Stuck and a bit scared to proceed

[MonkeyMama]

Two points re: Dave Ramsey.

I'm not sure where someone got the idea that he's suggested managed funds. I don't recall him ever actively promoting that. He's constantly advocating no-load funds, low-expenses ratios, (and index funds from what I remember). Maybe he's changed in the past few years? I never heard anything he promoted that could be considered "obscenely bad advice".

I often listen to Dave Ramsey and have never heard much of any investment advice. But, the information he does put out there otherwise is definitely obscenely bad advice. {I was in disbelief too when others pointed it out - but it's right there on his website}.

He clearly recommends load funds and commission-based advisors. He recommends that one invests 100% in stock mutual funds. (No bonds, No CDs, no REITs, nothing else - does not even recommend non-stock mutual funds, except "maybe 25% in a balanced fund if you are conservative." ??? ).

From his website:

"Choose A shares (front end load) and funds that are at least five years old. They should have a solid track record of acceptable returns within their fund category"

"Long term, class A shares are much less expensive than B shares or C shares, so Dave recommends them."

"Pay a pro. Dave still chooses to use a pro and suggests you do too."

By my view, this is all obscenely terrible advice. How about invest yourself, in the indexes, and forget all these FEES. & maybe have a more prudent asset allocation based on your tolerance for risk, and based on sound diversification strategies. & do I have to say it - judging a fund by how old it is? IT's 5 years old so it's good?? OMG?

[Nika]

"Saving $100 dollars a months will make you a multi-millionaire" is a very bad advice Dave Ramsey seems repeating.

1. He projects 12% yearly return as if is guaranteed in any "solid" mutual fund
As if you will be guaranteed this return in a normal risk investment. Also, I would love to see where you can get 12% investing only $100 a month...

He also seems to imply that this will make you wealthy, discounting how much money is worth 40 years from now.

This communicates to naive listeners that if they only save this much they will be ok in retirement.

[Petunia 100]

Two points re: Dave Ramsey.

I'm not sure where someone got the idea that he's suggested managed funds. I don't recall him ever actively promoting that. He's constantly advocating no-load funds, low-expenses ratios, (and index funds from what I remember). Maybe he's changed in the past few years? I never heard anything he promoted that could be considered "obscenely bad advice".

I missed this comment earlier. Mgkimsal, this page on daveramsey.com titled "Dave's Investing Philosophy" has the text Monkey Mama quoted:

Dave's Investing Philosophy - daveramsey.com

[Blessed]

I feel like a creep for canceling but oh well

I had left a message a few days ago that I was cancelling my appointment with the Principal Rep. this week. Guess who called me. Uh huh. I got the talk about how we seemed to have good vibe in our previous conversation and I need someone to watch out for my best interest and I really should let her look over what the others recommend for me to be sure I am not being steered the wrong way because reps will do that. Sheesh. I may not know much but I'm not 2 years old and can do a bit of research and form an opinion.

[kv968]

I've never listened to Ramsey but I've heard of some of his advice (mostly on this board) and evidentally he is terrible with investing advice. He might do a good job helping people with debt, but I'd go elsewhere for any suggestions on investing.

I like this one on Indexed Annuities:
"Dave does not own Equity Indexed Annuities and does not suggest them as part of your investment plan. Equity Indexed Annuities agree contractually to limit your loss while you agree to limit your gains. Instead, invest directly into index funds if you want to follow an index such as the S&P 500 or similar."

Ok, I'll agree stay away from indexed annuities. He suggests using an index funds instead and I'll buy that too; However 3 spots above this suggestion is this on ETFs:

"Dave does not own ETFs and does not recommend them as part of your investment plan. ETFs are baskets of single stocks that are intended to operate like mutual funds, but they are not mutual funds."

I can understand maybe pointing out the fact that ETF's don't operate like managed mutual funds but they do behave like an index (the very thing he's suggesting in this case) since that's what they follow. Yet he doesn't believe you should invest in them