Eight is enough!

[imoldernu]

I'd like to get some feedback on what we could be doing better.

Your plan sounds great to me, but I 'm from a few generations back, and my youngest is five years older than you.

After 60 years of marriage and 30 years of very happy retirement, my thinking hasn't changed. Enjoy life, do what feels right, and remember that as a young retiree, you can always go back a bit if the situation changes.

 

[Chopper]

A different view but rentals are very much a job. Retire without that chore, the best day of my life was selling a 30 unit complex and being free of that garbage. Tenants are like eventual villians. I breath better these days.

I'll differ also on IRA, I regret that move, going to pay higher taxes and "tax-free" growth needs to be shown by accounting firms. My dad is a CPA and shows us "factually" the numbers. It is not the panacea you are being duped into.

During earning years I could manipulate a 35% rate. RMDs are now gonna be 50%.

 

[ncbill]

Just my 2 cents, but you need to buckle down on the saving. You are too invested in real estate in one area. Did you say there was only one industry there? If that goes south that will cut into the numbers of renters.
I think you need to pump money into liquidity, even stocks.
You cannot eat real estate.

Cap rate would indicate whether or not the rentals are worth keeping.

Simply being cash flow positive doesn't mean he should keep the rentals, especially if they're SFRs in a only-one-big-employer town.

 

[SmallCityDave]

Cap rate would indicate whether or not the rentals are worth keeping.

Simply being cash flow positive doesn't mean he should keep the rentals, especially if they're SFRs in a only-one-big-employer town.

The cap rates on my homes runs between 12-25% the one I just closed on should be slightly better than 15%.


Our town does have that one big employer that if they were to leave it would cripple the town but that employer has a proven track record of over 100 years and it's the government.

 

[knucklehead 61]

i have a lot of rental properties. mostly sfr but also 7 duplexes. most are paid off. i use a pm to handle the day to day crap but do some of the repairs myself to save $.
they are all in small towns (pop.370, 5300, & 9500) & were cheap to buy. they cashflow fantastic. i'm grossing 65%+ more than when i had a real (multiple 6 figure) job.
i am still diversified with a 7 figure ira at vanguard, but will never need to touch it other than to buy a couple more toys every year once i get to 59.5.
no matter if the economy is booming or bust, people will need a place to live, so rentals will always be a solid investment.

 

[Nature Lover]

As rough example of income and outgo for this year:

$250k income
-100k for taxes, tithe and offering
-40k finish paying off rental
-10k home remodel
-55k personal "fixed" budget
-45k saved for buying and rehabbing rental

Dave,

You're doing great! Many of the comments here are good for you, too. I'm not a real estate guy, but I envy those who are. The one thing I might add to the discussion is that when you stop working, your gross income will decline significantly, and that requires a psychological adjustment. Of course, taxes should decline, too, which will help. But will you be able to continue to tithe/offer amounts that you're comfortable/happy with? Will you have sufficient income to cover periodic expenses (if they're not already in your $4500/mo budget)? Do you think you'll spend differently if you're both retired and living on your investments (some people spend more, in fact)? One of the other community members once described retirement (from a financial perspective) as changing from a focus on building up investments, to one where we expect to gradually spend down investments; and that spoke to me (I struggle with the spending down part). Is that something you've considered?

I'm not suggesting I have the answers; just hoping to add to the feedback on things to consider.

Glad you're here and hope we hear from you often,

NL

 

[SmallCityDave]

Dave,

You're doing great! Many of the comments here are good for you, too. I'm not a real estate guy, but I envy those who are. The one thing I might add to the discussion is that when you stop working, your gross income will decline significantly, and that requires a psychological adjustment. Of course, taxes should decline, too, which will help. But will you be able to continue to tithe/offer amounts that you're comfortable/happy with? Will you have sufficient income to cover periodic expenses (if they're not already in your $4500/mo budget)? Do you think you'll spend differently if you're both retired and living on your investments (some people spend more, in fact)? One of the other community members once described retirement (from a financial perspective) as changing from a focus on building up investments, to one where we expect to gradually spend down investments; and that spoke to me (I struggle with the spending down part). Is that something you've considered?

I'm not suggesting I have the answers; just hoping to add to the feedback on things to consider.

Glad you're here and hope we hear from you often,

NL

Great thought provoking questions. I do think that we will live and spend differently but for the last 10 years we've been laser focused on paying off our consumer debt, home and rentals we've lived a rather frugal lifestyle (in a sense) for a couple of years we went without trash service to save a few dollars...


