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Old 06-29-2021, 06:12 AM   #21
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If I were a young twit with debt and no real plans on how to get financially healthy, either Ramsey or Orman would be a helpful guide to get better. But beyond that...

Ramsey's advice also links a religious aspect to finances, which might not appeal to some.

Bottom line, all these folks are here to entertain and make money off their audiences.
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Old 06-29-2021, 07:07 AM   #22
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Originally Posted by jollystomper View Post
Dave Ramsey's approach in terms of getting out of debt and starting savings is appropriate for the majority of people in the U.S. If one looks at the numbers for the "typical" American household in terms of debt, credit card debt, and savings, one can understand his popularity. While I do not agree with his investing advice, I have listened to his shows during long drives, and rare is the caller that asks about investing, they are dealing with spending and debt issues. ....
Yes, but I've listened to his show while in the car, and I feel he gave very bad advice to someone who was in this position.

He is so hard-core on this whole "debt free" mantra (they actually do some sort of chant, like a cult - from his web site: "What is a debt-free scream? - Yes, it’s really a scream. Or a shout, or a chant, or whatever suits your style"), that people make bad decisions to get out of debt "at all costs".

I forget the details, but this couple was so anxious to get out of debt, they sold their home (that they admittedly really couldn't afford) at fire sale prices, just to get out. They bought a much cheaper home in a bad neighborhood with bad schools for their kids, just so they could pay off that mortgage quickly. And some other bad decisions. All this was cheered on, because they were getting out of debt (they only thing that matters to DR).

They should have taken their time to get the top buck for their house, buy a nicer place but still well within their budget with a mortgage payment they could afford. Build up an emergency fund and start a solid, simple investment program.

But no, you just gotta get debt free! I really, really dislike DR, even for the people who need his sort of help.


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... Now, little of his approach applies to this "esteemed" group because, frankly, the vast majority of us here are rich. ...
And just because most of us don't need his advice, doesn't mean we can't critique whether it is good advice for the kind of people who do need it (some of us are in the "been there done that" camp). Just because I'm not starving doesn't mean I can't recognize that a starving person is in need of food. It is possible to evaluate things outside of our personal experience.

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Old 06-29-2021, 07:29 AM   #23
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Yes, but I've listened to his show while in the car, and I feel he gave very bad advice to someone who was in this position.
Understand, but like any other advisor, he is not going to give perfect advice to every single person, I can find examples like that from any advice giver even ones here . It can be easy to expect perfection from those of differing views .

The funny thing is, in the example you cite, I have known people who have chosen to move back to what others deem as "bad" neighborhoods and found it worthwhile in the long run. Sometimes "bad" was based on the predominant ethnicity in the neighborhood, sometimes the "bad" neighborhood was going through a transition that in 10 years it became a "good" neighborhood.

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And just because most of us don't need his advice, doesn't mean we can't critique whether it is good advice for the kind of people who do need it (some of us are in the "been there done that" camp). Just because I'm not starving doesn't mean I can't recognize that a starving person is in need of food. It is possible to evaluate things outside of our personal experience.
True, but I recognize a starving person does not need my steak to start being satisfied, and is better starting out with a level of food they can afford .
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Old 06-29-2021, 07:31 AM   #24
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True, but regardless, it isn't good advice!
I was trying to be diplomatic.


I think Dave's advice for getting out of debt - live below your means, cut out all unnecessary spending, prioritize the spending for the money you've got to work with, and put every extra penny toward the debt - is all generally okay (with some exceptions as you've noted).


His investing advice is simply awful, often outright wrong, and dangerous.


If folks are really struggling with budgeting and overspending and debt, his system can and does work, but once you're back on track, you need to move on to much better advice.
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Old 06-29-2021, 07:47 AM   #25
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Understand, but like any other advisor, he is not going to give perfect advice to every single person, I can find examples like that from any advice giver even ones here . It can be easy to expect perfection from those of differing views .
... .
I'm not holding DR up to the standard of perfection, you are moving the goal posts.

