Dave Ramseys's babysteps

[redskinsfan92]

I was listening to some Dave Ramsey videos on Youtube. He was talking about getting completely out of debt, savng up an ernergency fund, etc. Some 7 step plan. Numbers on it seem a bit outdated. Have any of you heard of him? Thoughts?

He seems to be completely against car loans and buying new cars unless your net worth is a million.

 

[Spaz]

You guys need 2 stop listening to YouTube and start living for a change. Take some risk. It's part of the learning curve.

Grow some balls.

Everyone takes loans, even America takes loans. It's normal provided you can service those loans and taking loans frees up extra disposable income for other investment.

 

[R.U.G.]

Dave Ramsey is good for getting out of debt and setting up a budget; not much else. I am against leasing as well, so I buy my cars and run them into the ground; which he supports. However, he doesn't support, and I agree, is when people re-up and get a new car every 2 or 3 years. His stats on market growth are incorrect as well. He states around a 12% average return without dividends over the last 50 years or so. However, it's more like around 7% w/o dividends.

Ramsey made his money in selling books and getting the churches to back him with Financial Peace University. He also owns loads of real estate around the US. He actually went bankrupt due to over leveraging real estate.

Most people do not know how to handle finances, so he's steps do work. However, in order to grow your investments, you really only need three funds; but at different weights. Total Bond Fund, Total Stock Market Fund and an International Fund. If you want to have a mad money fund, that's cool too.

 

[spinich]

His methods have become just a giant money making scheme for him. I hate the religious overtones in his presentations. He can be condescending at best. It is easy to make money when you have money. Duh. What is frightening is the cult status he has developed using the evangelical network to do his advertising. You have to give him credit (bad pun) however he is a salesman and markets well. Rest of his diatribe is basic common sense. Don't go into debt if you can't use that debt to make more money. Like, don't buy a Lambo by refinancing your house! Lots of stupid people in this world making other people rich. Ramsey has taken advantage of that fact.

 

[speed dawg]

Dave Ramsey is good for getting out of debt and setting up a budget; not much else. I am against leasing as well, so I buy my cars and run them into the ground; which he supports. However, he doesn't support, and I agree, is when people re-up and get a new car every 2 or 3 years. His stats on market growth are incorrect as well. He states around a 12% average return without dividends over the last 50 years or so. However, it's more like around 7% w/o dividends.

Ramsey made his money in selling books and getting the churches to back him with Financial Peace University. He also owns loads of real estate around the US. He actually went bankrupt due to over leveraging real estate.

Most people do not know how to handle finances, so he's steps do work. However, in order to grow your investments, you really only need three funds; but at different weights. Total Bond Fund, Total Stock Market Fund and an International Fund. If you want to have a mad money fund, that's cool too.

Get the story straight. You are correct, but you are fudging the details.

He did get rich on real estate by taking out a bunch of loans. Then he went broke. He built his wealth the second time by using no debt. He lived his baby steps and there are numerous people out there that can verify this.

His steps work. I did them. They are like a parabola, very slow growth (if not painful) at first, then as you get into step 7 it takes off like a rocket.

And yes, his stuff is common sense, like most life coaching schticks. But if it's so "common", why isn't everybody doing it?

 

[R.U.G.]

Get the story straight. You are correct, but you are fudging the details.

He did get rich on real estate by taking out a bunch of loans. Then he went broke. He built his wealth the second time by using no debt. He lived his baby steps and there are numerous people out there that can verify this.

His steps work. I did them. They are like a parabola, very slow growth (if not painful) at first, then as you get into step 7 it takes off like a rocket.

And yes, his stuff is common sense, like most life coaching schticks. But if it's so "common", why isn't everybody doing it?

My facts are straight. For many years I was an endorsed local provider by Dave Ramsey. So, with all due respect, I know a bit more than you about Dave Ramsey. When I sold the business, I was no longer part of the program. There wasn't anything negative I said; just pointing out facts.

Why isn't everyone doing it? Well, most people do not know about his program until it is to late. In addition, people get into this financial mess by listening to pop culture and not watching the bottom line. Financial literacy is not part of the school learning program in American schools (it is in many other countries though).

 

[speed dawg]

My facts are straight. For many years I was an endorsed local provider by Dave Ramsey. So, with all due respect, I know a bit more than you about Dave Ramsey. When I sold the business, I was no longer part of the program. There wasn't anything negative I said; just pointing out facts.

