Dave Ramsey - what do people think?

[ganner918]

That mindset is hard to break as well. Know lots of older folks who have tons saved up but still are penny pinching, won’t eat out, won’t travel because it costs too much, die with millions in the bank. What’s the point?

Right - there has to be a balance between spending recklessly to the point of not preparing for old age and retirement, and being so tightfisted you never enjoy what you have. Dave Ramsey can give some good advice for people who are in the former group and have no financial discipline and no idea what they're doing to get them on track. If you have some discipline and some knowledge, no need to strictly follow all his rules. He's the equivalent of advising an alcoholic to quit completely because they can't manage drinking moderately.

 

[ukcatz12]

I know Dave Ramsey does not like debt, but not all debt is bad. There are people who have 30 year mortgages at 3% interest rates they got locked in a couple years ago. That is good debt because it is super cheap. This is the stuff Dave Ramsey doesn't seem to talk to about.

I wish more people realized debt is a tool that can be used properly to make money. I refinanced my house during Covid at 2.5% and I'm kicking myself I didn't take out some equity when I did it. An extra $100,000 of debt at 2.5% is free money when inflation was what it was and savings accounts are paying like 4.5% right now.

 

[ukcatz12]

Dave Ramsey is also kind of an asshole and has allegedly fired people for being pregnant and not married, for being gay, and has told people working for him they couldn't wear masks during Covid.

 

[vhcat70]

Dave Ramsey is also kind of an asshole and has allegedly fired people for being pregnant and not married,

I wonder how many of those were guys.

 

[vhcat70]

Talk about some good debt - a Citi credit card:

https://creditcards.chase.com/cash-back-credit-cards/freedom/unlimited/test

• Zero interest for 15 months. So charge the h out of stuff on it, make min. payment, invest the money you will ultimately need to payoff in a high paying money market.
• No fee
• 1.5% back on everything
• $200 after charging $500 in first three months
• 5% back on groceries & gas ex Target & WalMart in first 12 months up to $12,000
• - earn “points” to buy stuff. A point is worth? 1 cent?
• Stop using after 15 months.

 

[Hank Camacho]

Dave Ramsey is also kind of an asshole and has allegedly fired people for being pregnant and not married, for being gay, and has told people working for him they couldn't wear masks during Covid.

Sounds like a great American.

 

[Ron Mehico]

Dave Ramsey is also kind of an asshole and has allegedly fired people for being pregnant and not married, for being gay, and has told people working for him they couldn't wear masks during Covid.

That would be illegal so I feel like that’s probably not true?

 

[BigBlueDave]

That would be illegal so I feel like that’s probably not true?

sources say

 

[ukcatz12]

That would be illegal so I feel like that’s probably not true?

He’s faced very public lawsuits about each one of those issues. I don’t know how they turned out, that’s why I said allegedly. He’s also facing a $150 million lawsuit for pushing a shady timeshare exit company on his show.

There’s enough smoke around him for me to be comfortable not liking him. I think he takes advantage of a vulnerable people to enrich himself. I don’t think he respects his audience at all and really comes off as an arrogant asshole.

 

[BankerCat12]

If you want to be wealthy don’t listen to Dave Ramsey. You have to take risks to build wealth and along the way you have to take advantage of the chapter laws then do it. That’s one of the things that makes América the superpower it is. If you wanna live like a bean counter and have no life enjoyment by all means listen to the guy who would rather you live in a cardboard box than take out an FHA mortgage and pay pmi for a year or two.

Dave ramsey is for people who don’t think

FHA is a horrible product. The PMI does not fall off and you pay a funding fee when refinancing or selling. This is also the Paddock. No one uses FHA, maybe except you.

 

[Girthang]

I know Dave Ramsey does not like debt, but not all debt is bad. There are people who have 30 year mortgages at 3% interest rates they got locked in a couple years ago. That is good debt because it is super cheap. This is the stuff Dave Ramsey doesn't seem to talk to about.

Dave's mindset suits a certain group of people. It's kind of baby steps for those with no understanding of how financial stuff works, but it's damaging when implemented to the extreme.

The fact is that this country would've had ZERO innovation and GDP growth if everyone had his financial mindset.

