Dave Ramsey Show and FIRE Caution.

[FREE866]

Careful or you’ll launch the FFPCA Movement.

hahahaha
well played!

 

[punkinhead]

Plugged into Firecalc:

Start: 3,000,000
Spend: $50K
Years: 60 yrs.
0 SS
0 Pension
Kept portfolio at Total Market
CPI inflation
75% equities: 100% Success

Kick up the spending to $75K: 0 chance of success

I guess I could see the success of a single person, living in Thailand. 50K is the total spending. I cannot see a 34-year-old with kids spending $50K for the rest of his life.

I just plugged $75K spending for 60 years with a $3,000,000 portfolio into Firecalc and got 100% success. That's not surprising for a 2.5% spend rate.

 

[rk911]

LOL, I remember when I got my first CC... I had graduated college and was making a whopping $22K a year... had to go to the bank and talk to an officer.. he said they were going to give me $750 credit ONLY because I was working for a big accounting firm... otherwise I would not have gotten one...

memories..memories. Our first CC was from K-Mart. K-mart!! Newly married in 1970, a couple of dumb kids (19 & 18). In about a year we put $1000 on that card making the minimum payments. $1000!!!

Then we started planning our honeymoon trip we never had to Disney in FL. As the planning progressed we realized we needed more cash...a lot more cash...for the trip. So we pulled a 'Ramsey' (before there was a Ramsey), cut up the card, worked dilligently for many, many months throwing every extra $ at the outstanding balance. Finally paid it off and started saving toward the trip (which we took 2-yrs later in 1974).

We haven't carried a CC balance since. We now have 3 CCs...one for daily use, one for online use and a card in our safe in case one or both of the others are lost, stolen or hacked.

 

[PatrickA5]

I personally find some of the Ramsey team members very judgy and a tad hypocritical. Their Facebook group is run by a person [Mod edit] who seems to love booting people out... one wrong question and OUT!

That's the DR way of doing things. He pretty much doesn't allow anybody that works for him to even remotely disagree with his approach. If the Facebook Mod is a Ramsey employee, I imagine they are required to keep things inline with Dave's ideas.

I used to listen to him and thought he was spot on with his debt reduction techniques, but was turned off by the way he would chastise any listeners that questioned anything he said. The more I read about the man himself, the less I liked him.

 

[ColdFeet]

I had to completely deprogram my niece and her husband who sadly paid for his course. They sat on their hands for 7 years while renting and trying to save up enough for a 20% down payment and a 15 yr mortgage and they were still in their mid 20s. And they had no credit rating into their 30s. Cost them literally 100's of thousands of rapid appreciation and a chance at historical low interest rates (100s more), 10s of thousands more renting on top of no tax write off, because they were scared to death of good debt at that age.

Everyone must learn the hard way. I had the first talk in 2015. Took them till 2022 to see they missed a life changing opportunity at that time. Sadly now is when I'd be cautious.

If a person is young and responsible he's a recipe to be poor forever.

 

[FREE866]

Ramsey is great if you are completely out of self control. For everyone else... he's a recipe to be poor forever. He's lost more people missed opportunity in the past 3 years than any hack just telling a responsible person to take heavy risk in appreciating assets. I had to completely deprogram my niece and their husband who sadly paid for his course. They sat on their hands for 7 years while renting and trying to save up enough for a 20% down payment and a 15 yr mortgage and they were still in their mid 20s. Cost them literally 100's of thousands of rapid appreciation and a chance at historical low interest rates because they were scared to death of good debt at that age.

Everyone must learn the hard way. I had the first talk in 2015. Took them till 2022 to see they missed a life changing opportunity at that time.

I agree his message is best suited for those who are just innately a disaster with money.


Not sure I agree with the rent comment. If one rents they can use money and invest in the stock market which in this time frame 2015-2023 the returns have been very good.

 

[rk911]

I am not a fan....


One of the first thing he says is to cut all credit cards... heck, I get a lot of money back on my CCs... a few thousand... no way I am going to cut that out of my life... for what? to show I am 'pure'?...

Dave and I part company on this point as well. We earn a little bit in cash-back but that's not why we use CCs. They're convenient and an EZ way to track spending. But I suspect that the overwhelming majority of users in this forum have the ability and character to use credit responsibly. But I don't think that extends to the public in general. When we were first married back in 1970 we ran up a $1000 balance on a K-Mart CC! That, and planning our honeymoon trip, was a wake up call. We cut up the card, paid off the balance (took many, many months) and we haven't carried a balance since.

 

[Walt34]

I am not a fan....

One of the first thing he says is to cut all credit cards... heck, I get a lot of money back on my CCs... a few thousand... no way I am going to cut that out of my life... for what? to show I am 'pure'?