I think much of his advice is just plain BAD, even for (especially for in some cases), his intended audience.

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Old 06-29-2021, 07:50 AM   #26
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I have taken the course, mainly in order to cherry pick advice to help young people. His baby steps are great. His target audience is most of America (living beyond their means). He has helped millions learn to avoid debt and begin to save.

For investing advice other sources of info are better, but he has been very successful for good reason.
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Old 06-29-2021, 08:18 AM   #27
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I'm not holding DR up to the standard of perfection, you are moving the goal posts.

I think much of his advice is just plain BAD, even for (especially for in some cases), his intended audience.

-ERD50
I'm not moving any goalposts; perhaps you moved to the wrong field .

Some of his advice is not good. Which applies even to Warren Buffett. But I think a lot of it, in the context of where the majority of Americans - even the example you cited - is worth listening to. Of course, if the majority of American did not need that advice, many of us would not be in our "rich" position .

I grew in in the midst of folks who, had his advice been available *and* accessible back then, would have been much more of a help than hindrance to them. Perhaps it is just the social classes we hang out in.

But, we'll just agree to disagree on this point .
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Old 06-29-2021, 08:38 AM   #28
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I've listened to Dave Ramsey. I've listened to Suzy Orman. I've listened to various other financial "gurus". On occasion, I have heard every single one of them make mistakes and say things that were just plain wrong. Not things I personally disagreed with but information or advice that was factually incorrect.


I think with any financial advice, whether from TV or radio or internet forums or books or CFPs or wherever, it's always buyer beware. Take in all of the information and then do your own research to confirm it and make sure it applies in your situation. Check with your tax preparer. Run it buy some other knowledgeable folks. Don't just blindly follow the advice without doing your due diligence.


Dave Ramsey helps people. Suzy Orman helps people. David Bach helps people. There is knowledge to be gained from all of those sorts of people, but that doesn't mean that any of them have the ultimate answer or that everything they propose is the right way to go.
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Old 06-29-2021, 09:00 AM   #29
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Hi,



Whats your experience or thoughts with the Dave Ramsey approach to investing and debt repayment?



I think the 7 baby steps approach is sensible, however I dont know enough about credit scores (Im from the pacific islands) to understand why alot of people disagree with his stand on credit cards.


I like his advice. I have invested the way he suggests, and that has been working well for me for over ten years now.
I still own credit cards, which always get paid off every month, because I have the financial discipline to do so. Most people do not have financial discipline, so they need artificial “nannies” to remind them not to go over certain limits. That is the idea behind his “envelope” system etc.
Retiring early has been a goal of mine, so saving comes naturally for me.
One thing to note that he also reminds people of (and this is important).
When you finally do make it, learn to SPEND some of it and enjoy it. Far too many forget that part once they arrive..
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Old 06-29-2021, 10:56 AM   #30
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I've only watched some U-Tube clips my wife sends me. His target audience is clearly the spend-a-holics that need motivation, a no-debt credo, a sense of community and the strong leader schtick that he presents in order to change their behavior. To the extent he helps those folks, he's a force for good.

I accidentally had the AM radio on the other day and there was some huckster program trying to convince me that option writing was a risk free path to wealth if I just bought their super secret method. I turn on the TV news for old folks and get ads telling me that silver is the path to riches (If it's down it's due to go up, up up!. If it's up, you're missing out!). At least Ramsey's recipe is not actively toxic like those things.
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Old 06-29-2021, 11:07 AM   #31
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I had my kids read the Dave Ramsey stuff when they first went out on their own and the pay off debts, limiting new debts, and budgeting ideas were the main gains for them. They too saw the trap that easy spending with credit cards can lead to.

