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  1. #16
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    Re: Dave Ramsey Financial Advice

    Quote Originally Posted by Dopey View Post
    I've never read any of his books or taken any classes, but I'm glad he's helping people with their financials.

    However, I don't understand people's infatuation with the "debt snowball" idea. It just doesn't make mathematical sense sometimes. I know there's some "mental relief" of paying off the smallest balances, but one of the most important things to remember when dealing with investing and finances is to NOT get emotionally involved or attached to anything. Pay extra towards the highest interest debt and keep moving forward. This, of course, could be argued if the debt is tax deductible.

    I know this site has been linked before, but it's changed my investment philosophy, I think for the better.

    Bogleheads Investing Advice and Info

    They generally have decent things to say about Ramsey, but they always harp on how he claims to say that 12% annual returns can be expected. I understand the history of the S&P 500 is where he's pulling his number, but that's still a VERY aggressive planning number to expect. It took 80+ years for the S&P to develop that number. If you're planning and saving through 35 years of the roughest stretch of returns, you'd be hurting to expect a 12% return and most likely wouldn't hit your retirement goals.

    I think it's important to plan your annual savings for a much more conservative return over the course of your career. Especially considering one should be transitioning from a less aggressive portfolio as they age, so the potential returns would most likely diminish.
    Love Bogglehead's and I personally use that site a lot more than Ramsey(partially because the no debt thing was taught to me way before Ramsey came along)

    I think they appeal to different populations. Most of Ramsey's callers are people who are in poor financial shape and have too much debt, so it's hard for them to save. Ramsey's big thing is to get them to change those habits and hopefully that will result in more money for them to use the way Bogglehead people do.

    Bogglehead is more appealing to people who have more cash than Ramey's crowd.

    Those are broad generalizations and of course there are exceptions to the rule.



  2. #17
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    Re: Dave Ramsey Financial Advice

    Quote Originally Posted by kilgore_trout View Post
    aivsx has a 5.75% front end load. the yield net of fund expenses is 1.75%. plus edward jones fees.

    this is not a good investment.
    Yeah I think sometimes Dave is steering them to places that are some of his paid sponsors. He's good, but he's not perfect and he is a capitalist.

    You're correct. Lot of good alternatives.



  3. #18
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    Re: Dave Ramsey Financial Advice

    Live like a monk and pay more than the minimum payment on your debt. do you need a website to tell you that?



  4. #19
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    Re: Dave Ramsey Financial Advice

    Quote Originally Posted by Rabbuk View Post
    Live like a monk and pay more than the minimum payment on your debt. do you need a website to tell you that?

    sadly, a lot, lot, lot, lot, LOT of people do. Even more need to actually follow that advice.



  5. #20
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    Re: Dave Ramsey Financial Advice

    Quote Originally Posted by Dopey View Post
    I've never read any of his books or taken any classes, but I'm glad he's helping people with their financials.

    However, I don't understand people's infatuation with the "debt snowball" idea. It just doesn't make mathematical sense sometimes. I know there's some "mental relief" of paying off the smallest balances, but one of the most important things to remember when dealing with investing and finances is to NOT get emotionally involved or attached to anything. Pay extra towards the highest interest debt and keep moving forward. This, of course, could be argued if the debt is tax deductible.
    The thing with the debt snowball idea depends on what your debts are. If its several credit card lines, it makes sense, those tend to be higher interest anyways. You have a minimum payment to make no matter what, so get rid of smaller ones so you can pass that payment on to bigger ones. Makes some sense, provided you dont have a giant account out there with an ultra-high interest rate.

    Though yeah, sometimes that doesnt necessarily make the best solution, it all depends on the individual circumstances.

    As for getting emotionally involved, the problem is that with a lot of the people that ramsey deals with, getting them to funnel the feeling of success into paying more bills down is a positive thing. His advice isnt most targeted towards those who generally have a good handle on finances, his advice is most targeted to those who dont and have racked up a slew of different credit lines. Giving them some extra motivation through the tangible success of zeroing out a credit card bill helps propel them to the next success.



  6. #21
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    Re: Dave Ramsey Financial Advice

    I listen to his podcast daily and am currently reading through Total Money Makeover. His radio show is awesome. I'll be going to the live event in April.



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    Re: Dave Ramsey Financial Advice

    I think it says a lot about our society that someone who preaches basic financial responsibility is looked upon as some kind of guru.



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    Re: Dave Ramsey Financial Advice

    Quote Originally Posted by twojman View Post
    After debt is paid off (except mortgage) you are to put 15% of your income aside for retirement.
    That's great but does he provide information on how to invest, tax strategies, etc?



