Dave Ramsey Financial Advice

[Bobber]

For those of your who've never heard of him, here's a link to his website: Dave Ramsey Homepage - daveramsey.com He's on WHO most evening during the week

I love the advice he gives people and agree with nearly 100% of what he says. Some of the more interesting parts of the call in show are just listening to some of the weird financial situations people have put themselves into.

You can learn a lot that will help you if you listen to this guy for a while.:yes:

 

[ISUFAN80]

For those of your who've never heard of him, here's a link to his website: Dave Ramsey Homepage - daveramsey.com He's on WHO most evening during the week

I love the advice he gives people and agree with nearly 100% of what he says. Some of the more interesting parts of the call in show are just listening to some of the weird financial situations people have put themselves into.

You can learn a lot that will help you if you listen to this guy for a while.:yes:

I listen to him while on the road on my i heart radio app on my phone. Solid advice for people who are in debt and want to get out of debt quickly and stay out of debt. Me and my wife got out of debt except our house last year. Best move we ever made. I never bought any of his stuff but you really can learn a lot just listening to him on the radio.

 

[scottie33]

I listen to him while on the road on my i heart radio app on my phone. Solid advice for people who are in debt and want to get out of debt quickly and stay out of debt. Me and my wife got out of debt except our house last year. Best move we ever made. I never bought any of his stuff but you really can learn a lot just listening to him on the radio.

The wife and I did Dave Ramsey last year and have paid off nearly $25,000 in debt...student loans, credit cards, both cars...and now down to our only debt is house and student loans.

We set budgets monthly and take out that in cash and only use cash for purchases....we use our debit cards 10 times a month.

Its a great and different way to look at financials differently instead of having debt your whole life.

We will have paid off over $115k in student loan debt combined in the next 3 years.

 

[CyCrazy]

I listen to Dave every once in awhile he knows his ****. I should take his advice :smile:.

 

[SpokaneCY]

The wife and I did Dave Ramsey last year and have paid off nearly $25,000 in debt...student loans, credit cards, both cars...and now down to our only debt is house and student loans.

We set budgets monthly and take out that in cash and only use cash for purchases....we use our debit cards 10 times a month.

Its a great and different way to look at financials differently instead of having debt your whole life.

We will have paid off over $115k in student loan debt combined in the next 3 years.

Similar story -- we bought the original Financial Peace book and while the entire book is great, we only adopted the debt snowball idea. But still very powerful and we knocked out all our non-mortgage debt quicker than I could have hoped.

Funny think about him is he lost all his money at least once but it seems most self-help guys have to make some horrific mistakes to make their millions of dollars.

 

[dmclone]

I think it's hard to fault Dave Ramsey. The only thing I would add is that at a certain point when you're out of debt and making good money there are a lot of other things that people should learn. Just as an example, smart ways to save for retirement. I know that Ramsey talks about it but I think there is a lot more to know than "baby step *". Maybe his financial advisers teach this but I rarely hear those type questions on his radio show.

 

[CapnCy]

Yeah, love Dave. Tells it like it is and most of his advice is super simple.

I'd recommend his Total Money Makeover book...lots of financial myths and realities in a very easy to read format.

 

[Dopey]

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.

 

[CapnCy]

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 Dave would even acknowledge that your model is true, but the folks who really are in it deep need that emotional tie to getting the snowball going, if you will.

I love his radio program...podcast if you can't tune in...he basically will call people on things that so many of us just accept as "that's how it is." My favorite quote he always tells folks who are really in debt, the only restaurant you should be going in is one your working in.

 

[cowgirl836]

@Dopey, I think it's just giving people that quick rush of accomplishment. Sure, the higher interest debt might take longer to pay off, but if you can get something paid off quickly, you will have progress right there in front of you. It's to give those who are struggling with debt hope that they can get through it. You're right that it may not make mathematical sense 100% of the time, but that mental relief can be a huge motivator.

I haven't followed Dave Ramsey much myself, but one of my newly married friend mentions him on fb and seems to be following his advice. I probably do too, subconsciously. I hate debt and want as little as possible and to pay what I have as fast as possible. We live way below our means and save for the future. I'm terrified of being broke, so that probably helps.

 

[Chipper]

I've been fortunate enough to have been asked to coordinate FPU classes. Going through it as a student was definitely behavioral changing.

Not sure how long we would have had our debt and student loan hang over our heads. I guess we would have been just normal and waiting to stumble out of debt.

The principles are simple enough - yet the nation does not live by them.

It is great watching couples, singles and families come in on the verge breaking and come out with hope, progress and a direction.

Dave will be at the (former) Civic Center in April for those that might want to check it out.

 

[twojman]

I think it's hard to fault Dave Ramsey. The only thing I would add is that at a certain point when you're out of debt and making good money there are a lot of other things that people should learn. Just as an example, smart ways to save for retirement. I know that Ramsey talks about it but I think there is a lot more to know than "baby step *". Maybe his financial advisers teach this but I rarely hear those type questions on his radio show.

After debt is paid off (except mortgage) you are to put 15% of your income aside for retirement.

 

[twojman]

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.

The fund he is talking about is AIVSX which I have through my Edward Jones representative. The 12% return is the average annual return for the fund. There are a lot of dividends reinvested in the fund. Would I expect that to continue? Nope. I am only in it because of rolling my 401(k) in about 2003. The value has gone up since then, probably about 20% or so. The US Stock market has been on one of the biggest bull runs in human history going back to the late 1930's and early 1940's essentially.

 

[cyclonestate]

Mr. Ramsey has declared bankruptcy.....twice. Kind of like Dr. Laura giving out marital advice.

That said, Ramsey does have good advice for folks who are trying to climb out of debt. He should certainly know.

 

[kilgore_trout]

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.

The fund he is talking about is AIVSX which I have through my Edward Jones representative. The 12% return is the average annual return for the fund. There are a lot of dividends reinvested in the fund. Would I expect that to continue? Nope. I am only in it because of rolling my 401(k) in about 2003. The value has gone up since then, probably about 20% or so. The US Stock market has been on one of the biggest bull runs in human history going back to the late 1930's and early 1940's essentially.

 

[Bobber]

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.

 

[Bobber]

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.

 

[Rabbuk]

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

 

[cowgirl836]

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.

 

[alarson]

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.