Will we have enough income to cover the expenses.... I certainly hope so but in reality I don't know what to expect quite yet. I keep thinking if we had a couple more rentals we could retire much sooner. I feel we could cut back substantially without feeling deprived.



Our income will come in stages, the 1st few years just the rentals after that the 401k then IRA after that my SS and last my wife's SS. I would like to be able to have all the foreseeable expenses addressed before I retire or at least have most big ticket items in the budget.

 

[Huston55]

I'm guessing SmallCityDave has been pushing funds hard at the rentals to get them paid off. That's what we did. There is a great feeling of security having all the properties free and clear. There is a big disposition on this board toward stock and bond funds and a big antipathy toward financial advisors of the commision type. Probably reasonable, but you do you SmallCityDave - You have a nice chunk of cash saved for a future rental, that can stand in as emergency funds. You are targeting about 60 for retirement - have you considered your rental exit plan? 69 here, and I'm getting REAL done with riding herd on our rentals, but my gal has a very hard time looking at the tax penalty for a stack of almost fully depreciated properties - also they bring in a stack of money very consistently. During the last big stock market crash tenants kept paying. During the big real estate crash tenants kept paying. Stock funds have done great the last years - but they can fall on their faces for unknown reasons and you can't do anything about it but hope they come back up. If you are doing rentals and are independent contractors I'm thinking you like to feel you have some control over things..

At this point we have cut our number of doors (we're mostly apartments) by 1/4 and have an absurd amount of cash waiting for a great deal but earning about 3% in CD and bank deals. We also have money in hard money loans and land sales contracts coming in. And, because I want to cover the good chance that I'm not the smartest person in the world, about 20% of our net worth in stock and bond funds. No FA, Vanguard.

Only one rental property here but, these are options to consider:

1. 1031 exchange to ‘restart’ the depreciation calendar; likely only good if you want to keep rentals for a chunk of time.

2. Convert some/all rental properties into a Charitable Remainder Trust (CRT); the CRT can be designed to spin off income for ~2-20 yrs, you get a big tax break, and (here’s the magic) you avoid cap gains tax because the CRT entity is a non-profit and doesn’t pay taxes.

See this thread for some sample numbers: http://www.early-retirement.org/for...ptimum-income-from-rental-property-83474.html

 

[ERD50]

... The rentals aren't terribly liquid but they are income producing, the homes that we bought as rentals are worth 50-100% more than the initial purchase price and return on investment is no less than 15%-20% annually.... .

Hmmm... do I detect fuzzy math?

Maybe I'm misreading this, but this looks like the kind of math some dividend stock pickers use. It's a rather meaningless number that makes things look better than they are.

Example: I purchase an investment for $100,000 and it provides a consistent 10% net income ($10,000 annual). Some years later, it has doubled in price, and the income has increased to $15,000 annual. If I use 'return on investment', I claim that is $15,000/$100,000 = 15% 'return on investment'.

But if the investment is really worth $200,000 now, I need to use apples-apples, and realize I could invest that $200,000 elsewhere - so if I earned $15,000/$200,000 that would be 7.5% annual return. You are making 7.5% on your investment, not 15%. The $100,000 is gain. Two separate numbers. Combining them is fooling yourself, and only leads to bad financial decisions. Your current return is a function of current value - what you paid for it is irrelevant.

'Return on investment' can be useful as a forward look to compare two potential investments, but I don't think it's helpful to look backwards.

-ERD50

 

[HI Bill]

Hmmm... do I detect fuzzy math?

Maybe I'm misreading this, but this looks like the kind of math some dividend stock pickers use. It's a rather meaningless number that makes things look better than they are.

Example: I purchase an investment for $100,000 and it provides a consistent 10% net income ($10,000 annual). Some years later, it has doubled in price, and the income has increased to $15,000 annual. If I use 'return on investment', I claim that is $15,000/$100,000 = 15% 'return on investment'.

But if the investment is really worth $200,000 now, I need to use apples-apples, and realize I could invest that $200,000 elsewhere - so if I earned $15,000/$200,000 that would be 7.5% annual return. You are making 7.5% on your investment, not 15%. The $100,000 is gain. Two separate numbers. Combining them is fooling yourself, and only leads to bad financial decisions. Your current return is a function of current value - what you paid for it is irrelevant.

'Return on investment' can be useful as a forward look to compare two potential investments, but I don't think it's helpful to look backwards.

