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re: Why I have changed my mind on Dave Ramsey
Posted on 8/9/18 at 10:18 pm to anc
Posted on 8/9/18 at 10:18 pm to anc
quote:people who say this dont understand Dave. If the debtor was smart at math he would have never gotten in crazy debt in the first place. Dave works on fixing behavior problems, not math problems.
the math says if you can get a car loan at 1.9%, you can
Another way to look at this is the casino. Looks at all those poor schmuks putting their money down on games that have heavy house advantages! If these people could do math, no one would place any bets. However, again, these are behavior problems, not math problems.
FTR, I agree with about 96% of what Dave has to say.
0
Posted on 8/9/18 at 10:28 pm to I B Freeman
quote:
Keeping living cost low and remaining debt free dramatically reduces risk. Peace of mind cannot be entered into an old TI85
Posted on 8/9/18 at 10:31 pm to KillTheGophers
I pulled as many 500 credit scores off of doctors and attorneys than any other employment field. Was constantly amazed at the amount of 30-day delinquencies there were littered all over their bureaus.
But when you have so much money available, many times they just think of their finances differently than even other wealthy people. Mortgage company collection department calls, they pay the two payments they’re down and then 4 more to not have to worry about it.
Car 60 days down by accident? They’d ask if they should just pay it off.
It was consistent too. Fabulous income streams often equated to careless credit. Wasn’t always the case to be sure. But...it was eye opening.
I think one of the things some of our esteemed posters here have done over time is forget. Their wealth and financial literacy has disconnected them from the financial reality that many people deal with. It fuels some of the scoffing at folks like Brother Dave.
There’s a lot of folks who need serious financial help...and basic financial literacy should be taught beginning in Junior High IMO. Especially with our newer Industrial Arts HS Track in Louisiana. Many of those fields lend themselves to self employment and a healthy income as a young adult...and being financially ignorant can derail your life if you aren’t careful at that age.
But when you have so much money available, many times they just think of their finances differently than even other wealthy people. Mortgage company collection department calls, they pay the two payments they’re down and then 4 more to not have to worry about it.
Car 60 days down by accident? They’d ask if they should just pay it off.
It was consistent too. Fabulous income streams often equated to careless credit. Wasn’t always the case to be sure. But...it was eye opening.
I think one of the things some of our esteemed posters here have done over time is forget. Their wealth and financial literacy has disconnected them from the financial reality that many people deal with. It fuels some of the scoffing at folks like Brother Dave.
There’s a lot of folks who need serious financial help...and basic financial literacy should be taught beginning in Junior High IMO. Especially with our newer Industrial Arts HS Track in Louisiana. Many of those fields lend themselves to self employment and a healthy income as a young adult...and being financially ignorant can derail your life if you aren’t careful at that age.
This post was edited on 8/9/18 at 10:37 pm
Posted on 8/9/18 at 10:44 pm to anc
quote:
They live in one of the best public school districts in the state, but both of them went to private school and feel like this is something they have to do.
Huge mistake. Both my wife and I went to private but realized it would be such a waste to not take advantage o a great public school system.
Posted on 8/10/18 at 4:49 am to anc
Dave Ramsey's strategy works, it just works. If you don't carry debt you are better off, period.
With that said, if you are smart with money, and don't carry a ton of debt that might get you in a bind, and can manage your money, you can use debt to your advantage. But that is more rare than anyone would ever want to admit.
With that said, if you are smart with money, and don't carry a ton of debt that might get you in a bind, and can manage your money, you can use debt to your advantage. But that is more rare than anyone would ever want to admit.
Posted on 8/10/18 at 6:12 am to anc
quote:
they have run up credit cards to the max.
serious question. how in the hell do people pay off these debts? at 20%-ish interest, it seems simply impossible to me
Posted on 8/10/18 at 10:32 am to greenwave
quote:
Yeah I don't agree with his no CC rule but the people he is trying to get out of debt wouldn't be able to handle that. Hes got to be strict with his program for it to work.
You have to figure out if you have financial cancer or obesity. If it's the former, you have to go through the painful surgery, chemo, radiation, follow up, etc., until you're cancer free.
If you're financially obese, you have to change your habits forever.
In both cases, however, you can binge and put the weight back on - and the cancer could come back.
