Quote:
Originally Posted by LivingAlmostLarge
Paying off all debt in 2 years. I have meet many pf bloggers who take longer than 2 years, and I wonder if they can really survive on $1k? Example needtobedebtfree.blogspot.com. He ran through $3500/month plus his snowball because of emergencies. Only because people on his blog (myself included) pushed him to have more than $1k in the bank. IF he didn't he would have used the CC to make ends meet. Plus one of his bills was the IRS, so you don't mess with them! You pay them first, then your mortgage and then when there wasn't enough what? CC baby.
So I think his advice is okay, but it can be very harmful. For example another couple is going to take 4 years to pay off debts. Can they really suspend retirement contributions for 4-6 years while building an EF? Bad idea.
Another point is his investing in 4 mutual funds is not wise. If you are 50-something, why would you be 100% in equities and no bonds? I mean even 10-20%? And why would you be 25% in small cap, 25% mid cap and 25% international at 50-something? Time to balance your risk moderately, not quite so aggressively. It could hurt someone to follow that stupidity. You don't need 100% equities even in your 20s. You can but the return isn't that much more than adding a bit of bonds/cash to your portfolio.
So someone nearing retirement? Bad Idea.
Also he says if you can pay cash you can afford it. I think most on this board would say that's not true. Unfortunately just because I can pay cash for a $30k car and I make $30k and it took me 5 years, doesn't mean it's affordable. But it seems like a quick way to get whatever you want.
Save and pay cash, who really cares about retirement, sinking funds, etc? I notice Dave Ramsey does not emphasize anything other than debt. He doesn't explain about savings, he doesn't explain about planning for purchases that are large long term. This can hurt people, because it's automatically assumed if you can pay cash you can AFFORD it.
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Dave has said many times: If you are not willing to get gazelle intense, his program is not for you. He has said many times that the IRS comes first. I don't know what show you are listening to, but DR has never said that if you have cash you can afford it. His whole program is about getting out of debt so that you can build wealth.
I challange right now to listen to his show for 1 month and if you can come back here and tell me he is giving bad advice and harming peoples futures, I will leave this forum.