so much so the payback period was like 9-10 months or something crazy short
- The difference in the mortgage was $1,366 (With PMI) up to just $1,639, and either one of us could easily pay that plus the escrow/HOA no problem still if the other lost a job so it just made sense to us to do it
The last payment we made on the old mortgage had only $413 going to principal and $953 to interest/PMI. The first mortgage payment on the new mortgage had $1,148 go to principal and $491 go to interest
Have no regrets doing it, although now the house is worth $462k and we owe $199k
This post was edited on 4/9/24 at 8:19 am
Posted on 4/9/24 at 8:23 am to TorchtheFlyingTiger
quote:
I doubt any of his callers are dealing w enough income and short term gains to trigger highest bracket.
He's definitely had people call in who suddenly made big amounts in the stock market (or crypto especially) and said should I sell to payoff xyz debt.
He generally never even asks if its short or long term gains, caller just has to mention it. But that can make a big difference for sure
This post was edited on 4/9/24 at 8:25 am
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