Dave Ramsey said what??...

[wildcat]

I was listening to old Dave a couple of weeks back. He typically sticks with his pay off debt and then save routine but this tine he threw in a little investment advice....

"Sometimes I buy load funds - like American Funds - b/c the expense ratio is lower over time and I don't mind paying the load."

Without actually doing the math it seems absolutely wrong, not to mention he fails to account for the "cost" associated with turnover. Too bad so many of his die hard listeners would be willing to jump off a cliff if he said so. Anyone looking for work as an investment counselor under Dave? Or do you prefer Suze?

Hope everyone is doing well.

 

[mickeyd]

Anyone looking for work as an investment counselor under Dave?

I think that you are on the right track wildcat. I have heard him praise load funds as well as EIAs from time to time also. I don't listen to him on a regular basis so I do not know if this happens often but I bet that this is not uncommon. As he has mentioned, he has a string of "investment councelors" that are somehow linked to him, maybe they pay a fee to ole Dave, because he is not doing it for free. It's all good. Dave has a right to make as much $$$ as possible as long as the folks undestand what's going on.

I doubt that they do.

 

[wildcat]

At least he didn't mention any "buckets" schemes

 

[Dawg52]

At least he didn't mention any "buckets" schemes

No, he believes in the envelope system.

 

[maddythebeagle]

hey w.c.

I have more of a problem with Dave saying stuff like this because he uses religion in his sell.... I can only guess that the Lord loves indexers...

 

[modhatter]

Actually, if you look at the American funds, they have one of the lowest turnover rates of all funds. Their strategy is deffinately long term hold. And if you do hold these stocks twenty years or so, he is very correct in his summation that the fees are lower.

If you are into jumping in and out of funds, of couse this is not the fund for you. Also, they have enjoyed one of the highest returns on a consistant bases of most long term funds out there. That is why they have the big bucks in their funds. (And no I don't own any-though I did consider at one time)

 

[Merlin]

Dave gets in wrong when it comes to investment advice. But it is possible that the average listener to his program may need an advisor such as the type that would sell American Funds.

 

[Texas Proud]

Actually, if you look at the American funds, they have one of the lowest turnover rates of all funds. Their strategy is deffinately long term hold. And if you do hold these stocks twenty years or so, he is very correct in his summation that the fees are lower.

If you are into jumping in and out of funds, of couse this is not the fund for you. Also, they have enjoyed one of the highest returns on a consistant bases of most long term funds out there. That is why they have the big bucks in their funds. (And no I don't own any-though I did consider at one time)

Lower than what I doubt they are lower than Vanguard index funds over a 20 year period....

 

[yakers]

I had three AFs, still have one. They are load funds and are, I believe, only sold by 'advisors'. They were/are pretty good. If I were interested in load funds I would look at them, only issue might be asset bloat as they have grown so much. I am a Vanguard fan but if advisors worked with AF i would have more regard for their recommendations.

 

[terminator]

He gives good advice about getting out of debt.

I don't listen regularly but I heard him last week recommending a 10% SWR . . .

 

[doah001]

Dog52
"No, he believes in the envelope system."

What is the envelope System?

 

[azanon]

Lower than what I doubt they are lower than Vanguard index funds over a 20 year period....

Several American funds would make a mockery of the performance of vanguard funds.

Dave's had some bad advise, but pointing someone towards american funds would not be one of them. It is very true that some load funds have a lower long term cost than some non-load, but high management fee funds, because the load is just paid once when the shares are purchased and an extra 0.5% management fee over time can add up to a serious amount of money.

But again, some of the American funds have outstanding performance. Look them up and see for yourself. I dont own them, but i'm aware that they're a top tier fund company.

 

[eridanus]

Several American funds would make a mockery of the performance of vanguard funds.

Which ones and what time period? I've looked at a few and they don't match up to VFINX over the long-term. That's even excluding the up-front sales charge on Class A shares, which would make American funds look even worse.

ANCFX
CWGIX (the closest)
CAIBX
AMCPX
ABALX
AGTHX
??

