Suze Orman or Dave Ramsey?

[tabbycat31]

I've noticed that Dave is not even on the air in a lot of the higher COL areas. He dosent have a single metro NY area (high population area) radio station carrying his show. And most of his calls tend to be people from the south or midwest, and not too many cities (ie Chicago).

I just lost my job yesterday, and I really wonder what he would say to me at this point.

Meanwhile in contrast, Suze herself lives in a high COL area (I want to say Miami but I could be wrong)

[LuxLiving]

This may be a simplistic and possibly offensive idea, but if people stopped paying $600K for a home that sells in other parts of the country for $60K, do you think the prices would ever come down?

[LivingAlmostLarge]

Um, maat, I live over 6k miles away from ANY family. I don't even live on the same continent. DH doesn't live in the same country. Thank you very much.

We've lived cheap or else we wouldn't be affording everything we have NOW. We bought before we were even 30, I think we were sacrificing quite a bit!

So please tell me should we have rented for 15-20 years? Living in a garage? In CA, it's mostly illegal to do that, especially in SD. Same in boston unless it's zoned properly!

So we could be evicted or reported by a neighbor. Now when we first moved we were renting a studio for $1400 without parking. Please tell me, how are we living above and beyond our means? And how much cheaper do you want us to get?

So explain to me how it's an option? I've given you example, I've always wondered why DR can't do big cities? I think the answer is that he couldn't make his numbers work in HCOLA and people would ignore him. If he told someone rent for 15 years, they'd say that's the term of a mortgage and how does it make ANY FINANCIAL SENSE????

Then he'd say well live cheap, and they'd fire back, you say don't wait to get out of debt to have children. So while having kids during those 15 years where do you live? You can't just cram them into a tiny 1 bd apartment? It's against the law in many states to have more than 2 people in 1 room. Again in SD it is written into the leases. So explain how you have children (which Dave Ramsey says to not put off for $$) while saving to buy a home?

I just don't think his cash only buying a home works in many areas. I read his book and a couple saved for 6 years to pay cash for a $90k home. That's less than what DH and I put down on our house. So how do we save $600k cash? By that couple's example we'd be saving for 36 years, that's longer than a mortgage. Plus you wait 10 years to save cash and the price of the home goes up anyway.

Our roommate is looking to "rent" a room in a house, cheapest he's found is $600 in a terrible area. So it's an expensive area period.

I guess we could try and rent as a married couple a room for $600, but not many people want to rent to a couple a room in a house. Plus they charge more for utilities.

By the way $600k is not a huge home we're talking a small starter home by your standards.

And I don't think homes will ever drop to $60k. In my neighborhood, we were watching single families, they didn't really drop in value. Mostly because of the school district. There are still bidding wars going on because lack of building of single family homes.

[money2009]

There are good ideas/advice to be offered by both imo. However, most the stuff they provide is basic financial health 101 type stuff.

[tabbycat31]

there's a lot of other things that tie people to a certian area other than the price of housing. The culture is different in various parts of the country. Culture aside, I would never be able to live in the south because I don't like hot weather. We had a heatwave here for a few days, and I would die if the entire summer was like that (high 90s and humid), and from what I have heard, that weather is normal 6 months in the year in, say Houston or parts of Florida.

People also tend to stay around where friends and family are. I recently did a search for my high school class on Myspace, and now 10 years out, about half of them still live in the same county. (with another 30 or so percent living in NYC, just under an hour south). Very few live outside of the NY metro area. Last fall, I left my roots for a low(er) COL area, and having just lost my job, am thinking of moving back to NY, where at least I have the safety net of friends and family. I don't really know too many people (aside from co-workers) around here because the hours I was working prohibited me from having any sort of a work/life balance.

This is also a politically divided country with the whole red state blue state thing (and there was an article on MSNBC yesterday saying this country is now more divided than ever....Mercurio: Reading between the lines - National Journal - MSNBC.com. If you transplant a NYC or San Francisco liberal and place them deep in the heart of the most conservative part of Texas, I don't think you have a recipe for happiness here, even though the cost of housing is far lower in Texas than it is in NYC or San Francisco. I think many people would rather spend more on housing and be comfortable in the area they live in than spend less and feel like a fish out of water. I went to school in Ohio for a year, and I felt like a fish out of water the whole time I was there.

