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1ke
Guest
Texas A&M = Amazing U
Best school out there, and St Mary’s is busy producing faithful Catholics and vocations.
(but of course I am biased. Gig 'em)
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Best school out there, and St Mary’s is busy producing faithful Catholics and vocations.
(but of course I am biased. Gig 'em)
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PaulinVA
Guest
Library books are not free. Your tax dollars bought his book for the library. Advertisers pay for commercials.
Dave Ramsey has a net worth of $55 Million. Good for him. But, he made it by giving advise to people on how to not make frivolous purchases and how to stay out of debt. I think that’s ironic.
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PaulGH
Guest
For what it’s worth, my wife and I have followed Dave Ramsey’s plan to a large extent, and we have done so without ever needing to buy one of his books or attend one of his classes. We just listened to his radio show, which technically is free to listen to (though I realize that the more people who listen, the more he can charge for advertising).
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Xantippe
Guest
Yep.
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whatsmyname
Guest
I think you didn’t read my post very carefully. Many of those people would fall under the category of, “If you are not able to take care of yourself, that is another story,” wouldn’t they?
Unlike you, I know plenty of people who have very large homes financed more than 100%, every one of the newest electronic gadgets available all paid for with credit, lavish vacations paid for with credit, vast amounts of the latest style of clothing paid for with credit cards, and the latest model of luxury automobile leased or paid for with credit. They’re just able to make all those payments each month if they keep opening new credit cards, refinancing property and shuffling the debt around. They’re one job loss/reduction in hours, divorce or illness away from serious trouble. Those are the people I’m talking about, and they’re the type of person Dave Ramsey was in the past. I live in a “rich” neighborhood and my closest friends and associates have always been “rich” so I know the tightrope of near poverty many of them walk. I’ve seen friends at homeless shelters who used to have all of those things. And yes, I think they need to take some responsibility for getting themselves in that position even while I help feed and house them.
It is my understanding that Dave Ramsey teaches not that we should despise these people, but that we should give our time and talents freely to help them. That is why “Charity” or “Charitable Giving” are the first line items on his Basic Quickie Budget, his Monthly Cash Flow Plan, his Allocated Spending Plan, and his Recommended Percentages worksheets.
Again, you don’t have to like DR. But it would be prudent to make some attempt to live within your means.
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Cat
Guest
I didn’t think he did.
Sure, it’s not right that people don’t work and get paid for it.
But it’s also not right to believe that they got that way by their own choice. Most people in the U.S. have opportunities throughout their lives to make choices that will set them on the path to prosperity. However, when a person has been “trained” all their life to make incorrect and unwise choices, it’s unlikely that they will recognize those opportunities when they present themselves.
I personally think that poverty has to be dealt with one-on-one, not through a government bureaucracy, but through families working with families and individuals working with individuals. JMO.
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DarkLight
Guest
Even this depends on why they’re not working. Someone who is willing to work and able to find reasonably paying work should not be paid for not working. Someone who is unable to work, or for whom work wouldn’t cover the expenses of working, or who simply cannot find employment, is a different story.
From what I’ve seen Ramsey’s plan seems like fairly common sense for people who have the money to pay their debt down and need help figuring out how to allocate it. It’s not going to do much for those of us who are fighting to make sure we have enough money to live. And sometimes he can come off as a bit obnoxious on this point - some of his followers most DEFINITELY do.
(As an aside, that’s something I’d really like to see - a program that teaches you how to minimize debt when you’re not in a position to pay it off. Picking loans, managing interest, getting better deals, that sort of thing.)
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NFPWife
Guest
I really like Dave Ramsey; I’ve been on the radio with Dave twice. (My DH has a disclaimer, I’ll throw that in at the end of the post.)
DH and I were out of debt (student loans and house) before I’d ever heard of Dave Ramsey. I had an auntie who taught me everything that Dave teaches. Then, I heard this guy on the radio who was saying all those same things and I was hooked. A big part of it was I didn’t really have peers who were living like me and it gave me a little boost. I also find him entertaining; I love the colloquialisms.