Dave's program does sort of treat all financial crises as financial obesity. It absolutely will work for most Americans. If you're seeking a solution like Dave has to offer, you probably need it badly.
All the brilliant min/maxxers can laugh all they want - the program isn't for them ... until it is.
Posted on 8/10/18 at 10:40 am to anc
Dave put together a system that can work well for anybody and is a great program for most. It isn't designed for mathematical optimization, but rather accounts for real world habits/faults/downfalls/behaviors.
Posted on 8/10/18 at 10:40 am to SlowFlowPro
quote:
serious question. how in the hell do people pay off these debts? at 20%-ish interest, it seems simply impossible to me
If you aren't willing to pay more than the Min amt due, you don't need a CC. You owe $3500 and only paying the $95 min, good luck. Better be paying $250-$350 month. I've seen buddies charge Hotels, gas, dinners, vacations on CC and say they will pay it off on next bill..never do. I also did this early on in my life. If I charge on my CC that sucker is being paid in full the next month.
Posted on 8/10/18 at 11:00 am to bstew3006
quote:
If I charge on my CC that sucker is being paid in full the next month.
Most things we pay on a CC are paid off within 3 days of the charge. If you looked at my CC bill, you would see like 10-15 payments a month
Posted on 8/10/18 at 11:01 am to anc
Took his financial peace university "class" through my church right after i got married. I knew ahead of time his context was basic and tailored for the fiscally stupid.
While in the class, the overwhelming majority of those around us had multiple credit cards maxed, and were only paying minimum balances. none had college funds for kids or any emergency cash.
One couple in there had 7 lowes and homedepot credit cards they used to do a home improvement....
Most couldn't even do a simple budget. Dave's basic finances needs to be taught in High School, so the next generation doesn't start out in the hole.
Once you understand the simple cost of debt, you can then learn how to make money off your money. But most people need to know how to float first
While in the class, the overwhelming majority of those around us had multiple credit cards maxed, and were only paying minimum balances. none had college funds for kids or any emergency cash.
One couple in there had 7 lowes and homedepot credit cards they used to do a home improvement....
Most couldn't even do a simple budget. Dave's basic finances needs to be taught in High School, so the next generation doesn't start out in the hole.
Once you understand the simple cost of debt, you can then learn how to make money off your money. But most people need to know how to float first
This post was edited on 8/10/18 at 11:02 am
Posted on 8/10/18 at 11:04 am to tigeraddict
His system is effective at getting people from bad financial situations into decent ones. It is effective, maybe not necessarily efficient as it should be, but it is effective which is most important.
Once you've gotten into decent financial position, his system for growing wealth is mediocre at best and sometimes just flat dumb.
Once you've gotten into decent financial position, his system for growing wealth is mediocre at best and sometimes just flat dumb.
Posted on 8/10/18 at 11:38 am to LSUFanHouston
quote:
Most things we pay on a CC are paid off within 3 days of the charge. If you looked at my CC bill, you would see like 10-15 payments a month
Why not float it for the full 30 days?
Posted on 8/10/18 at 11:54 am to lynxcat
Interest paranoia
Posted on 8/10/18 at 11:57 am to GoCrazyAuburn
quote:
His system is effective at getting people from bad financial situations into decent ones. It is effective, maybe not necessarily efficient as it should be, but it is effective which is most important.
Once you've gotten into decent financial position, his system for growing wealth is mediocre at best and sometimes just flat dumb.
A lot of people disagree with him since he takes the smallest debt amount as a priority as opposed to the higher interest.
Unless you have some obscenely high unsecured personal loan or something then you really aren't going to get much more mileage out of optimizing with highest interest rate opposed to lowest debt.
His belief is that money is psychological and he's right
Posted on 8/10/18 at 12:04 pm to Powerman
I took his FPU course through my church and I think his advice is great on how to get out of debt. What I have come to strongly disagree with is the motto he preached constantly of "live like noone else so that you can oneday live like noone else". Basically live your life like a pauper so that you can have some fantasy retired life...well life isn't guaranteed to us and even if we live many years after retirement, our health certainly isn't guaranteed to allow us to enjoy all the fun things that we didn't do when we were younger because we were too busy eating peanut butter and jelly sandwiches and driving used mopeds to work. And time spent/memories made on vacations while the kids are young can't be replaced.
