Ramsey made me think twice... $3.5M PF earning 100k/yr...

[Aggie1999]

Cringe worthy....

"Many investors hate the idea of paying around 5% of their investment for up-front commission. But there are a couple of reasons front-end load funds might be a good idea, especially for retirement planning. First, it’s a one-time expense, so the value of your investment grows without being bogged down by expensive fees. And second, as your investment increases in value over time, the commission has less impact on the overall cost of owning the fund."

Everything You Need to Know About Investment Fees

Investment fees cover some important costs to ensure your money is invested well, but those same fees can also negatively impact your savings over time.

www.ramseysolutions.com

 

[Out-to-Lunch]

Cringe worthy....

"Many investors hate the idea of paying around 5% of their investment for up-front commission. But there are a couple of reasons front-end load funds might be a good idea, especially for retirement planning. First, it’s a one-time expense, so the value of your investment grows without being bogged down by expensive fees. And second, as your investment increases in value over time, the commission has less impact on the overall cost of owning the fund."

Everything You Need to Know About Investment Fees

Investment fees cover some important costs to ensure your money is invested well, but those same fees can also negatively impact your savings over time.

www.ramseysolutions.com

Ooof.

 

[ERD50]

Cringe worthy....

"Many investors hate the idea of paying around 5% of their investment for up-front commission. But there are a couple of reasons front-end load funds might be a good idea, especially for retirement planning. First, it’s a one-time expense, so the value of your investment grows without being bogged down by expensive fees. And second, as your investment increases in value over time, the commission has less impact on the overall cost of owning the fund."

Everything You Need to Know About Investment Fees

Investment fees cover some important costs to ensure your money is invested well, but those same fees can also negatively impact your savings over time.

www.ramseysolutions.com

Woah! Now there's some twisted logic from Dave Ramsey! I'd love to see any fund that overcome a 5% load with lower ongoing fees, since you already took the hit (a built in, guaranteed SORR!), and fees on the major index fund/ETFs are so low.

 

[Texas Proud]

Holy Moly!!

I cannot see getting expenses lower than the low cost (and even no cost at some brokers) funds out there...

No reason to pay someone 5% upfront...

 

[Rich]

I listen to DR for the human interest the program offers. He deals with mostly folks who are making fundamentally bad life as well as financial decisions. His oft repeated statement, that financial problems are basically behavioral problems I certainly believe is correct.

Such as people who earn $50K a year buying a $50K car. Carrying years of credit card debt only paying the minimums. And let's not forget the great scam of student loans. All are examples of poorly thought out behaviors.

Our nation is evolving into a population of de-facto indentured servants. This is independent of a person's race, ethnicity, or political beliefs. The "system" seems designed to keep people embroiled in perpetual debt. We are taught that "we" deserve that car/size home/vacation at Disney. Independent of whether or not we can actually pay for whatever it is we lust after.

And in listening to DR's comments he seems to speak to such things on a regular basis.

Rich

 

[COcheesehead]

The "system" seems designed to keep people embroiled in perpetual debt. We are taught that "we" deserve that car/size home/vacation at Disney. Independent of whether or not we can actually pay for whatever it is we lust after.


Rich

And yet there are others in the same “system” who don’t make these stupid decisions.

 

[Rich]

And yet there are others in the same “system” who don’t make these stupid decisions.

Sure, such as the folks you find on this forum. None the less the degree of ignorance which most people demonstrate in regard basic financial decisions is unsettling. You won't find many of them here in Early Retirement.

Rich

 

[Diogenes]

The new 4% rule is 4.7%. At age 68, I'd round up vs down, personally. ...

On a personal note, age-68 is so far into the future, that I can't honestly fathom how I'd relate to money in that distant future. Perhaps then, even 4.7% would come to feel like excessive parsimony.

Only about 2.5% of households in this country have a portfolio of this size. If this isn’t enough, what exactly is the other 97.5% supposed to do?

The vast majority of Mankind does one or more of the following:
1. Rely on benefits such as SS or pensions.
2. Rely on their children or other kinfolk for assistance.
3. Spend-down their resources.
4. Substantially reduce spending if/when their resources dwindle.