Invention, success, and continued success sometimes requires risk and leveraging of assets. It seems he ignores or criticizes that type of thinking, and his membership does the same, at least until they know better.

 

[Girthang]

FHA is a horrible product. The PMI does not fall off and you pay a funding fee when refinancing or selling. This is also the Paddock. No one uses FHA, maybe except you.

Yep. Unless it's a rehab loan used by a savvy investor, all of their products take advantage of those without the knowledge or patience to get a better loan product for less cost, and/or that are desperate to make a move into ownership.

 

[Rockford]

If you can start your adult life with a boatload of money, Dave’s principles will work great for you.

If not, you will have some debt and will have to be smart about it.

I blame my parents for my not being rich… they weren’t, so I wasn’t.

My Old Pappy always told me:
“A man never made a million dollars honest"

“You never get rich working for somebody else”. (He worked at a plant, I became a teacher)

“It takes money to make money and I could never afford it"

He grew up dirt poor up on a thrown away, very rural farm, during the depression, so he didn’t believe in taking on much debt….. so we always lived in cheap housing, mostly a trailer (used) and while we had everything we needed (not everything we wanted) we always bought the very cheapest of everything. I knew no different.

After I was married, and using a 25 cents Bic razor, my wife bought me a decent shaving kit for my birthday…..

My reaction: “What is this voodoo!?!?” I was amazed.

I’ve struggled with being a cheap ass by entire life.

 

[MegaBlue05]

Dave Ramsey is also kind of an asshole and has allegedly fired people for being pregnant and not married, for being gay, and has told people working for him they couldn't wear masks during Covid.

If true, this jives heavily with the “pay the church first” thing.

The mask thing, whatever. Caring so much about what other people do in their private lives is creepy and weird to me.

 

[etowncatfan]

If you can start your adult life with a boatload of money, Dave’s principles will work great for you.

If not, you will have some debt and will have to be smart about it.

I blame my parents for my not being rich… they weren’t, so I wasn’t.

My Old Pappy always told me:
“A man never made a million dollars honest"

“You never get rich working for somebody else”. (He worked at a plant, I became a teacher)

“It takes money to make money and I could never afford it"

He grew up dirt poor up on a thrown away, very rural farm, during the depression, so he didn’t believe in taking on much debt….. so we always lived in cheap housing, mostly a trailer (used) and while we had everything we needed (not everything we wanted) we always bought the very cheapest of everything. I knew no different.

After I was married, and using a 25 cents Bic razor, my wife bought me a decent shaving kit for my birthday…..

My reaction: “What is this voodoo!?!?” I was amazed.

I’ve struggled with being a cheap ass by entire life.

Your Pappy was wrong. Many Honest people have made a million dollars. I am One. many people have made a million dollars working for someone else. I did for 45 years before I retired. He is right to a degree that it takes money(risk) to make money. Look around. Don't get upset at those that have become wealthy because they took a risk and succeeded. Many took the risk and also failed. My advice is Dave Ramsey is good for Most People. Simple basic money management.

 

[ukcatz12]

If true, this jives heavily with the “pay the church first” thing.

The mask thing, whatever. Caring so much about what other people do in their private lives is creepy and weird to me.

If he didn't want to wear a mask that's his own decision. Like you said, whatever. My issue is he forbade others to wear them. If someone feels safer or more comfortable wearing a mask at a big group gathering that's their own decision. Ramsey can disagree all he wants, but don't tell others what they can and can't do. It's harming no one if your caterer wears a face mask.

 

[BigBlueDave]

don't tell others what they can and can't do.

It's an absolute lock that you were a mask enforcer and lost patience with those not taking the vax.



Yeppers.

That's why people were upset at others for not doing the bare minimum, like wearing a mask. This was a societal problem that could have been confronted head on as a unified group of people, but instead people threw fits about their personal freedom to go to Applebees.

 

[gamecockcat]

Just saw a YT video where it's claimed that someone asked Dave Ramsey if he could borrow a billion dollars, interest free, would he do it? The individual on the video said Ramsey said he wouldn't because it was a ridiculous amount of debt. If true (and I haven't taken the time to confirm), Ramsey is an idiot. With T-bills paying >5% right now, why wouldn't you do that?

