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You can't be serious! There is a liability factor with owing money on your personal residence. You owe and stop paying you lose it unlike phantom ownership in a company who can, at any moment, bankrupt leaving you with worthless stocks.
Do not get me wrong, I own individual stocks since I'm offered stock options with my company, but I would never leverage that risk against my home and place where my family is comfortable and safe.
You misunderstood me. I'm not talking about dragging out mortgage debt in order to invest, I'm talking about paying rent in order to invest more than one could with a mortgage payment and the other costs of having your own residence...
My father hates paying bills so much he often prepays several months on all of his utilities. No kidding. He has no mortgage or car payment and prepays his credit card as well. His car insurance is also prepaid 6 months at a time.
The monthly car insurance payment is newer. When we got married in 1983, 6 month premiums were the standard. No one I know of paid monthly.
In fact -- car insurance was one of our "dump account" payments. We set up a specific savings account to prepay monthly payments to ourselves in order to not have to stretch to pay it when the bill came due. Every paycheck we got a certain amount went in to cover the taxes, insurances, and other things. Then as the bill came due that amount would come out of the dump account into the checking.
I was listening to the Dave Ramsey show on the radio. He had a caller who was proclaiming he was "debt free". The caller owed around $120k in mortgage debt on a home and the caller was boasting about how he and his wife became debt free in 4 years. The caller went on to say that as a couple their income annual income was $150k.
I thought to myself, BIG DEAL! They made $600k in 4 years. How hard is it to pay off a $120k mortgage if you make $150k a year???
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I definitely am not a Dave Ramsey fan because his advice is overly conservative for anyone who has financial know-how; however, I'm not sure why you are rolling your eyes at that. Those people were smart. Most people buy houses that overextend their budgets for years and become house-poor or living month to month. Kudos to them. Also, while you can live comfortably on $150k, that is not some absurdly or uncommonly high salary, especially for a couple combined.
I definitely am not a Dave Ramsey fan because his advice is overly conservative for anyone who has financial know-how; however, I'm not sure why you are rolling your eyes at that. Those people were smart. Most people buy houses that overextend their budgets for years and become house-poor or living month to month. Kudos to them. Also, while you can live comfortably on $150k, that is not some absurdly or uncommonly high salary, especially for a couple combined.
The trouble is, even most who do have the "know how" still are saving too little. It's one thing to know what you should be doing, it is another thing to actually do it.
Many people devote a room to entertaining guests with cable TV. Many people eat out a lot. Many people have more housing space than they really need. Many families have 3 cars when they could make do wih just one. Many buy new clothes just for fun when the ones they have are perfectly fine. Many spend $25,000 on an engagement ring, wedding and honeymoon.
Omission of a single one of these listed items for 30 yrs would allow one of the family's children to receive a free, paid for first house, or a full education through profession school with no loans or aid whatsoever, and without the kid having to work at any point while in school.
While I certainly understand that being frugal may not seem worth it, I am fairly certain that even those who do understand compound interest, etc. are not acting in a way consistent with their values, because it is human nature to be short-sighted, whether you know you're doing it or not.
The fact that Dave Ramsey uses his evangelical megachurch network to hawk his products was a huge red flag to me. Talk to any megachurch member and they can recite Ramsey's philosophy like the gospel.
The other huge problem I have with Ramsey is his HORRENDOUS investing advice, which has been pointed out many times in this thread. Putting all of your assets in the stock market is a recipe for disaster. Not only that, but he pushes the investment funds that PAY HIM FEES to listeners of his radio show. Highly, highly unethical.
Ramsey is just another snake oil salesman who uses the church as a marketing machine.
The trouble is, even most who do have the "know how" still are saving too little. It's one thing to know what you should be doing, it is another thing to actually do it.
Many people devote a room to entertaining guests with cable TV. Many people eat out a lot. Many people have more housing space than they really need. Many families have 3 cars when they could make do wih just one. Many buy new clothes just for fun when the ones they have are perfectly fine. Many spend $25,000 on an engagement ring, wedding and honeymoon.
Omission of a single one of these listed items for 30 yrs would allow one of the family's children to receive a free, paid for first house, or a full education through profession school with no loans or aid whatsoever, and without the kid having to work at any point while in school.
While I certainly understand that being frugal may not seem worth it, I am fairly certain that even those who do understand compound interest, etc. are not acting in a way consistent with their values, because it is human nature to be short-sighted, whether you know you're doing it or not.
I agree with that and to that end there are people that need Dave Ramsey. But if you have know-how, you don't need him. He simply provides some elementary level of know-how. But if you have drive and some rudimentary knowledge of budgeting, there are several rules of his that should be broken in regards to credit cards, paying low interest loans off, etc. He provides a starting off point, but some of his rules are too conservative for people looking to save AND grow versus just save and not be in debt.
I agree with that and to that end there are people that need Dave Ramsey. But if you have know-how, you don't need him. He simply provides some elementary level of know-how. But if you have drive and some rudimentary knowledge of budgeting, there are several rules of his that should be broken in regards to credit cards, paying low interest loans off, etc. He provides a starting off point, but some of his rules are too conservative for people looking to save AND grow versus just save and not be in debt.
Agreed, Dave is an "elementary household financial management" teacher, not good for advanced level stuff.
I used to listen to Dave Ramsey every afternoon at work for 3 hours while working and I tell you I started paying off my debts one by one and soon thereafter was able to retire debt free. He does a lot of good. He's not perfect but he has some good advice. You have to apply tips that fit your unique situation, some work, some don't.
I like his sayings like: "Act Your Wage" and "Until you're debt free you're not going to see the inside of a restaurant, unless you are working there!" He was a great influence in getting my financial house in order. At one time
he was at the bottom of the bucket like a lot of folks, knee deep in debt. I don't really care about his religious affiliation or how much he's making I only care about what good he has done for so many who could benefit from his instruction.
My accumulation of assets took off after taking on debt.
If you lost your job, could you still make the payments?
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