Here in our group, I would not be remiss in asserting, that we're mindful of the long-term vitality of our portfolios. Sure, some aim for "die with zero", and few are as fastidiously obsessed as me, with growth for growth's sake. But most of us aim for some kind of stability, where if the portfolio is spent-down, that happens very gradually. This is fundamentally a question for those who are already affluent, if not outright wealthy.

In other words, the question is less about "how do I fund my retirement", than "how do I manage my wealth".

Wait, so you have been listening to him for 30 years, and he claims there are "good" funds that outperform the S&P, and get 12% average returns, but he doesn't tell you what they are?

I'd be surprised if there are ANY funds anywhere on the planet - regardless of what type, who manages them, or how - that have outperformed the S&P 500 consistently for 30 years, and have averaged 12% CAGR for 30 years. As the talk-show hosts say these days, prove me wrong!

 

[target2019]

There are a series of controversies about Dave Ramsey.

1. questionable financial advice

2. paid endorsement scandals

3. workplace discrimination lawsuits

4. toxic company culture.

Ref: https://www.perplexity.ai/search/explain-the-dave-ramsey-contro-1r4VjjgBSLi1l874K_oIdw#0

I vaguely recall listening to DR on the radio a very long time ago. I would have just shrugged at a mention of his name before this E-R thread came along. Now that I see a greater cult fabric around him, he's toxic enough at this stage of his life that I'll steer clear. His investment advice seems tainted, and very suspect.

Has he helped desperate people? Sure, but so has the Catholic Church! Diocese of Camden reaches $180 million settlement with sexual abuse survivors

 

[Oakster]

I just remembered Ramsey used to say 12% was a no brainer using “good mutual funds”.

Is that not basically true? You can find a lot of mutual funds that average 12% over a 10 year span or more.

 

[mrfeh]

Is that not basically true? You can find a lot of mutual funds that average 12% over a 10 year span or more.

No, that's not true.

The last 10 years are not representative of long term.

 

[target2019]

Is that not basically true? You can find a lot of mutual funds that average 12% over a 10 year span or more.

Which ones are still open after the next 10 years

 

[Oakster]

While an assumption of a 10% portfolio return is not completely batsh*t crazy, it's a bit aggressive and Dave's advice, in my opinion, ignores sequence of returns risk.

Historically, I believe he's advocated withdrawal rates of up to 8% given a 10-12% portfolio return assumption.

Made we wonder if I met with someone in his network of financial advisors if they'd advocate similarly - somehow, I doubt it.

To be fair, Dave doesnt really "intend" give investment advice. He helps people to get out of debt and manage his money. He is pretty basic, telling folks to invest in a mix of mutual funds with a long term history of earning more than 10% or 12%. Its more a place holder for those who are not money educated to help them have a place to put there money. From what I remember on withdrawal, he doesnt tell you how to make your retirement money last, because he isnt a retirement investor. He just tells you that you can expect an average of 10% or more from your funds, so $3.5 million could throw off $350k a year (on average). With that basic statement, you wouldnt have anything to spend on a down year.....

 

[Oakster]

No, that's not true.

The last 10 years are not representative of long term.

The average yearly return of the S&P 500 is 10.445% over the last 100 years, as of the end of December 2025. - From google

 

[COcheesehead]

Dave’s a debt counselor at best. Nuf said.

 

[mrfeh]

The average yearly return of the S&P 500 is 10.445% over the last 100 years, as of the end of December 2025. - From google

10.4 < 12

And investing 100% in the SP500 is not recommended. Retire in the wrong year and you're eating cat food.

 

[Oakster]

Wait, so you have been listening to him for 30 years, and he claims there are "good" funds that outperform the S&P, and get 12% average returns, but he doesn't tell you what they are? So even an admirer would say that his claims are not testable? But we should NOT dismiss him as a mere entertainer?

He tells you to use your investment software and select them based on that criteria. That isnt too hard is it? I just used AI and it brough up a few that have 30+ years at over 12%. He definately does not tell you which ones, or even what company or brand. He doesnt even do retirement advice (unless it has changed in the last 5 years or so). He helps people get out of debt that cant stop spending and helps those who do not understand money at all.

