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re: Dave Ramsey's advice is awful
Posted on 1/20/18 at 6:59 am to buckeye_vol
Posted on 1/20/18 at 6:59 am to buckeye_vol
To be fair - all the shite he listed had interest rates below the 24% threshold mentioned in OP. The two you listed do not. Just saying.
1
Posted on 1/20/18 at 7:10 am to 3morereps
quote:
Hope everyone following him, paying off their 4% mortgage tbe last few years is having fun while im hurdling their arse with 24% in the market.
Dave's advice IS NOT MEANT FOR YOU, Jackwaggon
it is for people who HAVE NO CLUE HOW TO HANDLE MONEY
you are a smart person who knows 24 > 4. You'd be surprised how many people don't know that
Posted on 1/20/18 at 7:11 am to TigerTatorTots
quote:
TigerTatorTots
Posted on 1/20/18 at 7:12 am to 3morereps
quote:
3morereps
Congratulations on being the smartest, richest guy on the planet. We all envy you and would love to live your life of wealth and luxury.
Dave Ramsey, if followed per the plan, will absolutely lead to financial freedom. Obviously, following that plan won’t make people as rich as you obviously are, but for someone who grew up without any financial smarts or help from their family, its a fantastic plan. It is a way to change your family tree, to be the first generation living better.
Posted on 1/20/18 at 7:13 am to matthew25
quote:this
47% of americans do not own a single stock
50% of americans do not have $400 to their name
70% of americans cannot scrape up $1000 to pay for a root canal or transmission.
- per the federal reserve study.
Posted on 1/20/18 at 8:18 am to buckeye_vol
Not exactly a strawman. Coming in here and blasting people for paying a 4% mortgage in advance is no different than blasting someone for investing in a bond fund with a return of 3.5%.
If he seriously thinks the equity market is the only and best way to invest and anyone who doesn't go full bore is an idiot he should go full bore. To hell with diversification. He ahpuld be investing all assets as well as pledging future assets to make the investment. Clearly it's a mathematical proposition 24% > everything else.
If that doesn't seem silly than i can't explain this to you.
If he seriously thinks the equity market is the only and best way to invest and anyone who doesn't go full bore is an idiot he should go full bore. To hell with diversification. He ahpuld be investing all assets as well as pledging future assets to make the investment. Clearly it's a mathematical proposition 24% > everything else.
If that doesn't seem silly than i can't explain this to you.
Posted on 1/20/18 at 8:53 am to RJSambola
Ramsey uses the the mega-churches to take advantage of people's money much like the preachers do. I listen to him until he starts in on the "It is God's money garbage"!
Posted on 1/20/18 at 9:14 am to crazycubes
Whats with the frowny face? I said basically exactly what you said here:
quote:
it is for people who HAVE NO CLUE HOW TO HANDLE MONEY
Posted on 1/20/18 at 11:12 am to TigerTatorTots
I don't think that Ramsey's advice is JUST for people who have no clue about money. Especially in the areas of establishing and following a budget, I can't think of anyone who wouldn't benefit from that. From my time in banking, I found that what high earners tend to do is hide budgeting sins with their higher than average paychecks. I admit, I have been, and sometimes still am, guilty of that. They/we still have no idea where the money is going, or how much is being wasted... they/we just (mistakenly) believe that as long as the credit card bill is paid in full each month, everything is OK. In my more recent life, utilizing Six Sigma principles (long after I got my MBA and established a good size portfolio of equities and real estate), I've seen the benefits of defining areas of concern, measuring gaps, analyzing, improving and then establishing strict methodologies and control systems (rules, if you will). In my world, if you can't describe what you do as a process, you don't know what you're doing. You're just winging it. If you make a mistake, you can't figure out where things went wrong. And if things go right, you can't replicate that success because you were just flipping noodles at the wall. And while one can nitpick this or that nugget from Ramsey (often rightly so), I do think that his overall advice pushes people to follow a strict methodology, or set of rules. And from a 1000 feet, that approach, I certainly agree with.
By the way, what the OP claims is not what Ramsey suggests. It's more than fine to be critical of people or their views and advice. But if you do, it's helpful if you get the premise right. By the time you start knocking down your mortgage balance (whatever the interest rate), you're already socking away 15% into retirement and you've established educational funds for your kids (if you have kids).
But look, I'm not here to sell Dave Ramsey's systems or products. I'm not looking to be on his show to do a debt free scream. But as I've listened to him over the past year or so, I can say that his views are more in line with my own than they are opposed. But I do have and use credit cards - I have never used a debit card (because of security concerns). I have employed leverage when purchasing real estate. I have an automobile collection, the value of which well exceeds 50% of my annual gross income. And although I am within sight of (early) retirement, I am making no attempt to pay down my 3%, 30 year mortgage. But I am not going into retirement with a mortgage. I will eventually sell this house and move into another home that I own that's free and clear. One of his local ELPs pushes higher fee and/or front-loaded mutual funds and annuity products. I don't believe in that either. I use Vanguard products, or other low expense ETF or mutual fund products - and I also buy individual stocks. So yeah, I agree that some of his investment views are overly generic and rely on overly high investment return assumptions. But so what? You follow SOME SORT of strict investment methodology and wind up with $1.1 million instead of $1.4 million because the assumptions were overly high? Poor you.
By the way, what the OP claims is not what Ramsey suggests. It's more than fine to be critical of people or their views and advice. But if you do, it's helpful if you get the premise right. By the time you start knocking down your mortgage balance (whatever the interest rate), you're already socking away 15% into retirement and you've established educational funds for your kids (if you have kids).
