And, [Dave Ramsey] tells people to expect 10% returns on their equities.
It was 10 - 12% the last time I listened to him. Also, he makes no allowance for fees, expenses, or inflation whatsoever. He just says, "Save $20/month from age 18 to age 70, and you'll have a million dollars!"
#1, that assumes a steady 12% return for 52 years.
#2, as mentioned, it makes no allowance for fees or expenses.
#3, who wants to work until they're 70?
#4, what's $1MM going to buy in 2068?
The worst part is, I believe it breeds the opposite of what he's trying to accomplish. By using such insanely inflated rates of return, people will listen and think to themselves, "Geez, if $20/month will get me a million, I don't need to start investing yet, I've got plenty of time, I don't need an entire million. I'll spend my money now, and start investing later. I'm sure half a million will be more than enough for me."
Drives me nuts. His "get out of debt" advice is OK, but his investing advice is completely horrible.