I've been a CFP for 30 years and less and less of DR's philosophy makes sense to me. Obviously, live within your means, do not carry CC debt, save for emergencies and retirement - but those aren't only DR's philosophy. Pretty much every financial advisor would tell you those things. Many of his other thoughts are too dogmatic and fly in the face of what 99% of CFPs would normally recommend (such as 8% withdrawal rate on retirement funds, just to name one egregious example of his idiocy on some topics).

 

[MegaBlue05]

If he didn't want to wear a mask that's his own decision. Like you said, whatever. My issue is he forbade others to wear them. If someone feels safer or more comfortable wearing a mask at a big group gathering that's their own decision. Ramsey can disagree all he wants, but don't tell others what they can and can't do. It's harming no one if your caterer wears a face mask.

Don’t get me started on the people who comment on other people wearing masks. My FIL passed away in June of last year. In 2022 he underwent chemo and radiation for Stage III throat cancer. Wife and I used to take him for morning chemo once a week and afternoon radiation every weekday for 6 weeks. Masks were required in the facilities and suggested for caretakers who would be around the patient at any time.

We would usually stop to eat lunch in between appointments. We got chastised by some redneck in a Wendy’s for wearing masks.

FIL dropped his mask and said, “I just came from chemo and am on my way to radiation. I have bigger issues to worry about than your opinion of me wearing a mask or my daughter and son in law wearing one of out concern for me.” Dude didn’t say another word.

Mind your own damn business is the lesson to be learned.

 

[trueblujr2]

From what I’ve seen - which is not much - he seems to be good for people that are bad with money. I did have a buddy that followed him and got obsessed with his student debt and was making his kids eat cereal and shit for dinner for like 3 years until he paid it off which I thought was pretty extreme.

Took the beans and rice, rice and beans mantra literally I take it? Dave Ramsey is good if you have the discipline to follow his program. The intent is not to live on his program forever, but to eliminate debt and live a debt free life by self funding everything. But again, that takes discipline in a want, want want society where everybody expects instant gratification and has to keep up with their neighbors. His line is "Live like no one else so later you can live like no one else." basically short term pain for long term gain. IF it means sacrificing things for a few years to reach that point, then for many it's worth it.

 

[trueblujr2]

Brilliant at communicating the basics, which many fail to grasp, and his plans do work. However, his one size fits all doesn't apply at times, such as his car payment rules.

His car payment rule is basically "Don't have one." what's wrong with that? He talks about not having vehicles whose VALUE equal more than a certain percentage of your take home pay or net worth, or one of those values (i don't recall which), because they are something that decreases in value the longer you own it. But in general he wants people paying cash for cars.

 

[trueblujr2]

If you look at him as a behavioral psychologist for people who are shitty with money, he’s fine.

If you’re comfortable with the concept of leverage he sounds like a clown.

I think you touched on his target audience. He's basically the former, but hopefully those are the people he gets to a point where they can do the latter without worry or fear for their financial future.

 

[trueblujr2]

I know Dave Ramsey does not like debt, but not all debt is bad. There are people who have 30 year mortgages at 3% interest rates they got locked in a couple years ago. That is good debt because it is super cheap. This is the stuff Dave Ramsey doesn't seem to talk to about.

30 year debt at 3% is better than zero debt at zero percent? Help me with that math?

And yeah i've listened to DR and I've followed some of his principles at times, but I do still have a car payment and one of these 30 year mortgages at 3.25% you talk about. But I would MUCH rather that mortgage and car payment going into an investment or high yield savings where it's EARNING me money instead of costing me money.

 

[trueblujr2]

Harry and Marv visit his home at Christmas.

He doesn't pretend like he's poor, in fact he brags about his wealth and how he used the principles he teaches to get there. I'd rather take that advice from someone who's successfully fulfilled those goals.

 

[trueblujr2]

He has decent advice. I used some of it in my youth after doing dumb shit with credit cards.

Some of his advice is a little extreme. I will
eat beans and rice a couple nights a week, but am not eating it daily. What’s the point of living if you don’t enjoy life?

The main thing is to not spend more than you make and to never fully finance a major purchase.