But look, I'm not here to sell Dave Ramsey's systems or products. I'm not looking to be on his show to do a debt free scream. But as I've listened to him over the past year or so, I can say that his views are more in line with my own than they are opposed. But I do have and use credit cards - I have never used a debit card (because of security concerns). I have employed leverage when purchasing real estate. I have an automobile collection, the value of which well exceeds 50% of my annual gross income. And although I am within sight of (early) retirement, I am making no attempt to pay down my 3%, 30 year mortgage. But I am not going into retirement with a mortgage. I will eventually sell this house and move into another home that I own that's free and clear. One of his local ELPs pushes higher fee and/or front-loaded mutual funds and annuity products. I don't believe in that either. I use Vanguard products, or other low expense ETF or mutual fund products - and I also buy individual stocks. So yeah, I agree that some of his investment views are overly generic and rely on overly high investment return assumptions. But so what? You follow SOME SORT of strict investment methodology and wind up with $1.1 million instead of $1.4 million because the assumptions were overly high? Poor you.
Posted on 1/20/18 at 11:51 am to RJSambola
quote:Well I guess I interpreted the OP as criticizing people who are putting every extra cent into paying off their home and not investing any of it. Although I’m not sure if Dave even recommends that.
If he seriously thinks the equity market is the only and best way to invest and anyone who doesn't go full bore is an idiot he should go full bore. To hell with diversification. He ahpuld be investing all assets as well as pledging future assets to make the investment. Clearly it's a mathematical proposition 24% > everything else.
So I still think your post was ridiculous but I guess it’s not so bad if the OP was making his own strawman.
Posted on 1/20/18 at 11:58 am to ATLdawg25
quote:
To be fair - all the shite he listed had interest rates below the 24% threshold mentioned in OP. The two you listed do not. Just saying.
How do you know the interest rate of the loan sharks? Besides I wasn’t sure how one could use their credit card to invest since I’ve never thought of it, so I was assuming it would be processed like a cash advance with upwards of 10% interest on top of the 14% rate he mentioned.
Posted on 1/20/18 at 4:52 pm to Jag_Warrior
quote:
So yeah, I agree that some of his investment views are overly generic and rely on overly high investment return assumptions. But so what? You follow SOME SORT of strict investment methodology and wind up with $1.1 million instead of $1.4 million because the assumptions were overly high? Poor you.
Great post!
Posted on 1/20/18 at 5:40 pm to 3morereps
His advice is awful to financially sound people. To financial retards his words should be followed like gospel.
That’s all you need or want to know about Ramsey
That’s all you need or want to know about Ramsey
Posted on 1/20/18 at 6:04 pm to ItNeverRains
quote:
His advice is awful to financially sound people.
Read Jag_Warrior's post above, there are a lot of people that might be considered financially sound that could dramatically improve their financial position by following Dave's plan as opposed to what they are doing. I also once worked in banking and sat down regularly with people that were "financially sound" only because their income was high enough to absorb the results of having no financial plan.
Posted on 1/20/18 at 8:00 pm to 3morereps
quote:
paying off their 4% mortgage tbe last few years is having fun while im hurdling their arse with 24% in the market.
Enjoy the current market while it lasts. A guaranteed 4% return for 30 years isn't awful either, of course.
That said, I agree DR advice is largely geared to people who have no idea how to handle money and need a good kick in the arse to right the ship. I think of it as like AA for alcoholics. Not ideal, but someone who seriously needs to get his head screwed on straight might get benefit from it.
Posted on 1/20/18 at 10:03 pm to foshizzle
quote:I’ve seen this argued countless times, but the more I think about it, the less it makes sense.
That said, I agree DR advice is largely geared to people who have no idea how to handle money and need a good kick in the arse to right the ship.
If a person is motivated, capable, and disciplined enough to actual right the ship by going to the extremes that he argues, why wouldn’t they also be able to right the ship by following a more balanced and strategic plan to minimize debt and maximize long term financial growth?
Posted on 1/21/18 at 11:56 am to buckeye_vol
quote:
That said, I agree DR advice is largely geared to people who have no idea how to handle money and need a good kick in the arse to right the ship.
I’ve seen this argued countless times, but the more I think about it, the less it makes sense.
If a person is motivated, capable, and disciplined enough to actual right the ship by going to the extremes that he argues, why wouldn’t they also be able to right the ship by following a more balanced and strategic plan to minimize debt and maximize long term financial growth?
No. The sort of people he helps need absolute black and white scenarios. They can't deal with reasonable compromises. It is like alcoholics not being able to have a single drink without falling of the wagon.
Posted on 1/21/18 at 1:07 pm to 3morereps
His advice to get out of debt is awful?
Posted on 1/21/18 at 5:26 pm to BearsFan
quote:I get the black and white, but I still think that you could make it more black and white while also not going to extremes of Ramsey’s advice or AA. They just need guidance.
No. The sort of people he helps need absolute black and white scenarios. They can't deal with reasonable compromises. It is like alcoholics not being able to have a single drink without falling of the wagon.
Although I have more of an issue with AA’s approach though because it creates a self-fulfilling prophecy when there are plenty of examples and approaches that have shown that it’s not always the case.
This post was edited on 1/21/18 at 5:28 pm
Posted on 1/21/18 at 7:23 pm to 3morereps
This would be stupid for most people. Most people can't handle money at all. His advice is solid for the majority of people.
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