 

[azanon]

Which ones and what time period? I've looked at a few and they don't match up to VFINX over the long-term. That's even excluding the up-front sales charge on Class A shares, which would make American funds look even worse.

So you found one Vanguard fund that the American funds dont add up to out of the probably hundreds of vanguard funds? Now that sounds like a fair comparison! * extreme sarcasm * That was a joke, right?

 

[Dawg52]

Dog52
"No, he believes in the envelope system."

What is the envelope System?

Thats a system he recommends to help one stay on a budget. You literally put x amount in one envelope for clothes, another envelope for food, another for utilities, etc........ Not a bad system I guess for those that can't manage their money. But guess what? He will actually sell you the envelopes on his website at a premium price.

 

[audreyh1]

But guess what? He will actually sell you the envelopes on his website at a premium price.

Oh wow! It's really amazing to me that there are people who can't manage their money unless doing such basic things like this. Very child like.

But I guess there are a lot of these folks out there based on the calls to Suze Orman and Dave Ramsey.

Audrey

 

[unclemick]

MVelopes gives you a thirty day free trial.

Got a plug on Yahoo the other day.

May play with it(30 DAY FREE TRIAL) for kicks since I'm giving up frugal and never used a 'formal' budget.

Looks like the 'techie' version of what my Mom used from the Great Depression until I left home and who knows how long after - the computer version of the shoe box with envelopes.

heh heh heh heh heh

 

[Mr._johngalt]

Oh wow! It's really amazing to me that there are people who can't manage their money unless doing such basic things like this. Very child like.

But I guess there are a lot of these folks out there based on the calls to Suze Orman and Dave Ramsey.

Audrey

And Bob Brinker. Let's not forget him.

JG

 

[mickeyd]

But guess what? He will actually sell you the envelopes on his website at a premium price.

LOL ...well ole Dave has to eat too, doesn't he? You gotta buy envelopes somewhere don't you?

 

[Nords]

Oh wow! It's really amazing to me that there are people who can't manage their money unless doing such basic things like this. Very child like.

If you want to feel good about your savings habits, read the Dollar Stretcher newsletters. They also post the occasional "Fame & Fortune" investment profiles of celebrities, rock stars, authors, and other role models like this guy...

 

[eridanus]

So you found one Vanguard fund that the American funds dont add up to out of the probably hundreds of vanguard funds? Now that sounds like a fair comparison! * extreme sarcasm * That was a joke, right?

You made the assertion. It's your burden of proof.

You claimed that "several" American funds would make a "mockery" of Vanguard funds. Which are they and what time period?

 

[shiny]

Oh wow! It's really amazing to me that there are people who can't manage their money unless doing such basic things like this. Very child like.

I actually had a system like this when I was in high school and college working pt and summer jobs. If only I had thought to market it to the masses! Oh, the things that could have been!

 

[Mr._johngalt]

You made the assertion. It's your burden of proof.

You claimed that "several" American funds would make a "mockery" of Vanguard funds. Which are they and what time period?

I own one front loaded American Fund and have been happy with it, so I
too am interested in the answer (not interested enough to do any of the
research myself, however).

JG

 

[Sarah in SC]

A guy I knew went through his financial counselor program. It cost him nearly $5000 total to go through "Dave's Training". I reviewed the books and materials he got--mostly salesmanship and marketing stuff. It seems that most of the folks he gets in the program are insurance people that also sell some mutual funds.

You gotta remember: this is a very simple, not very sophisticated market segment, not like you folks. I listen to his podcasts sometimes, but mostly to reinforce my LBYM mentality. There are some unbelievably ignorant people (think payday loan users) that he really does help. I don't think he's a bad panacea for the masses and I'm not really offended by the religious stuff too much.

But I figure, everyone's got to start somewhere, and if Dave Ramsey is the start to someone's financial education, then maybe more of them will wind up where most of you are, knowledge-wise.

Sarah

 

[Cut-Throat]

I own one front loaded American Fund and have been happy with it, so I
too am interested in the answer (not interested enough to do any of the
research myself, however).

JG

John,

Since you don't invest in the market, what is your fund invested in? - Pork Bellies?