I know I am exaggerating to make a point, but his "wait until retirement cuz its going to be awesome" schtick doesn't sit well with me.
I know I am exaggerating to make a point, but his "wait until retirement cuz its going to be awesome" schtick doesn't sit well with me.
Posted on 8/10/18 at 12:06 pm to Powerman
I don't disagree, his method is very effective. Purely on a financial basis, it is not the most efficient way to do it. That doesn't mean it is inefficient, just not optimized I guess.
As I said, his method for getting out of debt is extremely effective, which frankly is all that matters.
As I said, his method for getting out of debt is extremely effective, which frankly is all that matters.
Posted on 8/10/18 at 12:31 pm to marinebioman
quote:
I took his FPU course through my church and I think his advice is great on how to get out of debt. What I have come to strongly disagree with is the motto he preached constantly of "live like noone else so that you can oneday live like noone else". Basically live your life like a pauper so that you can have some fantasy retired life...well life isn't guaranteed to us and even if we live many years after retirement, our health certainly isn't guaranteed to allow us to enjoy all the fun things that we didn't do when we were younger because we were too busy eating peanut butter and jelly sandwiches and driving used mopeds to work. And time spent/memories made on vacations while the kids are young can't be replaced.
I know I am exaggerating to make a point, but his "wait until retirement cuz its going to be awesome" schtick doesn't sit well with me.
I'm with you on all of that
Have to find some balance. My goal in life isn't to maximize my net worth. And anyone who has that goal is probably miserable no matter how rich they are.
Posted on 8/10/18 at 12:44 pm to Powerman
Balance is the key to everything. If I had just learned how not to be in debt when I was younger, I would have been able to put money away and save better. That is the key. Like has been said, teach the damage of having cc debt and the like and live life within your means. That fixes 98% of all issues before they start. As long as you are not doing dumb things live like you want as long as it is within your means. Period.
Posted on 8/10/18 at 2:44 pm to Powerman
Look let me tell as you get older you get to the point you want less crap not more. You don't want a 4000 square foot house and a two acre yard. You don't want a new car every two or three years or a new $1500 shot gun or a new boat ect. You want to get rid of crap. You want less to look after that you do not enjoy.
The things you want are different. You want to be secure and not be a burden on anybody. You want your kids and grandkids to live comfortable and stuff like that. You want to take care of elderly parents.
I happen to enjoy running my business and it is doing better now that ever. It is crazy--while I had a young family I had to live hand to mouth. Some months not even taking a pay check and things like that. My friends that went to school with me were making $100K working for somebody and bought big houses and drove nice cars. I don't know which is better--my austerity or their extravagance. My kids went to college without loans. I help other members of my family some. Now that I have fewer family obligations I have cash and don't want to spend it on anything. It is funny how things work out. (even when we were hand to mouth I never carried a CC balance or had a new car with a note. I didn't start buying new cars till I was 40 probably.)
If I want something I go buy it but it is rare that I want anything of significant expense.
I am glad I am not my age working to pay off a big house note or working to pay off a condo at the beach or working to keep the wife in a Mercedes or something. My experience has been that keeping those living expenses low and staying out of debt for living expenses but using debt wisely on business and things that appreciate is a good way to go.
The things you want are different. You want to be secure and not be a burden on anybody. You want your kids and grandkids to live comfortable and stuff like that. You want to take care of elderly parents.
I happen to enjoy running my business and it is doing better now that ever. It is crazy--while I had a young family I had to live hand to mouth. Some months not even taking a pay check and things like that. My friends that went to school with me were making $100K working for somebody and bought big houses and drove nice cars. I don't know which is better--my austerity or their extravagance. My kids went to college without loans. I help other members of my family some. Now that I have fewer family obligations I have cash and don't want to spend it on anything. It is funny how things work out. (even when we were hand to mouth I never carried a CC balance or had a new car with a note. I didn't start buying new cars till I was 40 probably.)
If I want something I go buy it but it is rare that I want anything of significant expense.
I am glad I am not my age working to pay off a big house note or working to pay off a condo at the beach or working to keep the wife in a Mercedes or something. My experience has been that keeping those living expenses low and staying out of debt for living expenses but using debt wisely on business and things that appreciate is a good way to go.
This post was edited on 8/10/18 at 2:47 pm
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