For all the criticisms of Ramsey, I do think that overall, the guy does more good than harm. We all know people who are clueless about how to handle money or don't have the self-discipline to control themselves with a credit card in a department store ("exhibit A" being my ex) and those people are Ramsey's target audience. While we can quibble about the methodology of paying off the debt, but if the end result is that he gets thousands of people out of debt and in control of their finances who otherwise would not have, I do think that's a good thing.

 

[ColdFeet]

For all the criticisms of Ramsey, I do think that overall, the guy does more good than harm. We all know people who are clueless about how to handle money or don't have the self-discipline to control themselves with a credit card in a department store ("exhibit A" being my ex) and those people are Ramsey's target audience. While we can quibble about the methodology of paying off the debt, but if the end result is that he gets thousands of people out of debt and in control of their finances who otherwise would not have, I do think that's a good thing.

His downfall is not properly specifying what category or stage of life one falls into. Advice needs to be fluid. There's a time for risk on and a time for risk off. Or one never has a chance at fire. It's not much different than not understanding fire completely like that video.

 

[Texas Proud]

Oh... just an observation on Ramsey as a financial guru...


He said he owned a lot of RE when he was young... pulling in a lot of money..was a millionaire in his 20s... but it was all on 90 day notes with the bank... and then his loan office changed at one bank and his loans were called... he had to sell... which caused his other banks to call loans etc. etc.. (not sure if this is all true as I only saw it once)... he went bankrupt... which started him on his journey with no debt...



BUT, who deals in real estate with 90 day loans Anybody here know about matching duration of loan with the asset? I knew that when I was that age... it is not like rocket science...


So, from one extreme to the other with debt.. to me there is a nice happy medium... I have a 3 1/8 pct. rate on my house... I will keep it as long as I can... it is debt but IMO good debt..


My sister has a 1.9% on her car loan... she is very happy with that rate... I would be also... again, good debt..

 

[Badger]

19 years ago I made an appointment with one of Dave Ramsey free approved financial advisors just to see what his projections were for my success since we were already had no debts and were LBYM. He was pleasant to work with and prepared an 8x10 hardbound book of my financial situation and recommendations. Bottom line was he didn't have any suggestions for changing/improving my plans but in case I wanted to move some of the money he had a few MFs for me to consider. There was no pressure and I decided to stay with my plan. I don't know what his suggestions could have done but with my plan I have almost 7X more invested even after a number of years drawing from it.
I don't know if he still has approved financial advisors. Would I recommend them. No. Not unless you have a plan that is working for you and an appointment is just for fun.

Cheers!

 

[Rianne]

I just plugged $75K spending for 60 years with a $3,000,000 portfolio into Firecalc and got 100% success. That's not surprising for a 2.5% spend rate.

Right! I must have input something wrong. Heck, $100K spending gives you 100% success! As long as you stay 75% in equities and long bond interest. Again, 0 SS, 0 pensions.

Average at the end $24,495,807, high end $87,580,394

 

[Jeffman52]

DW and I followed Dave's plan to get out of debt 15 years ago and it was game changing for us. I suspect had we not done so we would have worked into our 70's. But after getting out of debt we went on our own for investing and we have done very well with saving and investing.



Funny enough I was at my Dentist a few weeks ago and telling him to make sure to check thoroughly because I was retiring next May. He looked confused and said... "you aren't going to wait until at least 65?". I just laughed and said, " I don't know why I would, we have more than enough and we have planned for this, so who are we trying to impress by working longer to stack up more money".


Its kind of the Dave thing he will say sometimes to people, "you mean you are done working? What kind of life is that?"


"well mine of course"

 

[jameson71]

Its kind of the Dave thing he will say sometimes to people, "you mean you are done working? What kind of life is that?"

A Free one.

 

[World Traveler]

I've enjoyed this thread. I think these two in the video don't get it either. I liked having a career for 30yrs and after being in my 7th year of being FIERed, DW and I are having a blast traveling and making memories with our family.

DR I think is great for getting people out of debt but after that not so much. I wanted to use DR for financial counceling at our church but his products were too costly. I was kind of disappointed.

 

[Gumby]

To be fair, the no debt part is pretty darned important. Since I left home at 18, I have had no debt except for a mortgage and a couple of car loans. I've always kept the cars long after the notes were paid off, basically until they could no longer be kept running. And, after refinancing several times to get better rates and shorter terms, we owned the house free and clear after 23 years. In my opinion, that has made a world of difference in my life. So to the extent Dave Ramsey can help people get themselves out of debt, he is doing a very good thing.

 

[frayne]

To be fair, the no debt part is pretty darned important. Since I left home at 18, I have had no debt except for a mortgage and a couple of car loans. I've always kept the cars long after the notes were paid off, basically until they could no longer be kept running. And, after refinancing several times to get better rates and shorter terms, we owned the house free and clear after 23 years. In my opinion, that has made a world of difference in my life. So to the extent Dave Ramsey can help people get themselves out of debt, he is doing a very good thing.