-ERD50

This is actually more complicated. How long did for the 100% appreciation to occur? If you take the current value, subtract the purchase price, mortgage, property taxes, insurance, maintenance and other costs, then credit the appeciation and annual net income, it will give you a better picture of the total return on the initial investment. You seem to be excluding the gain.

Today, if you calculated the current sale price, less fees and taxes, and invested in something else, you would be comparing apples to apples.

 

[SmallCityDave]

Hmmm... do I detect fuzzy math?

Maybe I'm misreading this, but this looks like the kind of math some dividend stock pickers use. It's a rather meaningless number that makes things look better than they are.

Example: I purchase an investment for $100,000 and it provides a consistent 10% net income ($10,000 annual). Some years later, it has doubled in price, and the income has increased to $15,000 annual. If I use 'return on investment', I claim that is $15,000/$100,000 = 15% 'return on investment'.

But if the investment is really worth $200,000 now, I need to use apples-apples, and realize I could invest that $200,000 elsewhere - so if I earned $15,000/$200,000 that would be 7.5% annual return. You are making 7.5% on your investment, not 15%. The $100,000 is gain. Two separate numbers. Combining them is fooling yourself, and only leads to bad financial decisions. Your current return is a function of current value - what you paid for it is irrelevant.

'Return on investment' can be useful as a forward look to compare two potential investments, but I don't think it's helpful to look backwards.

-ERD50

You detect something....


Why don't you tell me your thoughts of Dave Ramsey and why you don't like him?

 

[ERD50]

You detect something....


Why don't you tell me your thoughts of Dave Ramsey and why you don't like him?

Well, if that is Dave Ramsey math, then there's part of your answer.

But the question/analysis was stated outside of anything to do with DR. Why bring him into it?

-ERD50

 

[SmallCityDave]

Well, if that is Dave Ramsey math, then there's part of your answer.

But the question/analysis was stated outside of anything to do with DR. Why bring him into it?

-ERD50

Yeah that's exactly what that was Dave Ramsey math...


You had a question about something I wrote over a month ago and I do too, so what is it that you don't like about DR?

 

[ERD50]

Yeah that's exactly what that was Dave Ramsey math...


You had a question about something I wrote over a month ago and I do too, so what is it that you don't like about DR?

The answer is right there, as I said. He is using math that isn't helpful to you. Why do you want to follow someone who leads you down the wrong path?

I've been shown some other bad math from him, enough to really raise the red flags. He throws around a number of expecting 12% earnings from the market. He 'validates' that with a historical 'average return' number. But 'average returns' don't add up in a meaningful way. If you take a 50% loss, you need a 200% gain to get back where you were, to zero gain. But a numerical average of -50% and +50% does not get you to zero, it gets you to a 25% loss (.5 * 1.5 = 0.75 ). And if you numerically average -50% and 200%, you get an 'average' 25% gain ( (0.5 + 2) ∕ 2 = 1.25) - but that '25% gain' does not leave any money in your pocket!

He's a smart guy, I'm sure he knows the difference, it isn't rocket science, so why does he say this? If you click on the links from those statements, you'll see why - he's trying to sell you on something.

Some people will defend DR, saying that he is for novices, and he helps those people. I accepted that for a while. Then, on another forum (not a financial forum, but filled with bright people - this was in their 'general' area), a young poster was going on about personal finance, and referring to DR. A number of other posters were warning the guy about following 'gurus', and to learn to think on your own, and to use critical thinking. And I also tuned into a few of the DR radio shows.

Well, this young poster went on, posting more DR links. The more he posted, the more we found serious fault with DR's approach.

DR gives a lot of bad advice. It is advice that just won't help you to grow financially. I understand that if someone can't control their spending, they need to fix that. But don't try to tell me that once I've learned to control spending, that I should not use a credit card, pay it off each month, and benefit from the rewards. I've made many thousands of $ over the years from CC rewards, and I never spent a penny more because I had a card. To preach that is irresponsible, and keeping people from really getting the most from their efforts.

But the worst of it is, he uses bad logic, scare tactics, and bad math to make his points. I have no respect for that. You can do better - use your own brain.

He takes the "no debt" thing to such an extreme - on one of his shows, he had this poor couple who made such bad, bad decision, all in the name of getting debt free. They would have been so much further ahead, financially and quality of life wise, if they approached debt as a tool. One to be used wisely.

A quick analogy - it is fine to start a kid out with training wheels. But if you convince them that training wheels are the only way to ride a bike, you hold them back for the rest of their lives.

That's all I have time for. Bottom line, you can do better than to listen to DR. He will hold you back.

