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re: Why I have changed my mind on Dave Ramsey
Posted on 8/9/18 at 12:20 pm to chalmetteowl
Posted on 8/9/18 at 12:20 pm to chalmetteowl
quote:
don't think most people are financially dumb, rather, they just don't make enough money
I used to listen to his show via podcast ocassiaonlly, if for nothing else to give myself a reality check about how tough a lot of other peoples situations are.
I was amazed at how many people make less than $50,000 and have household incomes under $75,000. That's crazy.
I just hired a new assistant in my office and we paid her $50,000 because as we thought, "who in the world can afford to live in Houston for less than $50k." But obviously, a lot of people do it.
But as I would hear Ramsay say to people, "You don't have a budget problem. You have an income problem."
1
Posted on 8/9/18 at 12:48 pm to mule74
quote:
just hired a new assistant in my office and we paid her $50,000 because as we thought, "who in the world can afford to live in Houston for less than $50k."
Not to hi-jack this thread, but what was her background.
I only ask because my SO and I live in Houston. She has a business degree and a couple years experience and needs a new job. We can't find anything for more than about 14 or 15/hr.
Posted on 8/9/18 at 12:52 pm to baseballmind1212
quote:
I only ask because my SO and I live in Houston. She has a business degree and a couple years experience and needs a new job. We can't find anything for more than about 14 or 15/hr.
Really? What field is she in?
Posted on 8/9/18 at 12:59 pm to anc
the personal value of "financial freedom" is also something that many just don't understand. You can't really quantify it but being debt free is worth it for many many people. It makes everything so much more simple.
Posted on 8/9/18 at 1:12 pm to MrJimBeam
quote:
I'm baffled grown adults HAVE TO send their kids to private school when they live in a great public school district. That to me tells me everything I need to know about your friend. He only gives a shite about perception and not reality which is why he is in a terrible bind now.
Oh, its not a friend. I offered to help some churches create a financial ministry of sorts - he just found me through that.
They both have good, secure jobs, but make about $90k combined. They simply cannot afford the $22k in tuition charges but it is non-negotiable. The wife teaches at the private school and they get a discount - but its more about keeping up appearances in my opinion.
Posted on 8/9/18 at 1:26 pm to anc
This has a lot to do with why people are in such bad debt. Perception. Social Media has just escalated that.
Posted on 8/9/18 at 1:32 pm to anc
quote:
but its more about keeping up appearances in my opinion.
It most definitely is. They clearly have other issues besides finances. And making 90k combined and sending your kids to private school does not compute
Posted on 8/9/18 at 1:35 pm to mule74
Her experience is in small commercial construction. Invoicing, office managing, payroll. Her two previous employers were small subcontractors. She handled all their office duties.
Posted on 8/9/18 at 2:15 pm to anc
quote:
I have overestimated the intellect of the average person and I no longer take issue with him.
I watched the first episode of Hard Knocks last night. One of the D lineman was explaining compound interest to the others, who were completely dumbfounded. These are men who at least *attended some college (although likely weren't held to a high standard of learning). Long story short, I agree with you.
Posted on 8/9/18 at 2:32 pm to anc
Yeah, Ramsey's message is not for everyone. Some people can handle money, some can't. Dave speaks to those who can't.
Posted on 8/9/18 at 3:04 pm to bstew3006
quote:
I agree, it's stupid for people that have no control over their finances and cant pay a $200 entergy bill. But I laugh when he and his minions call people who are financially sound STOOPID for having a CC with little to no balance and a car loan with 2%-3% rate.
With the people he is preaching to, there can't be any gray area. It's got to be this or that. If he starts saying, some people it's ok to have car debt and credit cards, but others it's not ok, he confuses his message to the people who need to hear it.
It's easier (and honestly, better) for him to say no way, no how, no exceptions. And any good preacher (let's be honest, he fancies himself one) has to say it with a bit of stank and a bit of emotion to drive home the point.
Posted on 8/9/18 at 3:11 pm to LSUFanHouston
Extremely well said. He simply can't say his advice is good only for idiots, furthermore it's bad business for him to do so.
His advice isn't for everyone but it would work extremely well even for those that are successful and wealthy, just maybe not as well as other methods.
His advice isn't for everyone but it would work extremely well even for those that are successful and wealthy, just maybe not as well as other methods.
Posted on 8/9/18 at 3:18 pm to LSUFanHouston
Very well said and I agree! But it's the ones that take it as Holy Grail, no pun intended, and applies to everyone.