They obviously aren't. At minimum, you weren't pointing out the whole story. You led the OP to believe Ramsey did not make his money using his principles, when in fact, he did.

 

[R.U.G.]

They obviously aren't. At minimum, you weren't pointing out the whole story. You led the OP to believe Ramsey did not make his money using his principles, when in fact, he did.

Actually, you are mistaken again. He's used his principles to get out of debt, not make money. He's stated multiple times that the bulk of his assets are from income producing real estate. Don't quiz me on Dave Ramsey. I worked as an ELP for over 12 years.

 

[speed dawg]

Actually, you are mistaken again. He's used his principles to get out of debt, not make money. He's stated multiple times that the bulk of his assets are from income producing real estate. Don't quiz me on Dave Ramsey. I worked as an ELP for over 12 years.

Hahahaha now you're in defense mode, trying to clue in on a useless detail. His principles help build wealth. They obviously don't make money, genius, jobs and investing do that. And baby step 7 is investing.

You need to revisit your ELP credentials, hahaha. Or maybe you should go back to the beginning and retake Financial Peace, LULZ.

 

[R.U.G.]

Hahahaha now you're in defense mode, trying to clue in on a useless detail. His principles help build wealth. They obviously don't make money, genius, jobs and investing do that. And baby step 7 is investing.

You need to revisit your ELP credentials, hahaha. Or maybe you should go back to the beginning and retake Financial Peace, LULZ.

What ever you say buddy. Your post reminds me of something Dave used to say... You cannot fix stupid. They have to fix themselves.

 

[Poonani Maker]

I've liked his advice except on credit card(s). I believe an individual should have just One credit card and pocket the cashback points he gets from routine expenses (food, utilities, gas, random must-have repairs force everything on the credit card). He believes in Cash only. I say take advantage of those cashback points.

I have zero debt, but trying to make money in this 4-5 top-heavy stock market (Amazon, Apple, etc) is getting scary, only monopolies are "growing." SP500 just hit another "all-time" high last week. I believe in staying "liquid" thus high-interest rate savings accounts, lying in wait to pounce upon a crash the system worse than 2007. I will then buy Dividend stocks and foreclosed "property" should any of that be left from the bloodshed/chaos that is surely to come (just don't know when, maybe after Trump is gone). There is so much Fakeness (feminism, "equality," corporate politics to where nothing ever gets done that truly IS productive, government waste to the Hilt! - I saw one buy a coffee maker with taxpayer funds other day, this is MINOR what gets charged DAILY, rising taxes, inflation but stagnant wages (not me but others I'd assume)). It's all coming to a head, maybe in 5 years maybe less. Starvation, such an archaic word, may even be a word injected by into the dictionary.

 

[R.U.G.]

I've liked his advice except on credit card(s). I believe an individual should have just One credit card and pocket the cashback points he gets from routine expenses (food, utilities, gas, random must-have repairs force everything on the credit card). He believes in Cash only. I say take advantage of those cashback points.

I have zero debt, but trying to make money in this 4-5 top-heavy stock market (Amazon, Apple, etc) is getting scary, only monopolies are "growing." SP500 just hit another "all-time" high last week. I believe in staying "liquid" thus high-interest rate savings accounts, lying in wait to pounce upon a crash the system worse than 2007. I will then buy Dividend stocks and foreclosed "property" should any of that be left from the bloodshed/chaos that is surely to come (just don't know when, maybe after Trump is gone). There is so much Fakeness (feminism, "equality," corporate politics to where nothing ever gets done that truly IS productive, government waste to the Hilt! - I saw one buy a coffee maker with taxpayer funds other day, this is MINOR what gets charged DAILY, rising taxes, inflation but stagnant wages (not me but others I'd assume)). It's all coming to a head, maybe in 5 years maybe less. Starvation, such an archaic word, may even be a word injected by into the dictionary.

Nothing wrong with credit cards; if used wisely and paid off in full. I use them all the time and I have the banks pay me.

I receive 6% cash back on groceries (AMEX Blue Preferred)
I receive 5% cash back on utilities and restaurants (US Bank Cash Plus )
I receive 5% cash back on office supplies & cell (Chase Ink)
I receive 5% cash back on fuel (PenFed Platinum Rewards)
I receive 2% cash back on everything else I buy (Citi Double Cash & fidelity Visa)

Banks pay me, I do not pay them. People need to learn self control and restraint with spending. That is all.