 

[COcheesehead]

He definately does not tell you which ones, or even what company or brand.

As I mentioned up thread he definitely has talked about American funds.

 

[mrfeh]

He tells you to use your investment software and select them based on that criteria. That isnt too hard is it? I just used AI and it brough up a few that have 30+ years at over 12%.

You are making the classic mistake that past performance indicates future returns.

Looking backwards is always 20/20.

 

[JohnnyPHX]

There are a series of controversies about Dave Ramsey.

1. questionable financial advice

2. paid endorsement scandals

3. workplace discrimination lawsuits

4. toxic company culture.

Ref: https://www.perplexity.ai/search/explain-the-dave-ramsey-contro-1r4VjjgBSLi1l874K_oIdw#0

I vaguely recall listening to DR on the radio a very long time ago. I would have just shrugged at a mention of his name before this E-R thread came along. Now that I see a greater cult fabric around him, he's toxic enough at this stage of his life that I'll steer clear. His investment advice seems tainted, and very suspect.

Thanks for that link to Perplexity. Really nice summary of some of the issues with Dave Ramsey. Sad to hear he is not the person we thought he was.
We used to listen to him back around 2007-10 or so and he inspired us to focus on getting out of all debt. His debt free scream calls on Fridays were very motivational. We didn't follow his get out of debt snowball plan exactly. Some may need those small wins by paying off their lowest balance first but we were disciplined enough to pay off the highest interest debt first. We didn't have a large amount of debt or a big mortgage balance but after the economic meltdown and threats of layoffs we didn't want to be in that position ever again. It felt really good when we buckled down and attacked it all and got it paid off. Some may disagree with paying off the mortgage early but for us being totally debt free is a pretty awesome feeling.
Somewhere along the way he got less compassionate and more arrogant. He really pushed his endorsed local providers and totally dismissed index funds. IMO he got very defensive when someone tried to disagree with his Investing advice. It was his way or the highway on most everything so we eventually tuned out. I feel like greed got the best of him.

I continued the conversation you started above with Perplexity and to sum it all up. He is\was motivating for many people in debt, but I would not rely on his investment guidance for a serious long term financial plan. Monetizing advice heavily while defending flawed assumptions like 12% returns, 8% withdrawals risk long-term outcomes.

 

[jazz4cash]

Cringe worthy....

"Many investors hate the idea of paying around 5% of their investment for up-front commission. But there are a couple of reasons front-end load funds might be a good idea, especially for retirement planning. First, it’s a one-time expense, so the value of your investment grows without being bogged down by expensive fees. And second, as your investment increases in value over time, the commission has less impact on the overall cost of owning the fund."

Everything You Need to Know About Investment Fees

Investment fees cover some important costs to ensure your money is invested well, but those same fees can also negatively impact your savings over time.

www.ramseysolutions.com

Describing this as “Cringe worthy” is being kind

 

[jazz4cash]

Is that not basically true? You can find a lot of mutual funds that average 12% over a 10 year span or more.

So if you only need 10 years of income it should not be a problem to take 12%. But SP500 did not earn 12% in 22. 18, 16,15, 11, 8, 7, 5,4, etc. Using average annual return to determine a withdrawal rate is risky, esp if you need to fund more than 10 yrs. Since GFC many consider these returns to be outsized so we’re looking back about 100 yrs. Very conservative.

 

[Anchors Aweigh1]

Not a Dave Ramsay fan for a few reasons but randomly stumbled on a recent segment from his show that resonated with me.

A guest called in my age range- mid 60s - states he has 3.5M in assets - still works - and questioning whether he can retire. The guy claimed his work income at 170k/year.
Dave's bottom line is, with those assets, he should 'easily 'be earning 350k/year off the PF alone. Double his work income, doing nothing so, no-brainer. Retire.
Dave casually suggests being mostly invested in 'growth mutual funds' to get that return and that "rarely has the market ever" seen under 5% return. "Maybe 2 years.."