I know when I was starting out in my career, if I saved like Ramsey suggested, I wouldn’t have had any money to pay utilities because all my money would’ve been in savings. It’s hard to save money when you barely make enough to cover housing, utilities and a little bit of food. When there’s nothing extra, saving was impossible. I had several years where I had about 46 cents in n checking when the next check hit and that included no indulgences.

Luckily, my parents were supreme tight asses and they passed that trait on to me. Unfortunately, I married a spender from a family that was terrible with money. If she had some money, it was almost like a race to see how fast she could spend it.

It took her years of listening to me bitching for her to quit that “retail therapy” BS women often do.

When he says "Beans and Rice, Rice and Beans" it's simply a metaphor for eating on a budget, don't eat out, use coupons, budget your food dollars, don't be buying $20 steaks on the reg. He doesn't mean to literally eat Rice and Beans with every meal.

 

[trueblujr2]

I used to sell lamp shades to a guy who sold lamps to one of the rent to own chains. He said they made the customer pay first and last payment up front. That covered the cost of the lamp. Any payment the customer made after that went toward profit.

You have to be pretty hard up to rent a lamp. Big ticket Items, appliances, large furnitre, etc. I can understand if your somewhat transient and only going to live somewhere for a relatively short period, but a lamp?

 

[trueblujr2]

Because she lived it. I saw some of those ration books my Mawmaw had. That was TRUE rice and beans. We could all learn a thing or two from our older folks who lived through it. I don't think Dave actually wants you to eat rice and beans. Just moreso being frugal and eat at home. He even tells you to budget for eating out if that's what you like to do. Nothing wrong with that. Just budget it in. The problem is, the majority charge those restaurant meals at at least 20%. It's nice if you can pay it off every month. The stats say that not many do though.

This, and like I said, I've listened to him and agree with a lot of what he says, but still have certain debts. When it comes to credit cards, I do have a few, but I do not pay interest on any of them. I do occasionally use the X month's Zero Interest deals on my home depot or Lowes cards, just replaced flooring in my house with an 18 month zero interest deal. so yeah, I have some CC debts, but they are zero interest and I pay them in the allotted time to avoid the accrued interest hit. I know that goes against what he says, but I am better disciplined to handle.

 

[berniecarbo]

You have to be pretty hard up to rent a lamp. Big ticket Items, appliances, large furnitre, etc. I can understand if your somewhat transient and only going to live somewhere for a relatively short period, but a lamp?

They probably sold them as a set with some furniture. Just guessing though. A lamp dealer owed me some money and couldn't pay, so I took some lamps instead and sold them direct to a rent to own place in Nashville. (I usually deal with a middle man). That is how he was going to sell them.

 

[gamecockcat]

30 year debt at 3% is better than zero debt at zero percent? Help me with that math?

Yes, in some cases, it is better. Banks make a lot of money off of the 'keep the spread' difference. They pay interest at 4% and loan money at 7%, thus keeping 3%. If a person borrows $300k at 3% for a home purchase instead of liquidating $300k of assets AND the assets grow faster than 3%, then the individual would be using the OPM (Other People's Money) principal to make >3% and keeping the difference. Does that help you with the math? It's not for everyone as there is peace of mind to factor in, not having a mortgage payment makes some people feel very good about themselves, in today's environment (6+% mortgage rates), it's not as simple. But, a couple of years ago at 3%? Kind of a no-brainer. For instance, if you had $300k in the S&P 500 index in 2023, you'd have made about $50k while paying $9k in interest. Seems like that's a pretty good deal. Of course, the market doesn't always go up (see: 2022) but, over the course of a 20- or 30-year mortgage, if the interest rate is low enough, you're a heavy, heavy favorite to have more money having the mortgage than not.

Also, some people get to deduct mortgage interest, thus making the 'net' cost of borrowing even lower. Finally, having a home paid off is great. But, only if you have enough other assets to support your lifestyle. You can't take home equity to the grocery store. If you use home equity to buy a car, pay for college, take a great vacation, you are, in essence, putting a mortgage on the house.