-ERD50

 

[Cut-Throat]

we try to live well beneath our means and we are fans of Dave Ramsey.

Hopefully you don't follow his investment advice.

 

[SmallCityDave]

The answer is right there, as I said. He is using math that isn't helpful to you. Why do you want to follow someone who leads you down the wrong path?

I've been shown some other bad math from him, enough to really raise the red flags. He throws around a number of expecting 12% earnings from the market. He 'validates' that with a historical 'average return' number. But 'average returns' don't add up in a meaningful way. If you take a 50% loss, you need a 200% gain to get back where you were, to zero gain. But a numerical average of -50% and +50% does not get you to zero, it gets you to a 25% loss (.5 * 1.5 = 0.75 ). And if you numerically average -50% and 200%, you get an 'average' 25% gain ( (0.5 + 2) ∕ 2 = 1.25) - but that '25% gain' does not leave any money in your pocket!

He's a smart guy, I'm sure he knows the difference, it isn't rocket science, so why does he say this? If you click on the links from those statements, you'll see why - he's trying to sell you on something.

Some people will defend DR, saying that he is for novices, and he helps those people. I accepted that for a while. Then, on another forum (not a financial forum, but filled with bright people - this was in their 'general' area), a young poster was going on about personal finance, and referring to DR. A number of other posters were warning the guy about following 'gurus', and to learn to think on your own, and to use critical thinking. And I also tuned into a few of the DR radio shows.

Well, this young poster went on, posting more DR links. The more he posted, the more we found serious fault with DR's approach.

DR gives a lot of bad advice. It is advice that just won't help you to grow financially. I understand that if someone can't control their spending, they need to fix that. But don't try to tell me that once I've learned to control spending, that I should not use a credit card, pay it off each month, and benefit from the rewards. I've made many thousands of $ over the years from CC rewards, and I never spent a penny more because I had a card. To preach that is irresponsible, and keeping people from really getting the most from their efforts.

But the worst of it is, he uses bad logic, scare tactics, and bad math to make his points. I have no respect for that. You can do better - use your own brain.

He takes the "no debt" thing to such an extreme - on one of his shows, he had this poor couple who made such bad, bad decision, all in the name of getting debt free. They would have been so much further ahead, financially and quality of life wise, if they approached debt as a tool. One to be used wisely.

A quick analogy - it is fine to start a kid out with training wheels. But if you convince them that training wheels are the only way to ride a bike, you hold them back for the rest of their lives.

That's all I have time for. Bottom line, you can do better than to listen to DR. He will hold you back.

-ERD50

I'd agree with you about the 12% but that's his shtick that's how he creates revenue for himself, I doubt he could sell what he sells promising 5% as my FA did.

With how much personal/mortgage/student loan debt as we have (in the US) perhaps he isn't getting the word out enough.

You must be a real smart guy taking thousands of dollars away from the credit card companies and never spending a penny more, perhaps you should have a show of your own? I'd be a listener.

Why do you use credit cards, I'm sure you do well with your investing? Is it just so you can make thousands off of the cc companies?

Merry Christmas!

 

[ERD50]

I'd agree with you about the 12% but that's his shtick that's how he creates revenue for himself, I doubt he could sell what he sells promising 5% as my FA did. ...

It says a lot that as a financial guy, he misrepresents this basic and important financial concept to his audience, to make revenue for himself.

... With how much personal/mortgage/student loan debt as we have (in the US) perhaps he isn't getting the word out enough.
...

Debt is a tool, it exists out there, people ought to be taught how to use it, and recognize when it can be used to their advantage. My point is he gets the wrong word out. Going back to an analogy, it's like saying instead of taking a safe driving course, just don't drive - it's dangerous.

... You must be a real smart guy taking thousands of dollars away from the credit card companies and never spending a penny more, perhaps you should have a show of your own? I'd be a listener. ...

Yep, that's the DR spiel that is a bit insulting and a bit snarky, and worse - not helpful to his listeners.

It does not take much in the way of 'smarts' to realize the advantages of a credit card. I get 2% to 4% back on every dollar use it for, no annual fees. I use it for as many purchases that I make as I can - yes, that adds up. Why would I throw those rewards away? In what world would I be better off w/o that extra 2%-4%? That's not being financially responsible. And it is more important to people with less means than I have - they really could use that extra few %.

In addition the CC provides some protections, there is a grace period, so that gives you a little time to arrange the funds to pay it off - it doesn't hit your bank account instantly like a debit card. That allows me to keep a bit more money invested and working for me, instead of as a buffer in my checking account.