That's why I've always said I agree with about 80% of his message.
quote:
His advice isn't for everyone but it would work extremely well even for those that are successful and wealthy, just maybe not as well as other methods.
That's why I've always said I agree with about 80% of his message.
Posted on 8/9/18 at 4:09 pm to oklahogjr
quote:Well put.
Dave's method is great because the downside is opportunity cost losses but realized gains in value of savings.
it doesnt work if you're optimizing the numbers. it works great if you need discipline.
Posted on 8/9/18 at 5:25 pm to anc
quote:
As Ive gotten older, some unique opportunities have come my way. One of them involves me helping some families in some local churches tackle some financial challenges. I've dealt with dozens and dozens over the past few months - and Ive come to learn that it doesn't matter the education level, what neighborhood people live in, or any other factor - people are genuinely bad with money.
1) While I agree that most people struggle with money (probably well in excess of 50% of people), you are helping people who are openly looking for help. So yeah you are going to see some bad stuff. There are however, many people out there who live within their means and save.
2) I would say that there is a correlation between education and being good with money. Obviously this isn't absolute, but I think it does matter.
3) I think Dave's advice isn't the best for people who are good with money, but it is great for those with financial problems.
Posted on 8/9/18 at 5:35 pm to GeauxTigers123
quote:
3) I think Dave's advice isn't the best for people who are good with money, but it is great for those with financial problems.
Let me just add that many people who think they're good with money are wrong. It's likely they just have an income that is sufficiently high enough to mask their problems for a while. I say this from experience.
Posted on 8/9/18 at 6:15 pm to baseballmind1212
quote:
Not to hi-jack this thread, but what was her background.
I only ask because my SO and I live in Houston. She has a business degree and a couple years experience and needs a new job. We can't find anything for more than about 14 or 15/hr.
We pay completely green clerks more than that and they get overtime and pretty solid benefits
Posted on 8/9/18 at 6:26 pm to ELVIS U
Well my mantra is only borrow for things that appreciate AND keep as much borrowing power as you can to buy as many thing that will appreciate as you can.
I am like Ramsey in that I despise car debt and other living expense debt.
Home mortgages the exception.
Finance being the study of risk and money (some will say time and money but in reality time is risk and to think of it as risk is a smarter thing I believe) many do not put enough emphasis on risk. Losing a job--what is that risk? Can you get another quick enough? ect.
Keeping living cost low and remaining debt free dramatically reduces risk. Peace of mind cannot be entered into an old TI85.
Save to be in business for yourself, to be financially independent, or to quit working.
People talk of opportunity cost of car loans. That is silly. A $35000 loan is a loan whether it is 0 interest or 50% interest and consumes your borrowing power. Buy a cheaper car for cash and save up again and buy a rental or buy tools for your business or buy stocks then but keep your day to day expenses low and do not use debt to cover them. A car is a day to day expense. Furniture is a day to day necessity. Ect.
Try your best not to borrow to live.
I am like Ramsey in that I despise car debt and other living expense debt.
Home mortgages the exception.
Finance being the study of risk and money (some will say time and money but in reality time is risk and to think of it as risk is a smarter thing I believe) many do not put enough emphasis on risk. Losing a job--what is that risk? Can you get another quick enough? ect.
Keeping living cost low and remaining debt free dramatically reduces risk. Peace of mind cannot be entered into an old TI85.
Save to be in business for yourself, to be financially independent, or to quit working.
People talk of opportunity cost of car loans. That is silly. A $35000 loan is a loan whether it is 0 interest or 50% interest and consumes your borrowing power. Buy a cheaper car for cash and save up again and buy a rental or buy tools for your business or buy stocks then but keep your day to day expenses low and do not use debt to cover them. A car is a day to day expense. Furniture is a day to day necessity. Ect.
Try your best not to borrow to live.
Posted on 8/9/18 at 6:29 pm to slackster
Accounting 101 should be part of the core curriculum in every college. Finance 101 too.
I bet you less that 20% of posters on TD can tell the difference between an income statement and a balance sheet nor can the tell what the present value of a stream of income is.
I am amazed at how financially illiterate doctors, teachers and most lawyers are.
I bet you less that 20% of posters on TD can tell the difference between an income statement and a balance sheet nor can the tell what the present value of a stream of income is.
I am amazed at how financially illiterate doctors, teachers and most lawyers are.
Posted on 8/9/18 at 10:10 pm to I B Freeman
doctors are the damn worst
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