Yeah because he asks people that have spending problems to pay for his products!And yet, the guy’s net worth is probably more than everyone who’s commented on this thread combined... what a bonehead.
Yeah because he asks people that have spending problems to pay for his products!And yet, the guy’s net worth is probably more than everyone who’s commented on this thread combined... what a bonehead.
In all fairness, even Dave admits you can completely do his program off his radio show and free content on his website. His book in your local public library is just icing on the cake.Yeah because he asks people that have spending problems to pay for his products!
Cash envelopes and the baby steps. Paid off 60k in consumer and college debt this year. Debt free. Every 20 something should at least listen to Dave’s system.
Anyone can get a loan these days and start a side rental hustle, doesn’t mean you’re smarter than those who follow Dave’s steps.
I don’t follow all of Dave’s advice and have a solid portfolio that includes single stocks, but I am debt free other than rent and I’m saving to buy a home on a 15 year with the payment being 25% of my take home pay.
I’ll have a paid off home and hopefully over a million invested by 47.
Different strokes for different folks. Dave helped me, and you won’t lump me in with that “99% oF tHe FiNaNcIAllY iLLiTErATE poPuLATion” BS
Sent from my iPhone using Tapatalk
A house is an asset with a high probability of appreciation and the utility of giving you a place to live. Why wouldn't I leverage it if the numbers work?
I could pay off my mortgage right now and have money left over, all without touching my emergency fund or retirement accounts, but why would I? Being VERY conservative, I expect the return on my investments to be 2% greater than my interest rate, and they will likely be 3-5% greater. I've run this through basic, straight-line time value of money calculations and a few different types of planning software that use Monte Carlo analysis. Paying off my mortgage with my current situation would be a very bad move.
What no one else seems to mention when this comes up: Let's assume I'm a relatively responsible, normal person with a mortgage with 15 years left, a 6 month emergency fund, and a decent amount in a pretax 401k. If I start aggressively paying down my mortgage, the bank doesn't give a shit when I lose my job or am unable to work 2 years later and have burned through my emergency fund, but if I'd saved and invested those extra mortgage payments I have a much larger runway that buys me time without the massive tax hit of dipping into retirement accounts pre 59.5.
That's his target market, so it is what it is.People who he's great for.
1.) People struggling with their finances.
But who doesn't have a 2.5-2.7% mortgage rate after this year? Paying that off would be stupid.A house is an asset..... for your kids when you die. Even if you down size, you have paid for you home at least 1.5 times due to financing. Yes there is an opportunity cost if you prepay or don't have a 2.5% mortgage and can get 8% in the market, but that assumes that the person will not run the risk of losing their job and not keep up with the payments. A home is a cost of living. You will not make money with it, only your children will. This is one of the largest issues most couples fail to realize, and end up with much too much home because they look at it as an investment. One of the biggest scams going on in this country if you ask me.
We have owned one home our entire 31 years of marriage. It was quite small compared to what we could "afford" or what everyone in my circles own. Single smartest decision of our lives not to upsize. The ability to eliminate personal debt completely cannot be overstated for this discussion. Only when you eliminate all personal debt can you really begin to attain financial freedom. Now, if you make $750,000 per year, the discussion is different. But the average family that is pulling in maybe $80,000 between the two of them..... get rid of debt and do not be lulled into thinking your dream home is the secret to financial security because it will be worth so much in the future.
Assets that generate income should be considered for leveraging. Leveraging an income producing asset increases your return on that asset because your initial input is lower. That is why a 7% cap rate on an investment property can result in double digit returns. You can't do that with a house.
I should add that I am not advocating not to have a mortgage. You need to finance such a large purchase. It also provides opportunity to use your cash for other things, like living. But get rid of it as soon as you can, and for the love of god, do not re-leverage it to buy a car, pay for college, etc. You do that and you are done.
While I agree, I believe there is a method to his madness. He is predominantly pitching to people who have demonstrated poor financial accumen, and he may have determined that they stick to the program better when they have a relatively fast and easy win (paying off the first debt) - even if that is not the debt they should be paying off. His program is more psychology than a math problem.But who doesn't have a 2.5-2.7% mortgage rate after this year? Paying that off would be stupid.
Something I don't like about Ramsey is he advocates paying off the smallest debts first rather than the highest interest. That's really really dumb.
This is correct. He also pushes paying off the mortgage because for the majority of people don’t benefit from having it and would benefit more from having that house payment used in a different way.While I agree, I believe there is a method to his madness. He is predominantly pitching to people who have demonstrated poor financial accumen, and he may have determined that they stick to the program better when they have a relatively fast and easy win (paying off the first debt) - even if that is not the debt they should be paying off. His program is more psychology than a math problem.
That is a very myopic view on what for most will be their most significant financial asset.A house is an asset..... for your kids when you die. Even if you down size, you have paid for you home at least 1.5 times due to financing. Yes there is an opportunity cost if you prepay or don't have a 2.5% mortgage and can get 8% in the market, but that assumes that the person will not run the risk of losing their job and not keep up with the payments. A home is a cost of living. You will not make money with it, only your children will. This is one of the largest issues most couples fail to realize, and end up with much too much home because they look at it as an investment. One of the biggest scams going on in this country if you ask me.
We have owned one home our entire 31 years of marriage. It was quite small compared to what we could "afford" or what everyone in my circles own. Single smartest decision of our lives not to upsize. The ability to eliminate personal debt completely cannot be overstated for this discussion. Only when you eliminate all personal debt can you really begin to attain financial freedom. Now, if you make $750,000 per year, the discussion is different. But the average family that is pulling in maybe $80,000 between the two of them..... get rid of debt and do not be lulled into thinking your dream home is the secret to financial security because it will be worth so much in the future.
Assets that generate income should be considered for leveraging. Leveraging an income producing asset increases your return on that asset because your initial input is lower. That is why a 7% cap rate on an investment property can result in double digit returns. You can't do that with a house.
I should add that I am not advocating not to have a mortgage. You need to finance such a large purchase. It also provides opportunity to use your cash for other things, like living. But get rid of it as soon as you can, and for the love of god, do not re-leverage it to buy a car, pay for college, etc. You do that and you are done.
But who doesn't have a 2.5-2.7% mortgage rate after this year? Paying that off would be stupid.
Something I don't like about Ramsey is he advocates paying off the smallest debts first rather than the highest interest. That's really really dumb.
Well yeah, and Dave says that all the time. "I didn't do anything, you did. I just showed you some steps and you did all the work". Like all the time.Dave didnt make any of that possible. You paid off 60k in debt this year because you make way more that the average person (the average person does not even make 60k in a year) and made the right decisions.
Thats one reason I do not get into these Dave type people. They dont have some big secret. They just tell you what you should be doing. People know what they should do they just dont want to. Eventually people get so into the hole they realize they effed up and seek out help to do what they already know they should be doing.