And like so many others, I don't spend a penny more - that's because I understand that money is money, the source is irrelevant. It's not rocket science. I buy something because I need it, or have decided it is something I want, has value, and that I can afford it. So I use the source that works the best, and that is almost always credit cards. Cash can be lost, you need to take it out ahead of time (less money working for you). If having a card versus cash affects how you spend - that should be addressed, so that you can take advantage of the CC.


Same with a mortgage - in a recent thread, I realized I'm over $50,000 ahead just from a re-fi of my mortgage in 2002, rather than paying it off. That's some real dough. And even if I did it at exactly the worst time for stocks in that period, I was only short a few dollars.

... Why do you use credit cards, I'm sure you do well with your investing? Is it just so you can make thousands off of the cc companies? ...

There is no connection there - this is the kind of illogical, unhelpful thinking DR gets into. I recall this was another part of DR's spiel - a DR fan pointed me to one of his videos, DR says something like "I never met a wealthy man that says it was CC rewards that were what made him rich". Well, I'm not claiming that either, it is a silly claim, totally irrelevant - but it sure helps me financially. It all positive, why would I reject this?

Illogical - a person could do well/poorly with investing, and use/not-use credit cards. There's no point in that question. I make thousands from CC and mortgage debt in addition to good investing. It's not either/or, and there is no reason not to do both. Why would you say "just so" I can make thousands off the CC companies? Isn't that reason enough? Again, this isn't rocket science - I buy & hold broad based index funds, and make sensible purchases with whatever money form makes the most sense.

The fact that you ask these questions this way is a sign you are caught up in DR's irrational thinking. He loves to paint these CC companies as 'snakes' or evil or something. It's crazy. Like a few of us said earlier, you are better than this, think on your own, DR will hold you back.

..

Merry Christmas!

It was! And to you and yours!

-ERD50

 

[Chuckanut]

You must be a real smart guy taking thousands of dollars away from the credit card companies and never spending a penny more, perhaps you should have a show of your own? I'd be a listener.

From what I know of this forum, there are a lot of pretty smart guys and gals here and I have learned from them. Most are a lot smarter than me in many areas. (OK, that may not be much of a compliment.)

FWIW, here is how I control and manage my CC spending.

Suppose I charge $400 for new tires on my 2% cashback card. When I return home from the tire store, I go to my bank's online site and immediately tell them to withdraw $400 from my checking account and send it to the credit card bank. Basically, it's like paying cash but I get an $8 discount. Of course, I make a mental note of my checking account balance. That mental note keeps me from accidentally overspending.

As I spend money on various little things - $5 here, $12 there, $7 at the other place, then I total up the small amounts every few days and make the payment to the credit card bank. Again, I make a mental note of my checking account balance.

Of course, with online banking I can check my account balance at any time if I have concerns about what is available to spend.

Next quarter my Discover card is giving me back 5% on groceries. In my home that is nothing to sneeze at.

 

[SmallCityDave]

It says a lot that as a financial guy, he misrepresents this basic and important financial concept to his audience, to make revenue for himself.

I'm not sure he misrepresents I have a feeling he gets 12% on a regular basis but most probably don't.

Debt is a tool, it exists out there, people ought to be taught how to use it, and recognize when it can be used to their advantage. My point is he gets the wrong word out. Going back to an analogy, it's like saying instead of taking a safe driving course, just don't drive - it's dangerous.

Debt can be a tool unfortunately most people don't know how to use that tool.

Yep, that's the DR spiel that is a bit insulting and a bit snarky, and worse - not helpful to his listeners.

It does not take much in the way of 'smarts' to realize the advantages of a credit card. I get 2% to 4% back on every dollar use it for, no annual fees. I use it for as many purchases that I make as I can - yes, that adds up. Why would I throw those rewards away? In what world would I be better off w/o that extra 2%-4%? That's not being financially responsible. And it is more important to people with less means than I have - they really could use that extra few %.

Unfortunately all too many people fall into the trap and instead of making a couple percent they end up paying a much higher price.

In addition the CC provides some protections, there is a grace period, so that gives you a little time to arrange the funds to pay it off - it doesn't hit your bank account instantly like a debit card. That allows me to keep a bit more money invested and working for me, instead of as a buffer in my checking account.

Same protections as a debit card.