About the peers - one of my co-workers used to give me grief about my paid for car, a Ford Festiva; she refused to ride in it. (Fine by me, I’d rather ride than drive.) I’d give her the “living like no one else” line and she’d wave her hand at her never more than two years old, financed car and say, “THIS is living like no one else.” Sometimes I’d say something, other times I wouldn’t. It was all playful and in jest, but she just did not get it. She’d try to tell me I “deserve” X, Y, Z. Now, many years later, she’s still in debt and her long time BF cites it as a reason he won’t marry her. It would be completely uncharitable to re-visit those early conversations, but, boy have her chickens come home to roost. (I really feel for her and I’d help if she wanted/ would accept the support.)
DH and I were also debt free when I read “The Millionaire Next Door,” there’s a couple profiled in the book who sound exactly like DH and me.
I think ppl have a misconception that Dave is advocating austere, spartan living. He’s not. He’s encouraging ppl to “pay a price to win.” IMO, the higher the price you’re willing to pay, the faster you win. That goes for economizing as much as it does for self-improvement and career trajectory decisions. Listening to Dave has actually encouraged me to loosen up a bit with money in the past few years. His decision making question, “Would it make your Heavenly Father smile?” when considering a purchase led me to buying a purse I wouldn’t have typically given myself permission to buy.
DH’s disclaimer - DH agrees that Dave is great for debt reduction, encouragement at living below your means, and budgeting. He STRONGLY disagrees with Dave’s advice that you can withdraw 8% of your nest egg in retirement and never run out of money. (Most, if not all experts disagree with Dave on that.) The ROR, or risk of ruin, is too high. There are several scenarios I’ve seen where someone runs out of money in 15 years.
With that caveat, I think you can’t go wrong with Dave’s advice for building wealth. Once you have wealth, you need some more sophisticated advice, but that’s a good problem to have
DH and I were out of debt (student loans and house) before I’d ever heard of Dave Ramsey. I had an auntie who taught me everything that Dave teaches. Then, I heard this guy on the radio who was saying all those same things and I was hooked. A big part of it was I didn’t really have peers who were living like me and it gave me a little boost. I also find him entertaining; I love the colloquialisms.
About the peers - one of my co-workers used to give me grief about my paid for car, a Ford Festiva; she refused to ride in it. (Fine by me, I’d rather ride than drive.) I’d give her the “living like no one else” line and she’d wave her hand at her never more than two years old, financed car and say, “THIS is living like no one else.” Sometimes I’d say something, other times I wouldn’t. It was all playful and in jest, but she just did not get it. She’d try to tell me I “deserve” X, Y, Z. Now, many years later, she’s still in debt and her long time BF cites it as a reason he won’t marry her. It would be completely uncharitable to re-visit those early conversations, but, boy have her chickens come home to roost. (I really feel for her and I’d help if she wanted/ would accept the support.)
DH and I were also debt free when I read “The Millionaire Next Door,” there’s a couple profiled in the book who sound exactly like DH and me.
I think ppl have a misconception that Dave is advocating austere, spartan living. He’s not. He’s encouraging ppl to “pay a price to win.” IMO, the higher the price you’re willing to pay, the faster you win. That goes for economizing as much as it does for self-improvement and career trajectory decisions. Listening to Dave has actually encouraged me to loosen up a bit with money in the past few years. His decision making question, “Would it make your Heavenly Father smile?” when considering a purchase led me to buying a purse I wouldn’t have typically given myself permission to buy.
DH’s disclaimer - DH agrees that Dave is great for debt reduction, encouragement at living below your means, and budgeting. He STRONGLY disagrees with Dave’s advice that you can withdraw 8% of your nest egg in retirement and never run out of money. (Most, if not all experts disagree with Dave on that.) The ROR, or risk of ruin, is too high. There are several scenarios I’ve seen where someone runs out of money in 15 years.
With that caveat, I think you can’t go wrong with Dave’s advice for building wealth. Once you have wealth, you need some more sophisticated advice, but that’s a good problem to have
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noclevername
Guest
Dave Ramsey is good for some people but I don’t agree with all of his teachings.
First, my husband and I are debt free except for our mortgage. We are contributing extensively to our retirement funds and we have enough money in savings to live for a year if we both suddenly lost our jobs.
