Dave Ramsey - Any Thoughts?

[ecarsonjr]

Has anybody read Ramsey's "Total Money Makeover?" Any opinions of him, his website, program or book?

[BAGAGT1]

I've read the book, and I do listen to his radio broadcast regularly. I don't always agree with his advice, but you definitely can't go wrong by following his advice. He pretty much believes in not borrowing money for anything but a house.

[Tree0164]

I like him alot. I don't always agree 100% with him but he really focuses on the behavior on why you got into debt and why you need to get out.

[boxxies]

Hi guys,

I listen to his show regularly and LOVE it.

He is very charismatic and he tells it like it is.

No B.S. from this guy.

Did not read his book,but will soon.

He has helped thousands of people and now
has his course in some lucky high schools.

It's too bad governement heads do NOT
have his common sense.

Marie

[ecarsonjr]

I started this thread because I am starting Ramsey's Finanancial Peace course tonight and wanted to see what the majority thought was about him. So far as I can tell, he is no non-sense and uysually has some good advice. I hope the course will help me in dealing with my overspending behavior; though, I know that is a personal thing I must work on myself.

[boxxies]

Hi there,

I'm sure if you apply his techniques you will
be successful.

Remember, that the most important thing he
is teaching is to work on your "behaviour".

I believe that this is the KEY to success.

Wishing you good luck in your effort to
better your finances.

His motto:

"Live like no one else, so later....you can live
like no one else".

Maria

[jmjj215]

Good luck on the FPU series. If you practice what he preaches, you'll see your finances (and perhaps other areas of your life) vastly improve.

[dealsaver]

Dave Ramsey isn't the worst of the financial Guru's, but I certainly wouldn't follow all of his advice without figuring out if it makes sense for you first(like paying off low interest low balance credit card accounts before high interest large balance credit accounts. That's nuts!) . Personally, I think it's foolish to pass up an opportunity to take advantage of 0% credit card offers or other forms of low interest debt when you invest the proceeds at a higher guranteed rate and know how to manage your credit properly. Plus credit card rewards cards can used to enrich your life by earning free cash, free travel, free college savings, etc. I would be materially worse off financially if I followed all of Dave Ramsey's advice.

People spend way too much time and money seeking advice from others on how to manage their finances. If you are looking for advice on your personal finances, just go to the library where there are tons of books on the subject. After you've read enough of them, you'll realize that all you need to do is to live beneath your means and save for tommorow. It's not rocket science and there's no need to give these gurus any more of your hard earned money for their books or courses.

[sweeps]

Originally Posted by dealsaver

Personally, I think it's foolish to pass up an opportunity to take advantage of 0% credit card offers or other forms of low interest debt when you invest the proceeds at a higher guranteed rate and know how to manage your credit properly.

Hey dealsaver, are you getting 0% interest on cash advances? Or if you're not using cash advances, how is this done?

[dealsaver]

Originally Posted by Sweepsplayer

Hey dealsaver, are you getting 0% interest on cash advances? Or if you're not using cash advances, how is this done?

Most 0% offers come with new credit card applications and their terms can vary greatly depending on the card issuer.

Of my existing credit card lines, Chase frequently sends me 0% offers for 6 months on Balance Transfers with a 3% fee up to $75. If you are transfering large amounts($15,000 or more), the fee is minimal. I then use that cash to take advantage of account opening bonuses on checking accounts, savings accounts, and cds where the return with the bonus included is often greater than 10%. If none are available, then I look for high rate specials at banks and credit unions where you often can find a 6% or higher promotional yield.

A trick to use when taking advantage of 0% offers is to reallocate your existing credit lines with the same credit card issuer onto the card that is offering a 0% offer. This way you can exploit the offer to the maximum. For example, say you have 3 Chase cards with limits of $20,500, $15,500, and $3,000. If you recieve a 0% offer on the card with a $3,000 limit, you can call Chase and reallocate $35,000 of your credit limits from your other 2 cards and have $38,000 available to take advantage of that 0% rate.

Of course if you follow Ramsey's advice, you wouldn't take advantage of opportunities like these.

[akaivyleaf]

I think the point Dave is making is not about juggling credit/rates from one place to another but to rather not have the need to do these things. I think a person is on a higher plane when they aren't enslaved to debt except for a house which is what Dave advocates. Now I don't agree 100% with his tactics, but the message I think is a good one. I would love to attend a FPU but I haven't made it yet, but then again, I'm already at financial peace through just listening to his radio broadcast, and others like him and reading books, staying on forums like this and changing my mindset and living structure.

