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Old 08-02-2011, 12:43 PM   #21
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This article from his site discusses the 12% claim.

The 12% Reality - daveramsey.com
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Old 08-02-2011, 01:42 PM   #22
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Quote:
Originally Posted by skyvue
This article from his site discusses the 12% claim.

The 12% Reality - daveramsey.com
I read the article, I was expecting it say, "By getting you out of 18% credit card debt and getting you into investments that lose 6%, you are making a 12% return on your money Seriously though, I have read a few of his books, even though I may already know must of it, it serves to reinforce my motivation to LBYM, which I need reminded of every now and then.
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Old 08-02-2011, 03:52 PM   #23
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I think you will get something you don't expect out of the class, and that is a closer understanding of you and your "spouse equivalent" ways of looking at money. To me, that is where Dave Ramsey's real value is. Learning to work together for shared goals is a key tenet of his courses.
I'm one of those that called his show when we paid off the house, too! But no, I've never taken his investment advice, either.
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Old 08-03-2011, 08:01 PM   #24
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I catch Dave on that radio from time to time when driving around town. I have heard him espouse "a good growth mutual fund," but do not recall him getting 12% on that fund. Of course 12% is pure nonsense in the current stock market.

I recently caught the Ray Lucia Show when actively surfing the high numbers assigned to my TW cable setup. He is on the aln channel. (Is there anything else there?) He seems to whip Dave and Suze as far as common sense advice goes. If he got a bit more public exposure, I can see him getting more tv time.
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Old 08-03-2011, 08:13 PM   #25
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I catch Dave on that radio from time to time when driving around town. I have heard him espouse "a good growth mutual fund," but do not recall him getting 12% on that fund. Of course 12% is pure nonsense in the current stock market.

I recently caught the Ray Lucia Show when actively surfing the high numbers assigned to my TW cable setup. He is on the aln channel. (Is there anything else there?) He seems to whip Dave and Suze as far as common sense advice goes. If he got a bit more exposure I can see him getting more exposure.
They're completely different philosophies and are great at what they do. Ramesy/Orman is great if you've got a debt problem or are a spendaholic. Lucia is great to follow for a distribution strategy. Bogle is great if you like being a DIY and don't have the time to follow investments, or don't have the discipline to follow a strategy. Lynch is great if you have time to follow your underlying investments, and have the discipline to stick to your strategy.

Different strokes...
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Old 08-03-2011, 08:21 PM   #26
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This article from his site discusses the 12% claim.

The 12% Reality - daveramsey.com
Interesting... I live in Nashville (where Dave's show originate's from) and met with the Endorsed Local Provider (ELP) he recommends and says he uses. There's about a 1.3% management fee plus the expense ratio's of the funds themselves (Dave recommends against individual stocks or bonds). So the market would have to return between 14 and 15%... I was not convinced and remain half Boglehead and manage my own portfolio, including some individual stock and bonds. Never have been able to average 12% though.
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Old 08-03-2011, 11:06 PM   #27
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I sometimes listen to sort of reinforce the debt free LBYM philosophy. Also I can't believe some of the messes people have gotten themselves into! It's truly amazing how much people are willing to borrow to have the newest vehicles, for example.
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Old 08-03-2011, 11:11 PM   #28
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Bogle is great if you like being a DIY and don't have the time to follow investments, or don't have the discipline to follow a strategy.
This is a strategy. And it does require a lot of discipline to follow. You only need to go back to threads here and at bogleheads in 2009 to see numerous posters bailing out, many returning too late or still out. Investing is simple, but not easy.

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Old 08-04-2011, 12:16 AM   #29
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"I'M DEBT FREE!!!!!"

In that regard, I like Dave Ramsey's advice. I love listening to him because the happiness his callers show is just so contagious (at least for me). Like them, I am debt free and very happy to be in that category.

Still, I think that expecting a 12% return on investments is just wacky. He should stick to personal finance and leave investment advice to others, IMO
I'm 100% debt free also and it feels great. If I was still working, I wouldn't dismiss the idea of a mortgage < 3% interest, however.

Ramsey (and Orman) both provide good advice for those who are irresponsible with their money. I agree that Ramsey should leave investments (and the occasional political jabs) alone and Orman should stop telling everyone to plan to work until they are 70!
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Old 08-04-2011, 07:03 AM   #30
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IMO...

Ramsey's message of LBYM is good. In that way he is preaching a good message. His advice to save and invest (in general) is good too. But he should probably stay away from specific investment advice.

The one criticism I would make is that he appears to use his personality (i.e., through his website) to refer people to specific financial advisers and financial service providers (sales). Advice to seek counsel from a qualified professional if needed is not quite the same as providing marketing referrals. I will have to look again to see if that referral service is used to generate revenue. There is nothing wrong with it... but I would be a bit skeptical of being referred to a financial service group (large or small) as a marketing lead.
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Old 08-04-2011, 08:14 AM   #31
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IMO...

Ramsey's message of LBYM is good. In that way he is preaching a good message. His advice to save and invest (in general) is good too. But he should probably stay away from specific investment advice.

The one criticism I would make is that he appears to use his personality (i.e., through his website) to refer people to specific financial advisers and financial service providers (sales). Advice to seek counsel from a qualified professional if needed is not quite the same as providing marketing referrals. I will have to look again to see if that referral service is used to generate revenue. There is nothing wrong with it... but I would be a bit skeptical of being referred to a financial service group (large or small) as a marketing lead.
15 years ago, the ELPs were paying Dave Ramsey for the leads. I'm sure it's the same way today.

