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I used to listen to the Dave Ramsey show on talk radio everyday until I got tired of hearing these wealthy people calling in asking for advice of what to do with the $200k settlement they just recieved, or how to spend the $1,000,000 inheritance they just got from someone passing away, or because they make $300k a year and don't know what to do with the extra $125k.
Now I was just in another forum where people were saying that me and others like me who struggle with poverty are basically stuck in this situation based on our own stupidity. Well, from my point of view these people who have so much extra money to throw around and have no idea what to do with it or how to invest it are pretty damn stupid to me. Any of us bottomfeeders would find a way to use that money to help people or double up on it.
Why do rich people call in on these shows as if they are struggling with how to spend all that extra money. I thought you had to be intelligent to make money in the first place after what some other posters on here said about us folks in the lower income bracket.
They are not struggling to spend the money they are struggling to invest it. That is the problem that you have right there. Poor people can never be rich but not because of ability, they can not be rich because of the mindset that they have. Lots of rich people started out poor and built fortunes without the help of an inheritance. They have a mindset that makes them rich. You can have the same mindset as well. You can infact get rich over time.
He doesn't say to drive one forever, just until you're out of debt.
Lets say that you pay off your debt and then save for a new car. I would bet that many people could do just that. Imagine paying cash for a car and then probably never having to drive a beater car again. I mean you save up, pay cash, drive that new car for 10 or more years, taking care of it and saving up for another new car.
He doesn't say to drive one forever, just until you're out of debt.
Yes, but even when you're out of debt, he still says don't finance a car -- save up and pay cash.
That's always been my goal, but it's never happened. The reality is, I'm sure many people say once my car payment (or any payment) is paid off, I'll bank that money and save it, but how often does that REALLY happen. When I've freed up a car payment (let's say $300) -- I might bank 100 or 200 of it -- but I'm also not going to apologize for using some of that freed up money on other things that have waited while I had the car payment.
1) Whatever amount I save of the freed up car payment -- it's MORE than I was saving before, and
2) If I have to money for those other things that have waited, I'm going to take care of those things.
I've had GOALS of saving up and paying cash for a car -- but until now I've always needed a car BEFORE I was able to save enough to do that.
I'd never trade in a car every two years, but I'm also not going to drive a car I don't want, just because I only have $5,000 saved. I'm going to put SOME of that 5,000 down on a NEW car, make payments -- and, I HOPE, drive that new car WELL past the 5 years of payments. IF you payoff a car in 5 years and drive it another five -- that second five years gives you a chance -- to if not save up CASH for the next car -- and least a decent down payment.
Dave's scenario on cars has always seemed so unrealistic to me. If you're so broke you need to drive a beater, you have other bills and debts. So yeah, you pay a grand for the beater. But you're not saving that $400-600 a month that you aren't paying on a car payment -- you're using that to pay off your other debts.
I assume that'll take years, because really, who has, like, $1,000 in other debt? We're talking about several thousand, at least, usually in things like credit cards and student loans and medical bills, and they are ogres on the monthly payment scale. So maybe the other debts are paid off in four years -- but your beater didn't last that long, I bet, and so you probably didn't get anything for it and had to junk it and you're still without a decent car and have to forestall the debt repayment to save up ANOTHER grand for another beater, and on and on.
Screw that -- get a reasonable car payment on a decent used car through a credit union and you've at least got a chance of the car lasting several years.
Dave's advice is very simple and targets those who lack financial knowledge and discipline. I'd say theajority of people that fit those categories are mid to low income earners.
Baloney.
There are a LOT of people at the higher income levels that are completely incompetent with their money. I have seen several cases where I have received garnishment papers for employees making $100k or more.
If you listen to the show, there are as many people calling at $80k+ as there are low income.
There are a LOT of people at the higher income levels that are completely incompetent with their money. I have seen several cases where I have received garnishment papers for employees making $100k or more.
If you listen to the show, there are as many people calling at $80k+ as there are low income.
Sure. Just more who don't know about finance at lower income levels.
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