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I really like the Dave Ramsey approach on a lot of things But like you said he overlooks (whether purposefully or not) the facts about vehicle maintenance, upkeep, state-specific fees and registration; he overlooks tips on how to buy/sell vehicles properly so as to not get ripped off on technicalities in paperwork
It's almost as if he's saying,
"Aw heck, get a $1000 car and drive it to work -- who cares if you get pulled over for having it not registered, at least you tried to drive it to work! Work work work. Focus on work. Need a car to drive to work? Buy it and go to work! Don't stress the small stuff, the technicalities involved. Live in your car! Live in your job's parking lot! Beans and rice, baby."
And I don't do investing because if I don't understand how something works, I just don't do it because I'm distrustful of letting other people manage stuff I feel I should know about
Dave Ramsey promises over and over, "12% if you do mutual fund IRA through my ELPs!"
Right off the bat there's numbers, percentage signs, and acronyms that escape my understanding; and meanwhile in practice people are saying in reality, "8%, mutual fund IRA, when you're so damn old and senile and dried up that you don't even know how much money you've accumulated or fees you paid"
Before I do anything, I will do my research (however long that takes before things "start to make sense")
But I still enjoy his program so much because it gets my mind thinking in those directions,
Which is better than no direction
I don't think he overlooks them, but more ignores those things because one should have enough common sense to know that those things apply. You can really get into the weeds nickel and diming every small cost that pops up. You have to set a goal to work towards. The emergency fund will catch a lot of those unexpected things. When you are drowning in debt, you NEED to work, work, work to get caught back up. Just part of it.
Dave Ramsey needs to get his head out of his you know what...
AND if EVERYONE only bought with cash and NEVER financed, then a whole industry including the car market would wither away.....
And the analogy that if you can't pay cash ($30,000 to $80,000) then you can't afford it is STUPID!!!!!!!!!!!!!!!!!!! NOT everyone can afford to do this.. Actually most people can not afford to do this.....
Most people are financial morons who don't want to hear that they should wait to buy that shiny trinket until they can afford it. They are like the crowd busting down the doors and maxing out their credit cards on Black Friday because they are "saving money."
He's made gaffs on the radio before which are pretty eyebrow-raising
He said he has only x number of things in his wallet, "My driver's license, my credit card... CRAP! No, not credit card. I didn't mean that, believe me. I meant to say, DEBIT card."
He admitted he wasn't actually Christian:
Dave: "They call Chris Brown around the office [not Chris Brown the musician but Dave's friend and an author of some book] 'the Christian Dave'."
I don't think beater cars work unless you have a back up. For example, if you are an 18 year old and your beater car dies, you can borrow dad's car until you can get your car fixed.
However, if you are on your own and you need dependable transportation driving an old pos is a poor choice.
I think a better solution is to buy a new compact car with a new car warranty, e.g. Corolla, Elantra, Impreza. The payment will be manageable and you will enjoy many years of reliable, safe driving.
For example, an Elantra comes with a 5 year bumper to bumper warranty and a 5 year roadside assistance warranty. It also has a 10 year engine/transmission warranty. The warranty eliminates unpredictable expense. An old car can have big expenses e.g. a blown transmission can easily cost $3K to fix.
Think about all the other continuous expenses you have in life: rent, utilities, food, etc. You pay for all of those as you go. Why should a car be different?
It shouldn't be any different. Do you borrow money to buy rent, utilities and food? Food is an excellent example. We all know what food turns into. A car does the same. You can buy a new car, but you can't drive one. As soon as you buy one it starts that journey to solid waste. Instead of borrowing money to manufacture solid waste out of prime rib, pay cash and manufacture the solid waste out of chicken.
I bet you love three card monte. 0% interest is just sucker bait. You pay the interest up front in the purchase price, and of course if you ever miss a payment it reverts to a high interest rate.
The purchase price isn't affected by 0% financing, unless you mean the loss of rebates the manufacturer might otherwise provide.
To everyone talking about financing a depreciating asset - that's what leasing is for.
Leasing is still paying for the depreciation and the financing.
Quote:
Originally Posted by MDrenter223
I hear that over and over again.
But it's exactly why you should finance.
Why pay cash for a tool that has a 10 year life span?
That's like saying lets only pay cash for schools, or bridges, or roads.
It also leads people into thinking only about the cost of gas when using those cars. They see the cost of the car as a sunk cost.
It's much more practical to determine the total cost to own over 100,000 miles (or whatever your must sell at mileage is, I don't do more than 100k as car safety is always improving and that's critical to me as a parent).
You pay cash for something that depreciates because...
It limits you to lower priced options so you spend less
If your financing something its usually for a large amount, in other words you can't afford it but you can afford the payments. Financing such a large amount is financial suicide unless its something that you would reasonably believe will appreciate or generate income. Example...you finance stuff for a business, your education, an investment property....all things you expect will increase your income and/or net worth in the long run.
Quote:
Originally Posted by Northeaster
Depreciation is based on model, as you stated, so you'll feel that even if you pay cash. That's just buying a bad car.
Depreciation is fairly even across all typical models and brands. Very few cars break this trend.
Yes you will lose the depreciated value of a new car regardless if you finance or pay cash. However paying cash has the benefits I mentioned above.
To everyone talking about financing a depreciating asset - that's what leasing is for.
Quote:
Originally Posted by Wannabeliber
He's made gaffs on the radio before which are pretty eyebrow-raising
He said he has only x number of things in his wallet, "My driver's license, my credit card... CRAP! No, not credit card. I didn't mean that, believe me. I meant to say, DEBIT card."
He admitted he wasn't actually Christian:
Dave: "They call Chris Brown around the office [not Chris Brown the musician but Dave's friend and an author of some book] 'the Christian Dave'."
I still enjoy his program though
How is that admitting that he isn't a Christian? Dave Ramsey is a financial talk radio host, who is obviously Christian, and Chris Brown is a Christian radio show host.
He admitted he wasn't actually Christian:
Dave: "They call Chris Brown around the office [not Chris Brown the musician but Dave's friend and an author of some book] 'the Christian Dave'."
Quote:
Originally Posted by JONOV
How is that admitting that he isn't a Christian? Dave Ramsey is a financial talk radio host, who is obviously Christian, and Chris Brown is a Christian radio show host.
I agree. I think the reference was to the type of stations where you find the respective hosts (Chris Brown exclusively on Christian radio stations vs. Ramsey typically on secular radio stations).
Location: New Albany, Indiana (Greater Louisville)
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A few years back I heard Dave Ramsey say to never buy a brand new car but instead buy something a couple years old for half as much because you still have 75% of it's life left. That makes sense to me, as long as you go with a better make of car. If he's now saying to buy something for $4000 then I would disagree. Even the best makes of car will need work done like flushing fluids (that the previous owner probably put off), exhaust system can rust, etc. You also have to count in PTO lost or even unpaid time off work for a car that always needs work.
As for buying things in cash... that's great if you can. On cars I put over $5k down on something I'm buying for $12k and then my monthly payment is only $150 a month. The big problem is low income people putting zero down and being stuck with a $400 a month payment plus high car insurance.
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