That is exactly right, in order to build wealth a person or family has to get off the debt hamster wheel and failure to do so is hazardous to early retirement. Our society is driven by, you got have this shiny new thing today and it is only x amount for a monthly payment. Dave gets it, as do I would imagine most here as well. The two dudes in the video are a bit out of their element when talking about what it takes to have FIRE and that was the reason for the post. I think Dave would have to cringe just a little listening to this episode.

 

[Cayman]

Gumby + Frayne - yes on the "no debt".

The Ramsey guys - "we're made to work" - well, yeah we are! Many of us here are working at enjoying the heck out of life... but we're not working for pay. I'm heading out to work on my kayaking this morning. Signing off.....

 

[LateToFIRE]

Gumby + Frayne - yes on the "no debt".

The Ramsey guys - "we're made to work" - well, yeah we are! Many of us here are working at enjoying the heck out of life... but we're not working for pay. I'm heading out to work on my kayaking this morning. Signing off.....

I think I know what you + Gumby + Frayne are getting at on the "no debt" comments and I know this is gospel in the FIRE/personal finance community. But, just sayin, I have used large amounts of cheap debt strategically to leverage assets, and that has added millions (yes, plural) to my NW above and beyond what it would have otherwise been. Now, do I need to unwind some of that to retire - yes indeed - don't want that amount of effort/complexity in retirement. Just sayin not all debt is bad debt - you just gotta know what you're doing - YMMV.

More to the point though, I have not carried any kind of consumer debt for the past 25 years - cards paid off in full each month, always cash for used cars, etc. And yes, far too many people (perhaps even most people) are entrapped and enslaved by their grossly misused debt.

 

[Texas Proud]

I have mentioned it and will do so again...



Debt is not a bad 4 letter word... it can be if you do not use it properly...


I just though of some other debt I have had over the years that I would use again if I could... zero interest.... yep, I have bought various items over the years with zero interest... one time IIRC it was for 3 years...


I tried to buy the item for cheaper so I would not have debt but the price was the price... no discount for cash... so, got the zero loan and was happy... and this was way back when you made good money on your savings (well, kinda like now )...


So, if I were to buy something that cost a bit of money and was offered zero interest (heck, maybe 1% or so) I would take it...

 

[Katiek]

One of the guys in the video is Ramsey's "work expert" whose has a radio show focused on career and work questions. So I'd expect him to want people to keep working.

 

[Gumby]

The last car I bought was in December 2017. I could have paid cash, but they were offering 63 month, 0% financing, so I took it. I just made the last payment in March. So, yes, I also understand that debt can work for those who know how to manage it. But I think we could agree that we are exceptions to the general run of the population, who are all too frequently crushed by debt rather than helped by it.

 

[Koolau]

To be fair, the no debt part is pretty darned important. Since I left home at 18, I have had no debt except for a mortgage and a couple of car loans. I've always kept the cars long after the notes were paid off, basically until they could no longer be kept running. And, after refinancing several times to get better rates and shorter terms, we owned the house free and clear after 23 years. In my opinion, that has made a world of difference in my life. So to the extent Dave Ramsey can help people get themselves out of debt, he is doing a very good thing.

That is exactly right, in order to build wealth a person or family has to get off the debt hamster wheel and failure to do so is hazardous to early retirement. Our society is driven by, you got have this shiny new thing today and it is only x amount for a monthly payment. Dave gets it, as do I would imagine most here as well. The two dudes in the video are a bit out of their element when talking about what it takes to have FIRE and that was the reason for the post. I think Dave would have to cringe just a little listening to this episode.

Hear, hear!

Strategic debt ONLY. No consumer debt.

I must refer once more to my BFF (recently deceased) who was half a million in debt, primarily because of his inability to resist the now vs the future. His DW is now left with the mess and I have no idea how it will sort out, but it will be painful. He and I made about the same money and I'm more or less "main stream - stash wise - here on the Forum. Consumer credit is the main reason BFF ended up where he did. God rest his soul and God help his DW!

 

[Texas Proud]

The last car I bought was in December 2017. I could have paid cash, but they were offering 63 month, 0% financing, so I took it. I just made the last payment in March. So, yes, I also understand that debt can work for those who know how to manage it. But I think we could agree that we are exceptions to the general run of the population, who are all too frequently crushed by debt rather than helped by it.

Heck, most on this forum are not normal...


For something like that I just set autopay at my bank... I never let them take out money, always push to pay bills...


When I refied my house I set up the payments for 15 years... have not touched that payment in years.. easy peasy

 

[frayne]

Heck, most on this forum are not normal...

Probably the most honest and profound statement made today !

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