I don't care. I don't paint everybody with the same brush. Some services I find value in, and others I don't. I'm just grateful that the folks that write my paycheck have a similar outlook (I suspect in a round about way none of us are the absolute low cost provider of what we do for a living and therefore have to add value in some sort of way to "justify" our income).
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Old 08-04-2011, 08:16 AM   #32
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Lots of his ELPs are insurance salespeople.
I don't agree with that at all, because they could easily steer folks into inappropriate investments, even with the supposed agreement they have with Ramsey.
I credit listening to D. Ramsey as my first real introduction to serious financial planning, though, so I'm willing to overlook many of the negatives if he is able to influence saving and budgeting to the masses.
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Old 08-04-2011, 08:30 AM   #33
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I joined FIRE some time after paying off everything but the house. I want to hang around with FIRE"D people so have not spent as much time at DR site since joining here. "if ya wanna be a drunk hang with the drunks... if you want to be FIRE'd hang with the FIRE'd people."

Never bought in 100% to Dave's plan, I never stopped contributing to my 401k as we get 6% if we put in 3%. I'd be crazy to pass that up! Also am not opposed to student loan (reasonable) debt as I look at it as an investment in your ability to make money.

I agree with most others here - Dave should not be giving investment advice. Every time I hear the 12% comment I cringe. My cynical side thinks he just uses 12% because that is what makes his formula show the most impressive results.

100 bucks a month for 40 years at 12% = his magic million dollars, sounds a lot better than 500 a month for 30 years at 10% to get the same million, but I sure don't want to work the 40 years he uses in his numbers. I suspect most people would not like the thought of finding an extra 550 a month to invest.
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Old 08-04-2011, 08:36 AM   #34
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15 years ago, the ELPs were paying Dave Ramsey for the leads. I'm sure it's the same way today.

I don't care. I don't paint everybody with the same brush. Some services I find value in, and others I don't. I'm just grateful that the folks that write my paycheck have a similar outlook (I suspect in a round about way none of us are the absolute low cost provider of what we do for a living and therefore have to add value in some sort of way to "justify" our income).

Not sure what you mean by that... I am not painting anything.

In the post I made it clear that there is nothing wrong with making the referrals available. (IMO).

I am not sure if he is vouching for those service providers or just providing a list of services. Either way, I would not be interested. If I needed those services, I would do my own research and contact them directly.
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Old 08-04-2011, 09:16 AM   #35
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I'm 100% debt free also and it feels great. If I was still working, I wouldn't dismiss the idea of a mortgage < 3% interest, however.

Ramsey (and Orman) both provide good advice for those who are irresponsible with their money. I agree that Ramsey should leave investments (and the occasional political jabs) alone and Orman should stop telling everyone to plan to work until they are 70!
Agree. Would also prefer Dave leave his religious views out of his personal finance advice as well. His show though, so he can do what he wants!
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Old 08-04-2011, 10:17 AM   #36
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I have listened to Dave Ramsey's radio show a time or two over the year while driving.

His his general message on conservative use of credit, living within one needs and the need to save for emergencies and retirement is spot on. (IMO)

anyway...

He has this thing he does that is amusing. When his callers get out of debt and they are giving him a testimonial on the air... They shout "Frrrrreeeeeeeeeeeeedoooooooommmmm" on his show.

I gotta admit... When I paid off our mortgage, right after I walked out of the bank... I got in my car and said "Frrrrreeeeeeeeeeeeedoooooooommmmm"... in the DR style!

Funny how certain things stick in your mind.
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Old 08-04-2011, 02:45 PM   #37
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He has this thing he does that is amusing. When his callers get out of debt and they are giving him a testimonial on the air... They shout "Frrrrreeeeeeeeeeeeedoooooooommmmm" on his show.

I gotta admit... When I paid off our mortgage, right after I walked out of the bank... I got in my car and said "Frrrrreeeeeeeeeeeeedoooooooommmmm"... in the DR style!
Oh, yes -- it's a wonderful feeling being completely debt-free (except for some CC debt I pay off each month).

It would be even more wonderful if my investments returned 12%.

(This is another aspect of Dave's investment advice that bugs me -- not just that he tells folks they can get 12% in stock mutual funds, but that he presumably keeps these folks 100% invested in stocks, which is likely not prudent for most listeners who don't have cast-iron stomachs for volatility.)
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Old 08-04-2011, 07:32 PM   #38
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15 years ago, the ELPs were paying Dave Ramsey for the leads. I'm sure it's the same way today.

I don't care. I don't paint everybody with the same brush. Some services I find value in, and others I don't. I'm just grateful that the folks that write my paycheck have a similar outlook (I suspect in a round about way none of us are the absolute low cost provider of what we do for a living and therefore have to add value in some sort of way to "justify" our income).

I read somewhere that the ELP thing is like a "subscription" to be made available on the Dave Ramey approved list. The salesperson pays a monthly charge and is on the list, and as many or as few join and pay the monthly subscription and that's the list.
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Old 08-05-2011, 10:59 AM   #39
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They do have to take a class of some kind with him as well, to "drink the kool-aid" as it were. But mostly this sort of model attracts insurance types, rather than fee only planners or wealth advisors.
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Old 08-05-2011, 05:31 PM   #40
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They do have to take a class of some kind with him as well, to "drink the kool-aid" as it were. But mostly this sort of model attracts insurance types, rather than fee only planners or wealth advisors.
I don't imagine a lot of advisors who work for a percentage of assets under management would want to pay a substantial sum for introductions to people who have been conditioned to be overly skeptical of everything, would constantly second-guess their recommendations in favor of third-party information, and flighty.

If what you're saying is true, the annuity peddlers are maing the best out of a bad situation by selling something with an upfront rip so they're compensated for their time. One would assume the Ramsey folks would require a lot of time and hand-holding. I don't blame the annuity salesman, I blame a debt-counsellor for trying to give advice on wealth building and management.
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