Anyone use Dave Ramsey

[Wino]

That's fine, Kork. I don't follow DR's plan. I just find it amazing that so many folks hate someone because he had the audacity to get rich helping others set their lives straight. You attribute passionate support of DR to me. It is only fair that I lump you with the irrational DR bashers.

So, you think DR should be advertising for his competitors on his radio show and website because his advice is not YOUR advice. What an interesting concept. I have to say that I don't remember that plan of action from my marketing classes. That lecture must have happened when I missed class.

[kork13]

Ugh... seriously, please relax. No one is attacking you or Dave Ramsey. If you remember, I've already said that I actually respect the man for having successfully gotten rich from helping people, after successive utter failures (by his own admission). All of us are simply stating our personal opinions and observations about what DR teaches. We're trying to hold a rational, unemotional discussion about the pro's & con's to his advice, but you're ridiculing all of us with ad hominem attacks and non-sequitur conclusions. There is no "hate" for anybody, simply a difference of opinion. Never did anyone even hint that DR should advertise for his competitors, we have only ever stated that they are out there.

I know that you've been around here for a while, so I'm sure you're not intentionally being troll-ish... But you need to recognize that everyone has an opinion, and it won't always be the same as your's, but it will still be a valid viewpoint. I love participating in these forums because I enjoy learning and continuing to hone my personal philosophy about finances, and where I can, helping others do the same. And so I, for one, would appreciate some of the same mutual respect that we've given to you and your opinions. Congratulations to you then... You can add me to the list with MonkeyMama of people you and your irrational tirades have turned off from this thread. Good luck, and good day.

[Spock]

IMO...

I followed Dave's basic steps as just "Common sense" long before I heard of him.

Building an emergency fund is solid. I use an app called You Need a Budget (YNAB) which takes that idea one step further: you live off last month's income. I think YNAB's method is even better, not only do you have an emergency fund but you aren't spending money by what you "think" you'll have but what you "know" you have that month.

The rest is, to me, fairly common sense stuff. Pay off debt and save. I personally trust nobody's investment advice: nobody has any idea. Historically, you'll do better just throwing your money into a fund somewhere and leaving it alone. Get your free (401k match) money where you can, but just put the rest in a balanced fund and let it be.


Now here's where I dislike Dave Ramsey... He lives in some crazy universe that doesn't exist. His suggestions on car buying completely ignore stuff like commission, state taxes and fees. He'd have everyone living in a cardboard box.
The "15 year" rule on mortgages is ridiculous to me. Following his rules, I'd have been living in a 70,000 junky house that needed repairs and in an area of high crime. THATs what I want to raise my family in. Forget rentals- they're not much better, if you want a rental or apartment in an area of town without ridiculous crime you'll be paying more each month than a mortgage. What do you save money for a home with? Throwing money away at a rental makes no sense when you can't also save for a home. (I don't exaggerate this, apartments a block from me are $950, my mortgage is $100 less).

Live within your means? Yes. If you are buying a house way out of your means, and THAT is the reason why you need a 30-year mortgage then I don't really pity you. I just think he's out of touch with reality for many people.

[Petunia 100]

You're right, Petunia: Dave Ramsey should leave his listeners to their own devices and let them invest their first-time cash with the local 'CFP-insurance salesman' so they can have all the whole life, annuity, and churn funds they need for retirement. Because that's the actual alternative to offering them his plan, however much you hate it and him.

I think you must have CFP confused with some other designation. A CFP is a Certified Financial Planner, not an insurance salesperson. A CFP is also a fuduciary, legally bound to act in the best interests of the client. This is a much higher standard than an insurance salesperson, who is only obligated to sell appropriate products. The bar as to what is appropriate is unfortunately quite low.

I'm not certain why I am being accused of hating DR. I am capable of evaluating an investing strategy based on facts. I don't have to work up some hatred in order to see that 10% is not 12%, that volatility cannot be ignored, and that simple average and CAGR are very different.

And I do not at all agree that the only two investing alternatives in existence are DR's plan or a life insurance salesperson. What a ridiculous statement.

Instead of seeing the good side of his plan, you'd prefer to pick nits. And thus we come back to my original statement that I've seen a lot of unjustified Ramsey bashing. The alternative to his marginally-flawed advice (yes, "marginally") is so much worse that it defies logic to fault DR for offering it.

I'm not certain how a strategy which will fail about half the time within 20 years could be considered "marginally flawed". I need for my nest egg to last my entire lifetime. I suspect most people are like me in that regard.

[disneysteve]

Wino, I really don't understand your attitude in this thread. Intelligent, sensible people can disagree without either party being wrong. There is more than one "right" way to do things.

What is even more surprising is that you are so vehemently defending Dave Ramsey when you have already told us that you don't even follow his teachings yourself so obviously you disagree with him too. I'm not sure why you aren't able to see that others also disagree with some of his methods.

Has DR helped a lot of people? Absolutely. Is most of his advice pretty sound? Absolutely. Is he right 100% of the time on everything he teaches? Absolutely NOT. I think that's really all that anyone here is saying.