[Beeba]

I really like Dave Ramsey. I listen to his radio show and have read his books. I like his no-nonsense approach. He's very blunt and I like that. He's not afraid to tell you what you did is stupid if it really was. But like everything else, you have to figure out if his approach will work for you. You have to be serious about getting out of debt and work at being there. It's not a quick fix by any means. It's up to you and your partner to implement all the tools you're given.

[BCompDude]

Originally Posted by dealsaver

Dave Ramsey isn't the worst of the financial Guru's, but I certainly wouldn't follow all of his advice without figuring out if it makes sense for you first(like paying off low interest low balance credit card accounts before high interest large balance credit accounts. That's nuts!) . Personally, I think it's foolish to pass up an opportunity to take advantage of 0% credit card offers or other forms of low interest debt when you invest the proceeds at a higher guranteed rate and know how to manage your credit properly. Plus credit card rewards cards can used to enrich your life by earning free cash, free travel, free college savings, etc. I would be materially worse off financially if I followed all of Dave Ramsey's advice.

Dave Ramsey's advise can't get people into trouble, there isn't anything wrong with it. Getting out of debt is only a good thing--and from what I've listened to his advice is pretty spot on. There are some people in the world (such as you) that can have enough self discipline and motivation to use credit cards for rewards and continually pay off the higher interest accounts regardless of amounts owed. Although if there is a balance on those cards, you aren't "earning" anything anyway, I fact I'm assuming you realize.

Most people want to see their balances go down quickly so they keep with it, and I believe his advice to be advisable for the average person. If there are two accounts, one with a balance of $1500 at 15 percent interest and one with a balance of $500 and a 12 percent interest rate, I'd pay off the one with 500 to get it out of the way, then apply that payment to the other outstanding balance. Would I be "losing" some money to interest on the other account? Sure, but I'd be seeing the lesser one go down much quicker, so I'd stay on course. In the grand scheme of things, you have to STAY on the program and losing a few dollars here and there isn't a big deal. Just like switching money from bank to bank for .5 percent interest. . .waste of time IMHO.

And getting credit card offers for zero percent so you can transfer balance is a risky game indeed as one late payment sends you into "default" and with that a much higher APR--heck, sometimes if you pay late on ANY type of payment they "default" you. If you have to do that more than once you're just moving your debt around and not really attacking it anyway. I'm of the belief that if you have credit card debt you get rid of all of them until its paid off, and who needs another credit card anyway? Lol. That said, the zero percent transfer DOES work for some people and it makes perfect "money" sense, but the average transferee doesn't utilize it correctly, which is why they send them out en masse. The bottom line is this: people have to take action with a plan they will stick with, and for most people that isn't usually the one that makes the most money "sense" but rather emotional "sense".

[BCompDude]

Originally Posted by dealsaver

Most 0% offers come with new credit card applications and their terms can vary greatly depending on the card issuer.

Of my existing credit card lines, Chase frequently sends me 0% offers for 6 months on Balance Transfers with a 3% fee up to $75. If you are transfering large amounts($15,000 or more), the fee is minimal. I then use that cash to take advantage of account opening bonuses on checking accounts, savings accounts, and cds where the return with the bonus included is often greater than 10%. If none are available, then I look for high rate specials at banks and credit unions where you often can find a 6% or higher promotional yield.

A trick to use when taking advantage of 0% offers is to reallocate your existing credit lines with the same credit card issuer onto the card that is offering a 0% offer. This way you can exploit the offer to the maximum. For example, say you have 3 Chase cards with limits of $20,500, $15,500, and $3,000. If you recieve a 0% offer on the card with a $3,000 limit, you can call Chase and reallocate $35,000 of your credit limits from your other 2 cards and have $38,000 available to take advantage of that 0% rate.

Of course if you follow Ramsey's advice, you wouldn't take advantage of opportunities like these.

Right, if you follow his advice you won't need any credit cards because you won't be in debt. Good lord, why in the world would you need a limit of 20k, and on ONE credit card of many? Do you buy cars with your card? "Take advantage" how? Debt is debt is debt. Even if you were to use that zero percent for real estate or stocks or some other appreciating assest, the average transfer length is 6 months to a year. So you have to get back your initial investment amount plus whatever "profits" you intend to get by that time or you pay interest anyway. I know you will disagree with me, but I see absolutely no reason to have a credit card with those balances when you are supposed to pay them off every month. And if you are transfering 15k I think there are more pressing matters to attend to than if you can open up savings accounts with that money. Thats how people become enslaved. I'd much rather follow Dave's advice than yours. Its a dangerous game you're playing, one missed payment and its hurtin' time.