[maat55]

Um, maat, I live over 6k miles away from ANY family. I don't even live on the same continent. DH doesn't live in the same country. Thank you very much.

We've lived cheap or else we wouldn't be affording everything we have NOW. We bought before we were even 30, I think we were sacrificing quite a bit!

So please tell me should we have rented for 15-20 years? Living in a garage? In CA, it's mostly illegal to do that, especially in SD. Same in boston unless it's zoned properly!

So we could be evicted or reported by a neighbor. Now when we first moved we were renting a studio for $1400 without parking. Please tell me, how are we living above and beyond our means? And how much cheaper do you want us to get?

So explain to me how it's an option? I've given you example, I've always wondered why DR can't do big cities? I think the answer is that he couldn't make his numbers work in HCOLA and people would ignore him. If he told someone rent for 15 years, they'd say that's the term of a mortgage and how does it make ANY FINANCIAL SENSE????

Then he'd say well live cheap, and they'd fire back, you say don't wait to get out of debt to have children. So while having kids during those 15 years where do you live? You can't just cram them into a tiny 1 bd apartment? It's against the law in many states to have more than 2 people in 1 room. Again in SD it is written into the leases. So explain how you have children (which Dave Ramsey says to not put off for $$) while saving to buy a home?

I just don't think his cash only buying a home works in many areas. I read his book and a couple saved for 6 years to pay cash for a $90k home. That's less than what DH and I put down on our house. So how do we save $600k cash? By that couple's example we'd be saving for 36 years, that's longer than a mortgage. Plus you wait 10 years to save cash and the price of the home goes up anyway.

Our roommate is looking to "rent" a room in a house, cheapest he's found is $600 in a terrible area. So it's an expensive area period.

I guess we could try and rent as a married couple a room for $600, but not many people want to rent to a couple a room in a house. Plus they charge more for utilities.

By the way $600k is not a huge home we're talking a small starter home by your standards.

And I don't think homes will ever drop to $60k. In my neighborhood, we were watching single families, they didn't really drop in value. Mostly because of the school district. There are still bidding wars going on because lack of building of single family homes.

You should see what 600k will buy in Tulsa. If you don't like Dave, that's no skin off my back. I'm much better off, having listened to his financial advice. Everyone has a choice of where they want to live and how they want to spend their money. I hope CA's worth it.

Where I live, paying cash for a home is very doable. By the way, I'm not trying to talk you into paying cash for a house, Dave got mad at debt and did something about it, go Dave.

[cschin4]

I think Dave and Suze both give good basic advice. But, good basic advice is not applicable in all situations. In my situation, I was working FT and my DH was unemployed as he had just finished school and changed careers. We decided to go ahead and have children and we were renting at the time. Any, things worked out, I worked FT for the first year of my son's life, he stayed home, then he got a FT time job and I went PT and then we purchased our first home. If you really think you will "save" up enough to have kids, I think you could be making a mistake. Your childbearing years are at a certain time in your life and if you are female, you are taking a chance to wait past the 37 or so mark as fertility does decline. So, if you really long to have children, I would not be waiting until age 40 when everything is paid for to give it a go.
I think I view money in more of a fluid way. It comes and goes. And, some of it you can and should try to hold on to but much of it comes and in and goes out to live. I think the focus should be to try to spend your money wisely, buy quality stuff, don't buy stuff you really won't use, and make a plan to put some away. Don't overspend on your home or cars so that you can survive an economic downturn.

[LivingAlmostLarge]

I think that his advice isn't applicable in many cases. And in many cases financially imprudent like advising to pay 100% cash for a house. You say you didn't want a mortgage, how long would it have taken you to pay 100% cash for a home?

Plus I agree completely with don't wait for debt to have kids. But if you take his 100% debt free seriously you wouldn't want kids because you'd be going gazelle to get out of debt.