 

[Chase4UK]

Just saw a YT video where it's claimed that someone asked Dave Ramsey if he could borrow a billion dollars, interest free, would he do it? The individual on the video said Ramsey said he wouldn't because it was a ridiculous amount of debt. If true (and I haven't taken the time to confirm), Ramsey is an idiot. With T-bills paying >5% right now, why wouldn't you do that?

I've been a CFP for 30 years and less and less of DR's philosophy makes sense to me. Obviously, live within your means, do not carry CC debt, save for emergencies and retirement - but those aren't only DR's philosophy. Pretty much every financial advisor would tell you those things. Many of his other thoughts are too dogmatic and fly in the face of what 99% of CFPs would normally recommend (such as 8% withdrawal rate on retirement funds, just to name one egregious example of his idiocy on some topics).

As another CFP for 30 years, I approve of this message.

 

[gobigblue812]

I used Dave to get out of debt, pay off credit cards and buy my first house. He gives really good advice but he does take it a bit too far sometimes. I do buy used cars, pay them off and drive them as long as they last. I always pay extra on my car and mortgage each month. I don't carry any other debt. I do have a CC that I use for miles but I pay it off every month.

He's great for newbies. I follow many of his principles today but not to the extreme.

 

[Burger-n-Shake]

Harry and Marv visit his home at Christmas.

He sold that last year. I live nearby but not in that neighborhood. Yes he had no mortgage.

 

[phunterd]

I’m fairly ambivalent on Dave Ramsey. But it would be interesting to know the net worth of the posters that are trashing him.

 

[AustinTXCat]

Heh

 

[nerdcat]

Not a fan, but definitely a little jealous that I didn’t realize before he did how to make money telling people simple stuff. Never heard him say anything with ant level of complexity, yet people continue to pay him money. He’s very condescending and mean-spirited. Not much of a Christian attitude.

 

[CaptainBoogerBuns]

Heh

View embedded media

He should clone himself and pop out of all kinds of stuff

 

[cat_in_the_hat]

30 year debt at 3% is better than zero debt at zero percent? Help me with that math?

And yeah i've listened to DR and I've followed some of his principles at times, but I do still have a car payment and one of these 30 year mortgages at 3.25% you talk about. But I would MUCH rather that mortgage and car payment going into an investment or high yield savings where it's EARNING me money instead of costing me money.

Because of opportunity costs. If you pay off a 30 mortgage at 3.25%, there is an opportunity cost associated with the transaction. In other words, what could you have done with that money had you not paid off the mortgage. If you had invested that money instead, you could have earned more than the 3.25% you were paying in interest. So by investing instead of paying the mortgage off, you could have had more money at the end of 30 years than you had by paying it off. He often ignores opportunity cost from the little I have listened to him.

 

[Larry Skaggs]

I started listening to Dave in the mid 90’s when I lived in Nashville.
We are debt free with two paid off houses.
I buy used cars and pay cash.
His advice worked for us

 

[cat_in_the_hat]

I started listening to Dave in the mid 90’s when I lived in Nashville.
We are debt free with two paid off houses.
I buy used cars and pay cash.
His advice worked for us

That's great. That is something to be proud of.

My biggest complaint in the times I've listened to him is he ignores opportunity costs. You have paid off two houses and pay cash for cars. If you could have financed those assets at a lower rate than what you could have earned on the money you used to pay off those assets, you would have more money/net worth today than what you have now. For example, my current home financing rate is 2.25%. I can earn more than 2.25% investing that money. So by financing at a low rate I can use money I would have used to pay off the house to make additional money. My car loan is at zero percent, so anything I earn on the money I would have used to pay cash for the car is profit. If you can't finance at a lower rate than what you can earn by investing the money, then you are better off paying off debt than investing. If used correctly, financing is a good tool to build wealth.

 

[PTI (pti)]

The real story about Dave Ramsey is how desperately the world *needs* a Dave Ramsey, and that's a shame. I mean, here's his philosophy.....

- live on less than you make
- don't use debt
- save > 10% of your income


Magic! I lucked out and was taught this at a very young age by my parents, but most people don't have a clue. The fact that a guy can become filthy rich teaching people common sense is really somethin'. So yes, if you live by these principles, OF COURSE you're going to win financially. It's not that hard.