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The bolded is true. Thing is, people like you are not his target audience. His target audience is the 70% of America who live payday do payday or who are going further in debt and who are financially clueless.
I agree. It would be hard to give advice that fits all people in all situations. I haven’t listened to him much, but from what I did hear nothing sounded crazy. Seems like he’s very big on little to no debt which is simple but good advice for the majority of people.
He's crazier than I thought. An unskilled wage earner with very little net worth can afford a new Kia with the kind of terms now being offered, cannot get to work in most areas without a car, and the prices of used cars are no longer affordable for what you get, along with the difficulty of financing a used car.
It is clear that DR and all the other brilliant financial advisors have absolutely no idea what life is like for people with under a million, in fact have never even driven through their neighborhood.
Dead wrong about DR. He lived it. He's all about the thrift, so you can live much better in a little while.
FWIW, we bought a car with 35,000 miles on it , cash. It now has 215,000 on it.....have not spent much on it. Runs great. We have gotten our money's worth out of it and then some. (Same exact story with our newer car).
Location: Formerly NYC by week; ATL by weekend...now Rio bi annually and ATL bi annually
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Quote:
Originally Posted by Rocko20
That $5K car would still cost you another $8K-$15K in repairs, gas, maintenance, insurance, etc. over the course of years of driving.
There's no "cheap way" to own a vehicle. You just have to pick your poison.
There's a reason people abandon broken down cars on the side of the highway. Because they couldn't afford to take care of it and they can't afford to fix it....And those are the "$5K cash cars."
1. First off, thats a falsity that the 5K car would cost you tons of money in repairs. If you know cars, tons of cars at that price point are super reliable and have depreciated to that value. They are far from beaters. I keep a new luxury vehicle and a cash daily car.
2. Thats just completely false.
There are lemons at all price ranges due to the varying issues of different makes and models. Everything from MB, Rover, BMW, to Chevy, Honda, Kia, etc have issues. The problem that arises in such cases as your extreme anecdotal is that the individual cannot afford to fix it. So while a very inexpensive car may be abandoned on the side of the road, that Range Rover with the blown head gaskets and bad air ride suspension was detailed and put on the lot for resale to an uneducated unsuspecting buyer.
Lets try and keep the narratives straight people....
some of Dave’s advice is great others make me scratch my head. I agree that many people in this country live beyond their means. Too many posers driving BMW’s and Mercedes they can’t afford the maintenance on after the shine wears off. If we actually did this not buying new cars thing we wouldn’t have much of an Auto industry. Just act responsibly. Do the math.
some of Dave’s advice is great others make me scratch my head. I agree that many people in this country live beyond their means. Too many posers driving BMW’s and Mercedes they can’t afford the maintenance on after the shine wears off. If we actually did this not buying new cars thing we wouldn’t have much of an Auto industry. Just act responsibly. Do the math.
Just IMHO, but I would guess that if financing didn't exist the auto industry would still be around, just in a much different form. I would think it would mostly be Toyota Corolla, Honda Civic, Mazda 3 type cars that would have a lot less bells & whistles and would cost 12 grand or less new. I would guess the industry would stop rolling out a new car every year and instead bring them out every couple years, as they already do with the generations of a given model.
Just IMHO, but I would guess that if financing didn't exist the auto industry would still be around, just in a much different form. I would think it would mostly be Toyota Corolla, Honda Civic, Mazda 3 type cars that would have a lot less bells & whistles and would cost 12 grand or less new. I would guess the industry would stop rolling out a new car every year and instead bring them out every couple years, as they already do with the generations of a given model.
People would keep cars longer, too. Replacing a car because you're tired of it or because it needs a $800 repair would become a rare thing.
Dave Ramsey's advice is sound but targeted towards a certain audience. The people who benefit from his advice tend to be heavily in debt. His baby-steps are not for everyone. Not everyone wants to pay off their 30 year mortgage in 10 years or buy only $10k used cars with cash.
Personally, I would rather pay off a mortgage over time in depreciated dollars and invest more in stocks with a higher ROR. Financing a new car is not the worst thing in the world if you can afford it.
I know a guy that took Dave's advice and bought a four year old Corolla from a dealer. A month later, the key broke off in the ignition...cost him 950 to fix. Cars have way too much proprietary electro ics that can be quite difficult to diagnose and fix. General Motors has kept more people down. than the Liberals. I can take the bus, subway, ferry boat, taxi, or walk...with a paid for home, a car would cost more than I spend on everything else, combined. I have enjoyed listening to Dave, before, but most of the callers have strong income and weak brains. Never heard him once advocate living in a walkable area and going without a car. A smaller house on a valuable lot is where the value is. Drive till you qualify fueled the last housing boom, but they also required huge auto expenses that they would never get back...even if oil went to thirty bucks per barrel. The home values in the exhurbs were the first to fall and the last to bounce back..granite countertops and all....
Never heard him once advocate living in a walkable area and going without a car.
That's because something like 95% of the country is set up to require a car. Maybe 90% if you take his "beans and rice" mentality and apply it to transportation. Advising people to live car free just isn't a feasible suggestion for most people.
Not to mention that moving itself isn't a cheap or easy thing to do, especially if you're broke and in debt.
Also don't forget that very walkable areas with good transit usually cost a lot more.
He does frequently use the line "I'll ride a bike before I take out a loan on a car"
That's because something like 95% of the country is set up to require a car. Maybe 90% if you take his "beans and rice" mentality and apply it to transportation. Advising people to live car free just isn't a feasible suggestion for most people.
Not to mention that moving itself isn't a cheap or easy thing to do, especially if you're broke and in debt.
Also don't forget that very walkable areas with good transit usually cost a lot more.
He does frequently use the line "I'll ride a bike before I take out a loan on a car"
As an aside:
I ended up with an unusual desire to find the most cost effective way to commute and succeeded in finding a bus route to my work. There is a spot a block from my house that drops me off right in front of work. $2.25 round trip per day. I ended up selling one of my cars for some extra cash and no rely on the bus to commute. Overall, a net savings. I can't necessarily credit Dave Ramsey directly, but the desire to lower costs to pay of debt (and not driving Duluth's hills in winter) really gave me to urge to do the research.
I do ponder if far more people are in bus/transit corridors than they know. They would simply have to look it up.
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