[ActYourWage]

Dave Ramsey has great advice. He is not against a 15 year Fixed mortgage.

[LivingAlmostLarge]

He mentions that he prefers 100% DP. And even a 15 year fixed with 25% PITI is pretty low for people in HCOLA.

[maat55]

He mentions that he prefers 100% DP. And even a 15 year fixed with 25% PITI is pretty low for people in HCOLA.

Come on LivingAlmostLarge, were talking about Dave Ramsey. What do you expect him to say about buying a house? Here, take 1 dollar and get a 40 year note.

Not many people will take his advice about home buying, but if they do, they will be much better off in the long run.

[LivingAlmostLarge]

Say 25% PITI of a 15 or 30 year fixed and be able to afford it. 30 year for those areas where it's harder to own homes. And don't be discouraged by getting a fixed rate and slowly saving and building equity, perhaps on the next trade you'll be able to afford more.

A REALISTIC point of view that makes people think it's possible instead of impossible.

[maat55]

Say 25% PITI of a 15 or 30 year fixed and be able to afford it. 30 year for those areas where it's harder to own homes. And don't be discouraged by getting a fixed rate and slowly saving and building equity, perhaps on the next trade you'll be able to afford more.

A REALISTIC point of view that makes people think it's possible instead of impossible.

.

Personally, I think the 30 year note is causing the overpriced market. Just like 6 and 7 year notes on cars. I also think that the CA. and NY. markets are way over priced. But I agree that the sacrifice for a 15 year note is much much greater in those markets.

[LivingAlmostLarge]

It's not just NY and CA. There are other areas just as expensive. Also another point of view, is that ARMs are wrong.

If you look at Canada they don't have foreclosures or the same kind of debt problems. Yet the most common mortgage is a 5 year arm. After 5 years they renegotiate with the bank. To have a fixed mortgage is very uncommon and not a "Good" idea to most canadians. So are we americans stupid for 15 year or 30 year fixed?

Or is it just a matter of perspective? And what is "common" where we live? They think we're stupid for fixed rates, we think they're crazy for Arms. But in each system there are pros and cons.

And I don't think it's the 30 year fixed driving up the price. The price is driven by demand. And one could argue that long term it's always financially better to stretch out a 30 year fixed. If you aren't maxing out all retirement accounts like 1-2 401ks and IRAs, then you should get a 30 year fixed, and maximize contributions to them. Then work on the mortgage.

And the tax break from the 401k say you are in the 25% bracket outstrips the 7% 30 year fixed mortgage right there. I'm not talking about the tax break from the mortgage deduction but solely based on 401k tax break. Which most people forget about.

[maat55]

It's not just NY and CA. There are other areas just as expensive. Also another point of view, is that ARMs are wrong.

If you look at Canada they don't have foreclosures or the same kind of debt problems. Yet the most common mortgage is a 5 year arm. After 5 years they renegotiate with the bank. To have a fixed mortgage is very uncommon and not a "Good" idea to most canadians. So are we americans stupid for 15 year or 30 year fixed?

Or is it just a matter of perspective? And what is "common" where we live? They think we're stupid for fixed rates, we think they're crazy for Arms. But in each system there are pros and cons.

And I don't think it's the 30 year fixed driving up the price. The price is driven by demand. And one could argue that long term it's always financially better to stretch out a 30 year fixed. If you aren't maxing out all retirement accounts like 1-2 401ks and IRAs, then you should get a 30 year fixed, and maximize contributions to them. Then work on the mortgage.

And the tax break from the 401k say you are in the 25% bracket outstrips the 7% 30 year fixed mortgage right there. I'm not talking about the tax break from the mortgage deduction but solely based on 401k tax break. Which most people forget about.

I still think the 30 year is, in many peoples minds, a necessary evil. The fact remains that a house cost you much less on a 15 year. I will always believe that no debt is a good debt. I should also say that if I lived in the higher priced markets, I would probably have a 30 year also, but only after much attempt to advoid it.