Edit: I MUST be reading your posts wrong. "Of my existing credit card lines, Chase frequently sends me 0% offers for 6 months on Balance Transfers with a 3% fee up to $75. If you are transfering large amounts($15,000 or more), the fee is minimal. I then use that cash. . . " WHAT cash? These are BALANCE TRANSFERS. You don't get cash to open accounts or cds. Wires must be crossing. . .you'll have to detail.

[seaar2000]

I like Dave's Ramsey's Total Money Makeover book. The only thing I don't do is stop my 401 (b) plan due to starting late in life with my 401 (b). Outside of that I really enjoy his ideas in the book.

[dealsaver]

Originally Posted by BCompDude

Dave Ramsey's advise can't get people into trouble, there isn't anything wrong with it.

If I had applied Dave's advice to my family's finances, we would be a lot less well off. I consider that very wrong.

Getting out of debt is only a good thing--and from what I've listened to his advice is pretty spot on. There are some people in the world (such as you) that can have enough self discipline and motivation to use credit cards for rewards and continually pay off the higher interest accounts regardless of amounts owed. Although if there is a balance on those cards, you aren't "earning" anything anyway, I fact I'm assuming you realize.

Of course. You should always use different cards for rewards churning and Balance Transfer investing.

[jmjj215]

What dealsaver does is for the disciplined, educated, and financially able/willing. I'm not willing to mess with it, so I don't do it. He certainly can make money borrowing at "3%" (after the fee) and making 6% on a CD.

Dave Ramsey is more about changing behavior than giving intricate financial advice. He's an extremely good motivator.

On methods to get out of debt: The Secret to Debt Reduction

[dealsaver]

Originally Posted by BCompDude

Right, if you follow his advice you won't need any credit cards because you won't be in debt. Good lord, why in the world would you need a limit of 20k, and on ONE credit card of many? Do you buy cars with your card? "Take advantage" how? Debt is debt is debt. Even if you were to use that zero percent for real estate or stocks or some other appreciating assest, the average transfer length is 6 months to a year. So you have to get back your initial investment amount plus whatever "profits" you intend to get by that time or you pay interest anyway. I know you will disagree with me, but I see absolutely no reason to have a credit card with those balances when you are supposed to pay them off every month. And if you are transfering 15k I think there are more pressing matters to attend to than if you can open up savings accounts with that money. Thats how people become enslaved. I'd much rather follow Dave's advice than yours. Its a dangerous game you're playing, one missed payment and its hurtin' time.

Edit: I MUST be reading your posts wrong. "Of my existing credit card lines, Chase frequently sends me 0% offers for 6 months on Balance Transfers with a 3% fee up to $75. If you are transfering large amounts($15,000 or more), the fee is minimal. I then use that cash. . . " WHAT cash? These are BALANCE TRANSFERS. You don't get cash to open accounts or cds. Wires must be crossing. . .you'll have to detail.

Most credit card companies allow you to do a balance transfer directly into your checking account as a deposit. You then transfer those funds or write a check to open up a cd account along with a high yield savings account. You use the savings account to make the monthly payments on your credit account. Your cd should be timed to expire with end of your 0% promotion rate.

As far as missed payments, there is no excuse for making a late payment with automated payment systems. The biggest hassle of this whole thing honestly is all the 1099's you have to deal with at tax time from all the different insitutions you've had deposit accounts with over the year.

Just to make sure we are all clear on this subject, I do not have any debt related to consumer purchases. Our only debt is real estate and investment related. Financing anything that depreciates is nuts. On that, Dave Ramsey and I are in complete agreement. However, whenever you have the opportunity to borrow at a low rate and invest at a higher FDIC insured( or a federally insured credit union deposit) rate, it makes sense to do so. With that, you are doing exactly what banks are doing. If you think of it as a business, there's no reason you can't make $10,000 - $20,000 a year on the side in your spare time. Some people may consider that an insignificant sum, but it is worthwhile for me and my family. It is a perfect opportunity for SAHM's to help out with the family budget on their own time. This upcoming year my family will go on vacation for free, I'll have earned money towards multiple 529 plans, built up our savings, and earned rebates toward our next car(all our cars are paid for with cash). If that is so wrong, I don't want to be right.

[bman46]

I strongly support Dave Ramsey, you will NOT go wrong following his plan. It would be impossible to do badly with the plan.

[jmjj215]

It would be impossible to do badly with the plan.

Unless you forecasted all of your investments at his favorite 12% rate - that can possibly lead to under-saving. I personally don't think 12% will be the layman's rate - you'll have to work your tail off to get that in the future.

Other than that, and the strict, NO CREDIT CARDS approach, I really really like his stuff.