I read and listen to a lot of different financial sources and pick and choose information and tips and advice from all of them. As I said, I've never found a single source that I totally agree with on every point. Dave Ramsey is good. Suze Orman is also good. And the two of them give completely opposite advice on a number of topics. That doesn't mean one of them is wrong. They just take different approaches to personal finance.

So feel free to DISCUSS Dave Ramsey's teachings and be open and willing to hear other views. And again, you yourself don't agree with everything he promotes so keep that in mind and give others the same consideration.

[MonkeyMama]

Regarding a 100% stock allocation, let me make a few comments on that piece. First, that isn't what he says. He says 25% each to growth, aggressive growth, international growth, and growth and income. A growth and income fund is not 100% stock. Depending on the fund, it might be 80/20, 70/30, 60/40, 50/50, or even 40/60 or 30/70 etc. Let's say it's 50/50. That would make the overall portfolio actually be 87.5/12.5, not 100/0.

It depends on the fund. I thought your comment might be fair enough. BUT, it seems like most income funds are dividend-focused, particularly today with current interest rates.

Vanguard's Growth and Income Fund is 100% stock. I just looked it up - it was the first thing I looked up. T Rowe is 99% stock. Fidelity is 100% stock. & so on...

So, yes, he is recommending a 100% stock portfolio.

[BuckyBadger]

I agree with most on this thread - Dave Ramsey is excellent for helping people get the mindset to get out of debt, but he is terrible about investing advice. The numbers simply don't lie - his recommendations and his projections are practically guaranteed to fail. I think any rational person reading this thread would understand that. He cherry-picks numbers and data and recommends high price actively managed funds because he gets a cut of it.

And that's probably my biggest problem with him - the fact that he can be bought.

I heard him the other day on my radio hawking for a local car dealership talking about their great loan rates. He gets paid by people to recommend their services and products. I think that throws any advice that he gives into question. People don't know what is actually good advice, and what is just advice for which he's getting paid.

[disneysteve]

I heard him the other day on my radio hawking for a local car dealership talking about their great loan rates.

I find this incredibly difficult to believe. If there is one thing he is vehemently opposed to it is taking out loans for anything at all except a mortgage. I can't imagine that he would be doing radio ads for car loans. If you are able to verify that, I would love to see proof of that ad.

[disneysteve]

It depends on the fund. I thought your comment might be fair enough. BUT, it seems like most income funds are dividend-focused, particularly today with current interest rates.

Vanguard's Growth and Income Fund is 100% stock. I just looked it up - it was the first thing I looked up. T Rowe is 99% stock. Fidelity is 100% stock. & so on...

So, yes, he is recommending a 100% stock portfolio.

I just looked at Vanguard. They have multiple balanced funds.

VBIAX is 60/40
VSCGX is 40/60
VASGX is 80/20
VASIX is 20/80
VSMGX is 60/40

So there are plenty of growth and income funds that are not 100% stock and that's just at one company.

[MonkeyMama]

Yes, but these are balanced funds. If you take the "Growth and Income" designation seriously, you aren't going to be looking at balanced funds. You are going to tell your advisor that you want "growth and income." Or you are going to google "growth and income." Which will give you a 100% stock allocation, most likely.

[BuckyBadger]

I find this incredibly difficult to believe. If there is one thing he is vehemently opposed to it is taking out loans for anything at all except a mortgage. I can't imagine that he would be doing radio ads for car loans. If you are able to verify that, I would love to see proof of that ad.

I was also very surprised, but it's what I heard. I remember it specifically because I was so surprised. I'll see if I can google myself up some proof.

[disneysteve]

I was also very surprised, but it's what I heard. I remember it specifically because I was so surprised. I'll see if I can google myself up some proof.

That would totally destroy his credibility since he has built his career on saying just the opposite. If you find anything, please post it.

[BuckyBadger]

That would totally destroy his credibility since he has built his career on saying just the opposite. If you find anything, please post it.

I don't have speakers on my computer, but I asked on my local city message board and a number of people have heard it. If someone wants to listen and let me know if it's the ad I'm thinking about?

http://www.city-data.com/forum/raleigh-durham-chapel-hill-cary/1915135-anyone-else-hear-dave-ramsey-hawking.html

Here is the direct link to the YouTube, but YouTube is blocked at work:

http://www.youtube.com/watch?v=OAW8LUi9Dc4

[disneysteve]

Bucky, that is Dave Ramsey but he doesn't say a word about car loans. I couldn't imagine he ever would. He is promoting buying used cars which is certainly well in line with his normal advice.

[BuckyBadger]

Bucky, that is Dave Ramsey but he doesn't say a word about car loans. I couldn't imagine he ever would. He is promoting buying used cars which is certainly well in line with his normal advice.

Okay.

I think it's pretty unseemly for a financial advisor to shill for a car dealership, but maybe that's just me.

I stand corrected about the loan part.