For my emergency fund, one year emergency savings, I have it earning 2% daily compound interest from Popular Direct Bank - FDIC insured. The rest are in Vanguard funds.

Finance is not that hard. Just requires common sense; which is limited these days.

 

[redskinsfan92]

Been using his budgeting app for about 2 months now. Everydollar. It's helping me out quite a bit. Somehow just knowing where your money went helps. Makes you go to the grocery store and stop eating out.

 

[logicallefty]

I’ve took Dave’s intro class at a church a few years ago. I agree with his strategy in theory but in reality it won’t work for everyone. If you have a high income job and live in a low income home and can save your arse off I think for that person it’s perfect. But for the average person making $9.00/hr all it takes is one major breakdown on that 12 year old beater car Dave told you to buy and your emergency fund you’ve saved for the past year could be gobbled up in one bite. And you will be back to square one. I don’t think the average person could ever get ahead with his plan. But again someone who already makes decent money probably could .

 

[Poonani Maker]

I've been blowing money and don't sweat the small pennies and dimes like I used to. When you're flush, you don't sweat the small stuff. Even $200 or even $400 is small stuff to me now. Now, a $1500 plane ticket out of the US would kinda hurt. I need to get back to watching every penny and dime like I did when I was at a 4th of the wages I am now.

 

[R.U.G.]

I've been blowing money and don't sweat the small pennies and dimes like I used to. When you're flush, you don't sweat the small stuff. Even $200 or even $400 is small stuff to me now. Now, a $1500 plane ticket out of the US would kinda hurt. I need to get back to watching every penny and dime like I did when I was at a 4th of the wages I am now.

Unwise brother. You need to plan for the bad days that will happen sometime in the future. In this climate, I'd push the emergency fund to about a year. You can put that in T-bills, some muni bonds, high yield 2% savings account, or split it amongst all three. I do the later. When sh!t hits the fan again, you'd still be sitting pretty. All three were safe during the downturn. Why? Simple. In times of financial turmoil, there is safety in the US and some State and major city governments. Obviously, if one invested in Detroit, that wouldn't had been a good idea, but NY, NJ, DC, TX, WA, and several others were fine. I've never lost a time on any munis (aside from Puerto Rico). You should also have some cash set aside as well. Maybe a month or two of expenses in cash or cash equivalents (gold, silver, platinum). I also always buy around 20 American Silver Dollars PCGS certified each year. Should sh!t hit the fan, silver, gold, guns and ammo will be highly valued.

 

[Poonani Maker]

Well, I've already got those bases covered. 4.5 years of "emergency fund." 1.5 years of food n' water. The guns n' ammo asset has been solved for 7-8 years for me. Camping equipment, fire-making, water-filtering. The cashola is for fear times when everybody's sellin. Right now, everybody's buyin. I used to scrape and clip coupons everything but now I just see saving a buck as a waste of my time/mental effort/health. If I get ripped off on an Ebay sale even up to $650 I don't really get all that angry. I just say, "Welp, since Ebay's not helpin I might as well not be relying on Ebay to sell anything in the future." Customer service is out the window these days, and it makes you not even want to buy/do anything. Everything's such garbage.

 

[EyeBRollin]

I was listening to some Dave Ramsey videos on Youtube. He was talking about getting completely out of debt, savng up an ernergency fund, etc. Some 7 step plan. Numbers on it seem a bit outdated. Have any of you heard of him? Thoughts?

He seems to be completely against car loans and buying new cars unless your net worth is a million.

He's very basic. The methods work, but they are for beginners.

For example, emergency fund. Holding 6 months of expenses as cash is a waste. For some of us, that means holding $10,000+ in a savings account. Keep just a couple grand liquid and invest the rest into a Roth IRA ($5,500 limit per year). Roth IRA has no penalty for withdrawn contributions, so it could double as an emergency fund. Ideally, you should be always developing your skills and recognize when you are employed by a sinking ship or own a business that had it's better days already.

For cars, he's also quite simplistic.

New cars are fine if you are a high-volume driver and keep the car at least 6-7 years (about as long as the components are expected to run seamlessly). What you lose in depreciation you gain in fuel efficiency and (lack of) maintenance. Also, if you buy a electric car the government gives you $7,500 back, and you can get more from your state. Electric cars are 3-5 times more efficient than the most frugal gas cars and require no maintenance at all. My job pays me mileage (which reimburses depreciation) since most of my driving is job related, so them and the government basically funded my new car.