And like so many others, I don't spend a penny more - that's because I understand that money is money, the source is irrelevant. It's not rocket science. I buy something because I need it, or have decided it is something I want, has value, and that I can afford it. So I use the source that works the best, and that is almost always credit cards. Cash can be lost, you need to take it out ahead of time (less money working for you). If having a card versus cash affects how you spend - that should be addressed, so that you can take advantage of the CC.

I have a feeling that most people that spend more using a cc think that they don't.

Same with a mortgage - in a recent thread, I realized I'm over $50,000 ahead just from a re-fi of my mortgage in 2002, rather than paying it off. That's some real dough. And even if I did it at exactly the worst time for stocks in that period, I was only short a few dollars.

There is no connection there - this is the kind of illogical, unhelpful thinking DR gets into. I recall this was another part of DR's spiel - a DR fan pointed me to one of his videos, DR says something like "I never met a wealthy man that says it was CC rewards that were what made him rich". Well, I'm not claiming that either, it is a silly claim, totally irrelevant - but it sure helps me financially. It all positive, why would I reject this?

Illogical - a person could do well/poorly with investing, and use/not-use credit cards. There's no point in that question. I make thousands from CC and mortgage debt in addition to good investing. It's not either/or, and there is no reason not to do both. Why would you say "just so" I can make thousands off the CC companies? Isn't that reason enough? Again, this isn't rocket science - I buy & hold broad based index funds, and make sensible purchases with whatever money form makes the most sense.

The fact that you ask these questions this way is a sign you are caught up in DR's irrational thinking. He loves to paint these CC companies as 'snakes' or evil or something. It's crazy. Like a few of us said earlier, you are better than this, think on your own, DR will hold you back.

I do believe in what he teaches and it's worked well for me (perhaps even better than your cc cash back?).

It was! And to you and yours!

-ERD50

See above.

 

[SmallCityDave]

From what I know of this forum, there are a lot of pretty smart guys and gals here and I have learned from them. Most are a lot smarter than me in many areas. (OK, that may not be much of a compliment.)

FWIW, here is how I control and manage my CC spending.

Suppose I charge $400 for new tires on my 2% cashback card. When I return home from the tire store, I go to my bank's online site and immediately tell them to withdraw $400 from my checking account and send it to the credit card bank. Basically, it's like paying cash but I get an $8 discount. Of course, I make a mental note of my checking account balance. That mental note keeps me from accidentally overspending.

As I spend money on various little things - $5 here, $12 there, $7 at the other place, then I total up the small amounts every few days and make the payment to the credit card bank. Again, I make a mental note of my checking account balance.

Of course, with online banking I can check my account balance at any time if I have concerns about what is available to spend.

Next quarter my Discover card is giving me back 5% on groceries. In my home that is nothing to sneeze at.

I generally try to have a few $100 bills in my wallet it can be painful trying to break one so half the time I change my mind on whatever small item I had intended to buy, that's my 100% cash back plan.

 

[ERD50]

See above.

Embedding your answers in my quote makes a reply difficult. The above is all I get when I quote you.

Tip - to reply to several items, copy/paste the original quote several times, then delete the extraneous sections.

.... I'm not sure he misrepresents I have a feeling he gets 12% on a regular basis but most probably don't. ...

Well, you seem to be contradicting yourself there, but more importantly, for your own financial health/awareness - if you think he is getting 12% Compound Annual Growth Rate (the only measure that matters, so the only number worth mentioning), then you need to dig deeper and learn about that (he's not).

https://www.investopedia.com/terms/c/cagr.asp

.... Debt can be a tool unfortunately most people don't know how to use that tool. ...

That may be true, but that's part of my point. If you want to excel (or even just do better than average) in managing your personal finances, don't concern yourself with what other people may or may not do. Learn how to excel.

There are often threads on this forum about how the average person is not prepared financially for retirement. So should we let that affect our actions towards saving/investing for retirement? Should we do what they do? NO! We set some goals and try to figure the best way to get there.

....Unfortunately all too many people fall into the trap and instead of making a couple percent they end up paying a much higher price. ...

Don't do that. As I said, you can be better. It's simple - don't buy anything that you have not thought about in terms of real needs/wants/value. Pay off the card each month. Collect rewards.

.... Same protections as a debit card. ...

That's not true. Look it up.

.... I have a feeling that most people that spend more using a cc think that they don't. ...

You probably know the answer by now - if most people do that, don't be one of them.

....I do believe in what he teaches and it's worked well for me (perhaps even better than your cc cash back?).

And if you want to do even better, learn to use debt as a tool. Take advantage of opportunities. Time to take off the training wheels?

-ERD50