I also liked his rule of thumbs about what was an appropriate amount to spend percentage wise of your income for things like housing, cars, insurance and the like.
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Old 06-29-2021, 01:13 PM   #32
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I have taken his classes and taught a few. As others have said, his target audience doesn't tend to be this board and aren't those that already know how to handle debt and investing wisely. His plan helps those that have dug such a deep hole that they need extreme measures or they might never build wealth or retire with dignity. At 45 I got re-married. My wife and I had 12 credit cards between us, two car payments, and most of our money went to service debt. We had about 30K in retirement and almost no savings.


13 years later, two paid off cars, plenty in savings, 400K house is almost paid for (no other debt), very nice retirement accounts, and we are almost ready to FIRE.


While I agree that you should get your investing advice elsewhere, his advice and tools for getting out of debt so you can be on the road to build wealth were a game changer for us.
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Old 06-29-2021, 02:07 PM   #33
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20 years ago, I only had access to his show on radio for a "plan". Baby steps is an accurate term as once you mature financially, you move on to the meat of finances.

I still think his earlier book is great for the early years of learning. Easy to read and retain. After a year of listening, you will be listening to the same old stories. My only thoughts against his teaching is on credit cards. I spend on my needs and very few wants, so we have this under control vs his stating them being the devil.
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Old 06-29-2021, 04:18 PM   #34
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I don't know much about Dave Ramsey, but if he contends that all debt is bad, then he is wrong. Borrowing to buy a house, to start a business or to obtain a useful education is, within reason, a good use of debt. That said, encouraging people to avoid consumer debt is fine, as is encouraging people to pay off even good and necessary debt. But not at ALL costs.
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Old 06-29-2021, 04:39 PM   #35
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I don't know anything about Dave Ramsey and don't want to. I've seen Suzie on TV once and once was enough.

Entertainers they are. Show biz people. Like Rush Limbaugh. Once was enough for him also.
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Old 06-29-2021, 05:15 PM   #36
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I agree Ramsey's explanation why credit system is doing nothing to our wealth building. Most people got into high interest debt after they start using credit cards. The minority population that use credit cards responsibly and take advantage of the rewards becomes free advertising tool of credit card companies and it is just that. Now many people consider high credit score is part of the wealth but that is totally not true. High score means it is easier for you to borrow money, get a rental, or sign up for a Internet service provider. All of them gives the vendor an impression on how responsible you are to pay them back, it has nothing related to wealth building.

At the end of day credits is a culture that keep most people from reaching their financial goal and keep those credit card companies take advantage of the less informed and undisciplined.
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Old 06-29-2021, 05:46 PM   #37
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I don't know much about Dave Ramsey, but if he contends that all debt is bad, then he is wrong. Borrowing to buy a house
He is not opposed to mortgages. If I recall correctly, he recommends your payment not exceed 25% of income. It's been a while since I listened to him though so someone can correct me if I'm remembering that wrong.


He is 100% against any other debt at all.
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Old 06-29-2021, 05:49 PM   #38
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I agree Ramsey's explanation why credit system is doing nothing to our wealth building.
He calls the credit score the "I love debt" score and he's not wrong. So many people worship the FICO score and do really toxic things to try and raise it, like purposely carrying a balance on their credit cards (at high interest) just so they can build a track record of making payments on time in an effort to boost their scores. People even take out loans they don't need just to polish their credit record and increase their scores.


As we all know, your FICO score says absolutely nothing about how well you're doing financially, what your net worth is, or anything else. It simply measures how you handle debt.
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Old 06-29-2021, 07:00 PM   #39
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I tend to follow Garrett Gunderson's approach to finances and life
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Old 06-29-2021, 09:20 PM   #40
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These financial advisors are like weight loss programs, most preach about the same thing but it resonates with some and not others.

I'm not a fan but I can appreciate that he gets a lot of people to actually put together a budget and while his debt methodology isn't the best solution financially, it may be the best solution for many mentally. Given he seems to target those that have decent incomes but overspend, he has a good demographic that are most likely to succeed if they put any effort in whatsoever and they have the income to be able to afford his program.
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