Here is what I don’t agree with DR about - We use credit cards. There is nothing wrong with using credit cards as long as you use them correctly. Actually, they offer protection. We use credit cards and we pay them off at the end of every month. We have not paid interest on those cards in years - if ever. And we get cash back from one of them. I recently booked a trip to the beach. It was right at $1000. I have the money in the bank to pay for the trip but I used my CC so I would be able to dispute if something were charged incorrectly. And yes, people will day that debit cards have the same protection but they really don’t. With a credit card, the company isn’t going to pull out a ton of money from my checking account and then I have to wait a few days for it to be put back in.
Also, DR says to stop funding retirement while getting out of debt. This is a really bad idea. Time is your friend for long term investments. If you stop funding retirement, you will lose all of that accumulation that will add up over the years. Also, if you have an employer match, you will lose that too. That can add up to a lot of money over the years.
So DR is good for folks who are just learning how to budget and who need to learn control over their spending.
But I have a problem with him calling everyone and everything he doesn’t agree with stupid and idiotic. That is not very professional.
Also, he says there are mutual funds out there you can invest in and earn a 12% - 15% return. Please let me know where I can find one of these magical mutual funds because I sure haven’t come across one and I have been looking.
First, my husband and I are debt free except for our mortgage. We are contributing extensively to our retirement funds and we have enough money in savings to live for a year if we both suddenly lost our jobs.
Here is what I don’t agree with DR about - We use credit cards. There is nothing wrong with using credit cards as long as you use them correctly. Actually, they offer protection. We use credit cards and we pay them off at the end of every month. We have not paid interest on those cards in years - if ever. And we get cash back from one of them. I recently booked a trip to the beach. It was right at $1000. I have the money in the bank to pay for the trip but I used my CC so I would be able to dispute if something were charged incorrectly. And yes, people will day that debit cards have the same protection but they really don’t. With a credit card, the company isn’t going to pull out a ton of money from my checking account and then I have to wait a few days for it to be put back in.
Also, DR says to stop funding retirement while getting out of debt. This is a really bad idea. Time is your friend for long term investments. If you stop funding retirement, you will lose all of that accumulation that will add up over the years. Also, if you have an employer match, you will lose that too. That can add up to a lot of money over the years.
So DR is good for folks who are just learning how to budget and who need to learn control over their spending.
But I have a problem with him calling everyone and everything he doesn’t agree with stupid and idiotic. That is not very professional.
Also, he says there are mutual funds out there you can invest in and earn a 12% - 15% return. Please let me know where I can find one of these magical mutual funds because I sure haven’t come across one and I have been looking.
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noclevername
Guest
Also, I meant to add on my last post. I too am involved in an expensive sport. I mountain bike. My bike alone costs over $3000. I have to maintain it, I have to spend gas money to get to trails to ride and train. But I don’t go into debt over the sport. It is an expensive sport. My shoes cost over $100. But I make sure I have the cash to pay for these things or I do without. I refuse to have the stress of debt just to participate in my sport.
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Xantippe
Guest
If it’s only 2 or 3 years of delaying retirement contributions, that’s not a big deal, particularly for younger earners.
There are a lot of people with 401(k)s (that they tap periodically when they get into a bind) and substantial credit card debt at high interest. That’s actually not uncommon for higher earners.
A lot of people have debt, no emergency savings, and then tap their 401(k)s whenever they need money. That’s one of the reasons why 401(k) balances have traditionally been so pathetically low. (A few years back, I think it was $65k at retirement.) People put the money, take the money out, put the money in, take the money out, and wonder why it never amounts to much.
That’s why following DR’s plan is safer for a lot of people: they pay off debt (which may be at 30%–way more than they’d get in retirement funds), they save an emergency fund, they save for retirement, they save for college, they pay off their house (in that order). If you do it like that, it means that the retirement fund is much safer from being raided to cover emergencies or college expenses.
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NFPWife
Guest
I agree with you on credit cards, both on using them responsibly and that debit cards don’t offer the same protections. I travel for business and I’ve been behind ppl trying to use debit cards to rent a car - there are times and locales where it simply cannot be done. It’s a huge hassle at the very least. Same for hotels. We have friends who had a major hold put on their debit card and automatic items were refused while they were on vacation. They went home to a huge mess.