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    Re: Dave Ramsey Financial Advice

    Quote Originally Posted by Rabbuk View Post
    Live like a monk and pay more than the minimum payment on your debt. do you need a website to tell you that?
    Your life sounds pretty boring



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    Re: Dave Ramsey Financial Advice

    An honest question - how do people get into so much debt other than mortgage and school loans? And I don't mean "they spend more than they make" type of answer, but what do these people buy and where does their money go? I know so many coworkers and friends who are in debt yet they don't have fancy cars or fancy clothes and don't eat out any more than we do (which is several times per week). We have no debt other than 100K left on a mortgage and don't make more than these people yet they are always broke and paying off loans. I guess that's why I have never listened to Dave Ramsey or Suze Orman, I just pay myself first, pay my bills, and then spend what's left over - not save what's left over.



  11. #26
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    Re: Dave Ramsey Financial Advice

    Quote Originally Posted by mtowncyclone13 View Post
    An honest question - how do people get into so much debt other than mortgage and school loans? And I don't mean "they spend more than they make" type of answer, but what do these people buy and where does their money go? I know so many coworkers and friends who are in debt yet they don't have fancy cars or fancy clothes and don't eat out any more than we do (which is several times per week). We have no debt other than 100K left on a mortgage and don't make more than these people yet they are always broke and paying off loans. I guess that's why I have never listened to Dave Ramsey or Suze Orman, I just pay myself first, pay my bills, and then spend what's left over - not save what's left over.
    My guess is they just buy everything they have on credit card, or at some point bought on credit and started making payments at 18% or whatever and slowly dug a hole. Dont have to have a lot of fancy stuff to go into debt when everything you buy is on 18% interest.


    I LIEK CHOCOLATE MILK - The Partisan Bat

    Quote Originally Posted by ChrisMWilliams View Post
    Hmmm...I'm not a huge "weiner"
    Quote Originally Posted by Angie View Post
    "Yeah, Chris' weiner is a way bigger get than mine."

  12. #27
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    Re: Dave Ramsey Financial Advice

    Quote Originally Posted by mtowncyclone13 View Post
    An honest question - how do people get into so much debt other than mortgage and school loans? And I don't mean "they spend more than they make" type of answer, but what do these people buy and where does their money go? I know so many coworkers and friends who are in debt yet they don't have fancy cars or fancy clothes and don't eat out any more than we do (which is several times per week). We have no debt other than 100K left on a mortgage and don't make more than these people yet they are always broke and paying off loans. I guess that's why I have never listened to Dave Ramsey or Suze Orman, I just pay myself first, pay my bills, and then spend what's left over - not save what's left over.
    In a lot of cases what I see through my clients are:
    - Drugs
    - Alcohol
    - A bunch of store credit cards because they HAD to have that 55" TV and Best Buy didn't charge them anything to put it on the store credit card!
    - Crappy paying jobs in the first place
    - Cigarettes
    - Financing the full purchase price of a car at a ridiculous interest rate (just because it doesn't look fancy doesn't mean someone isn't getting bent over for it)
    - Gambling



  13. #28
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    Re: Dave Ramsey Financial Advice

    Quote Originally Posted by IcSyU View Post
    In a lot of cases what I see through my clients are:
    - Drugs
    - Alcohol
    - A bunch of store credit cards because they HAD to have that 55" TV and Best Buy didn't charge them anything to put it on the store credit card!
    - Crappy paying jobs in the first place
    - Cigarettes
    - Financing the full purchase price of a car at a ridiculous interest rate (just because it doesn't look fancy doesn't mean someone isn't getting bent over for it)
    - Gambling

    this is a lot of it, but to add some less "you're an idiot" causes
    - family trouble
    - unexpected job loss (still gotta pay the bills, even if it's on credit)
    - medical issues
    - acts of God - flood, fire, etc.


    and then to add to what IcSyU said, so many people don't seem to understand how credit works. It's not free money! I can still remember my aunt saying one time how her credit card raised her limit so now she could spend more. Now if that's the knowledge she's passing on to my cousins.......where are they going to learn financial responsibility? The same with student loans. I can't be the only one who knew people who spent their student loans on beer money instead of tuition or rent.

    Instead of having international perspectives/humanities (and the like) class requirements, ISU and other colleges should require a personal finance class.



  14. #29
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    Re: Dave Ramsey Financial Advice

    I used to listen to Dave, but the bible thumping got old.



  15. #30
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    Re: Dave Ramsey Financial Advice

    I think his advice for getting out of debt is good.

    I don't think his investing advice is anything special. His plan (I think) is to give money to an advisor who invests in loaded mutual funds and then expect a 12% annual return.

    The one mutual fund listed earlier in this thread has a 10 return of 6.01% after loads and fees. Not bad, but a long way from 12% and well below a lot of other options.



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