I'm sitting at about 3.5M, age 68 next month. Still working and self-employed but
not pulling in an attorney's salary - more like 40k as a freelancer. Could be 100k+
but i don't want to work that much anymore.

Dividend income generated by my 50/50 AA PF ranges about $105-110k a year in the last few years. I still work some because i can take it or leave it and not stress about it. I also feel less stress having an allocation that's moderate, not all-in on growth funds - which apparently is way conservative in Dave's eyes, with his kind of presumptuous smug assurance that the dude is gonna make 350k/year off a 3.5M
PF and that's that.

I don't feel like tolerating a lot more risk..which to me, his default-recommendation assumes.
My question being...is 100k/year with a 3.5M/year PF overly protective. Should i consider a slightly more aggressive position. I'm not extravagant, COLA is low...
I own my modest 250k house, have no debt. I'll get an SS income of 34k/year if i take it this year, maybe 40k at 70 FWIW. My inclination is take it this year and invest most of it.

I think i'm ok in any event...this just made me question what backs up his slam-dunk certainty of 10% a year...and that anything less than 5%/year in an all-growth fund PF is a foolish expectation.

Your first five words says it all…..but your numbers look fine

 

[joejetski]

Not a Dave Ramsay fan for a few reasons but randomly stumbled on a recent segment from his show that resonated with me.

A guest called in my age range- mid 60s - states he has 3.5M in assets - still works - and questioning whether he can retire. The guy claimed his work income at 170k/year.
Dave's bottom line is, with those assets, he should 'easily 'be earning 350k/year off the PF alone. Double his work income, doing nothing so, no-brainer. Retire.
Dave casually suggests being mostly invested in 'growth mutual funds' to get that return and that "rarely has the market ever" seen under 5% return. "Maybe 2 years.."

I'm sitting at about 3.5M, age 68 next month. Still working and self-employed but
not pulling in an attorney's salary - more like 40k as a freelancer. Could be 100k+
but i don't want to work that much anymore.

Dividend income generated by my 50/50 AA PF ranges about $105-110k a year in the last few years. I still work some because i can take it or leave it and not stress about it. I also feel less stress having an allocation that's moderate, not all-in on growth funds - which apparently is way conservative in Dave's eyes, with his kind of presumptuous smug assurance that the dude is gonna make 350k/year off a 3.5M
PF and that's that.

I don't feel like tolerating a lot more risk..which to me, his default-recommendation assumes.
My question being...is 100k/year with a 3.5M/year PF overly protective. Should i consider a slightly more aggressive position. I'm not extravagant, COLA is low...
I own my modest 250k house, have no debt. I'll get an SS income of 34k/year if i take it this year, maybe 40k at 70 FWIW. My inclination is take it this year and invest most of it.

I think i'm ok in any event...this just made me question what backs up his slam-dunk certainty of 10% a year...and that anything less than 5%/year in an all-growth fund PF is a foolish expectation.

If your $3.5M can earn 4%, that is $140k. It depends on what you need. I would set up your portfolio to generate what you need after you stop work.

 

[dickoncapecod]

If your $3.5M can earn 4%, that is $140k. It depends on what you need. I would set up your portfolio to generate what you need after you stop work.

@mikes425
1. Okay, I'll just say it with no sugar coating: professional traders and investors and even finance academics think Dave and Suzie and their ilk are laughing stocks.
2. Relying on equity markets FOR INCOME is a risky poor choice. Equities are (historically usually) GREAT for investors willing to bear additional risk in hopes of growth / capital gains ---- but that is not an income strategy.
3. Bonds and bond-like assets like preferred stocks are the foundation of lower-than-equity risk INCOME strategies. Right now Longer dated TREASURYS yield 4,25% to 4,75%. 5yr BBB corporates yield about 7.75% --- and strong preferreds yield just a bit less.

ANY credible financial advisor (from a major firm) can create a high quality INCOME portfolio yielding 7-8%. You can also dial up risk and Ean 11+% with well-run closed end fixed income funds. Consider doing some exploring...
Regards, Dick