We don’t pay interest, either. I have a lot of our utilities and routine expenses set up on the card and just send one payment once a month - and earn rewards. I have two business cards - one for my hotel chain, one airline. Both are set up to automatically withdraw the full balance on the due date from our savings account. My expense check is set up to direct deposit into the savings account. It’s a very automated process and the extra miles and perks add up.
On the mutual funds - we have funds that are exceeding 12-15% for the life of the fund. One fund is at a lifetime of 17%. The five year is 28.19%. Another has 14% for the 10 year and 22% for the five year. (The one year is 32.60%.) I just randomly clicked on some of our funds to get those numbers. I think you can find those funds, if you know how to look for them.
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tafan
Guest
DR’s excellent advice on getting out of debt greatly outweighs some of his less-than-perfect advice on investing. He is a great asset to our country!!!
As for getting out of debt before saving for retirement, I do not believe he is totally dogmatic about this, and in 90% of the cases (excluding home mortgages) he is spot on. Time is not on your side with investing if you are getting a rate of return less than the interest you are paying on an equivalent amount of debt.
As to credit cards, he is correct. I used to use credit cards the same way you do. They were great transaction vehicles, very convenient and didn’t cost me anything. But then I had to help a mentally ill family member get back on his feet financially and I say first hand the horrible business practices of the CC industry. DR is spot on. They are an immoral, lecherous, usurious industry. They have no hesitation to threaten blatantly illegal tactics with their collection procedures. They harass and intimidate people who they have been charging usurious rates to for years. I tore them all up. We should not support that industry at all, even if it is not costing us anything. Which, BTW, is not accurate anyway, they still make plenty of money off you via merchant fees, and those fees are built into the prices we all pay.
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PaulGH
Guest
Not all of Dave Ramsey’s investing advice is as solid as his advice on budgeting and getting out of debt, and this is a good example. If I recall correctly from listening to his radio show, he typically uses 12% as his hypothetical annual return on investments, when he calculates how retirement savings will grow over time. This rate is overly optimistic, in my opinion. Perhaps someone who makes a large initial investment in a retirement account at a time when the stock market is very low might see that type of annual return over their lifetime, but I don’t think that most people will.
His calculations also don’t take inflation into account, as far as I know. For example, even if you could get an average annual return of 12%, you have to subtract the average annual rate of inflation to get your real return. So if you make 12% per year, but inflation is 4% per year, then your real return is more like 8%.
For my own calculations, I prefer to err on the side of being too pessimistic rather than too optimistic, and I think that projecting a 12% annual return is on the optimistic side.
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PaulGH
Guest
This is why we don’t use credit cards, even if we used them for monthly expenses and paid them off every month. I don’t want to experience first-hand what would happen if we missed a monthly payment for whatever reason.
My wife and I have used Visa debit cards (as well as cash, checks, and Paypal) for many years now, and have never had a problem where we couldn’t use our cards to buy something. (We do have to call our bank in advance to pre-approve very large purchases, but that is a very rare occurrence and only a minor inconvenience.)
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DarkLight
Guest
The one thing with credit cards I’ve found is they can be useful for establishing credit history, and credit history can pop up in odd places. So if you can control what you do with the credit card I would say get one. At least for young adults like me who don’t have car payments or mortgage payments or other sorts of payments that normally show on credit history. It’s a lot more important if you’re renting, especially if you move around - they’ll run credit checks before you rent, as well as before determining your utility down payment, other such things.
You don’t even have to use the thing every month, or use it for very much. I put maybe a few dollars on it every month and pay it off.
You don’t even have to use the thing every month, or use it for very much. I put maybe a few dollars on it every month and pay it off.
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tafan
Guest
Another over stated benefit. Credit scores today are indeed used for lots of things they shouldn’t be, but one can survive without a credit history just fine. There are still many local/regional banks who do old-fashioned underwriting of loans for home mortgages. Pay your utility bills and phone bills on time and you will be fine.
Another thing the DR is spot on about: do not go into debt just for the sake of a credit score.
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UbiCaritas
Guest
We use our CCs similarly: put all bills on them, and then pay them off in full at the end of the month. To put it all into perspective, my DH and I went to Europe on a vacation last year, and got free (except for the usual fees) tickets to do so by cashing in our credit card airline miles. Furthermore, they help us maintain a good credit history.
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