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Old 05-29-2013, 07:13 PM
 
Location: None of your business
5,466 posts, read 4,410,637 times
Reputation: 1179

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Quote:
Originally Posted by RazorRob305 View Post
Solving my problem? If I expected to have people solve my problem then I would have more friends. Sometimes people actually come on here to share experiences so they don't feel like the only ones going through it, and to put it down for the record in case things work out and some day people can read back on these threads and see what someone overcame.

Why is everyone a doctor on here prescribing solutions for people of all different colors, cultures, and dna? You may see people like me as a complainer when I'm actually just sharing my story to people I don't know, but if you wanna see complainers, you should see people that I am around day to day in the real world who complain about things as they have people around at the workplace to vent to and act like they have sympathy.

Me, I'm the guy keeping his head down doing my job, and making people laugh at work. I would bet that most of you people who 'think' I am a complainer are the same kind of people I see everyday when I'm focused on my job as they chat it up in thier little clicks. I know people like to make themselves feel better by making someone else feel smaller on internet forums, but that's not me. I ain't down with that high school mentality.
Man, your situation stinks Ok now what? [not being sarcastic]

Read Rich Dad Poor Dad, that will help you see the difference how the rich and poor view money differently. Hey, it's a start.
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Old 06-05-2013, 06:03 AM
 
5,500 posts, read 10,497,076 times
Reputation: 2302
Dave got owned a bit. Had the guy on his show and came off looking like an idiot with how he handled himself.

Dangerous Retirement Planning Advice From Financial Guru Dave Ramsey
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Old 06-05-2013, 06:23 AM
 
7,214 posts, read 9,369,028 times
Reputation: 7802
Quote:
Originally Posted by Gatornation View Post
Dave got owned a bit. Had the guy on his show and came off looking like an idiot with how he handled himself.

Dangerous Retirement Planning Advice From Financial Guru Dave Ramsey
You can nitpick the numbers, but the spirit of Dave's advice is still correct. Most people will end up saving much more than $100/month over 40 years, if they are serious about investing and retirement.
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Old 06-05-2013, 12:07 PM
 
Location: Tennessee
37,762 posts, read 40,870,361 times
Reputation: 62051
Quote:
Originally Posted by RazorRob305 View Post
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.
I've never listened to Dave Ramsey's show. I'm going out on a limb and guess his show is like any other radio show. He has a demographic who listens to him which attracts advertisers to pay for ad time to reach that demographic. Advertisers on Dave Ramsey's show are probably not targeting their financial products and services to poor people. In other words, Dave Ramsey and his advertisers want wealthy people to call into his show and he cultivates that kind of audience.

Now why wealthy people want free advice instead of paying someone for it --- well, isn't that why they're rich?
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Old 06-05-2013, 01:43 PM
 
7,214 posts, read 9,369,028 times
Reputation: 7802
I would say the posters above haven't listened to a lot of Dave Ramsey's show then if they think it's targeted mostly to rich people. There are tons of calls from people who are teetering on the brink of bankruptcy.
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Old 06-10-2013, 11:06 AM
 
9,639 posts, read 5,990,832 times
Reputation: 8567
Quote:
Originally Posted by MaseMan View Post
I would say the posters above haven't listened to a lot of Dave Ramsey's show then if they think it's targeted mostly to rich people. There are tons of calls from people who are teetering on the brink of bankruptcy.
Well obviously. He caters to people who don't know about personal finance. There's a sucker born every minute.

Quote:
Originally Posted by Gatornation View Post
Dave got owned a bit. Had the guy on his show and came off looking like an idiot with how he handled himself.

Dangerous Retirement Planning Advice From Financial Guru Dave Ramsey
Motley Fool... "Shudder" They do realize they're pandering to fools just like Ramsey is... right?
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Old 06-10-2013, 12:27 PM
 
Location: Los Angeles (Native)
25,303 posts, read 21,357,414 times
Reputation: 12318
Personal Finance is just something that many people seem to not understand. I started listening to Ramseys podcast pretty recently. I think he does give good advice and he's pretty entertaining to listen to. Getting out of debt is definitely an important goal.
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Old 06-10-2013, 08:20 PM
 
30,876 posts, read 36,825,967 times
Reputation: 34462
Quote:
Originally Posted by eRayP View Post
Man, your situation stinks Ok now what? [not being sarcastic]

Read Rich Dad Poor Dad, that will help you see the difference how the rich and poor view money differently. Hey, it's a start.
Not a great book, but his points on how the rich, poor, & middle class think about money were among the better parts of the book.
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Old 06-10-2013, 08:48 PM
 
30,876 posts, read 36,825,967 times
Reputation: 34462
Quote:
Originally Posted by MaseMan View Post
You can nitpick the numbers, but the spirit of Dave's advice is still correct. Most people will end up saving much more than $100/month over 40 years, if they are serious about investing and retirement.
I don't think the article was nitpicking. They did point out all the good things Ramsey does and that they agree with most of what he says. The difference between 12% and 10% (the real return of the S&P 500 since 1926 including dividends) over an investing lifetime is absolutely HUGE.

$100 per month after 40 years at 12% is $1,188,242
$100 per month after 40 years at 10% is $637,678

A lot of people probably won't even get 10% returns even if that's what the S&P 500 returns because they lose their nerve and sell stocks when they're down.
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Old 06-12-2013, 02:08 PM
 
Location: TN/NC
34,914 posts, read 31,030,575 times
Reputation: 47280
I've listened to Dave a lot and generally like him, and while I agree that he has done a lot more good than harm, most of his advice does rely on good incomes.

I *think* Dave recommends paying no more than 10% of your take home income over a three year term on a car payment. I'm single and make $38k a year, currently netting ~$2,450 a month, so I should pay no more than $245/month in auto payments. Assuming I'm paying 0% interest and that the entire $245/month goes to principal over the next three years, that's still a sub $9k car. When factoring in interest costs, I am going to have to go even cheaper to stay within Dave's limits. I'm not doing badly for the area, but I can't afford much of a car according to Dave. What are people who make even less money to do if they stay within Dave's guidelines?

Cars this cheap are usually older and likely (but not always) will have to have considerably more money budgeted for maintenance costs. I just got out of a car that was becoming a money pit. I bought a used 2005 Murano last year and had already spent $1,200 on it in maintenance costs, and it was needing another $1,000 - $1,500 in repairs immediately. The fuel savings alone going from the Murano to a 2013 Hyundai Elantra will save me between $50-$75/monthly in gas. Counting the repairs that needed to be done on the Murano NOW along with the gas savings makes up the difference in payments for at least a year. Given the Murano's track record, it was likely to need even more expensive maintenance in the future. I have a bumper to bumper warranty on the Elantra that should last for the duration of my loan on the Elantra. In my case, I doubt Dave would have encouraged me to get this new car, but given my Murano's record of excessive maintenance costs and gas consumption, it felt like staying with the Murano was just throwing good money after bad. I could have gone with another used, even cheaper car, but didn't want to deal with the hassle again. While my decision may not be the most financially efficient, it gives me some peace of mind not having to fight with car maintenance frequently.

Also, many people simply don't make enough money to be able to have the large emergency fund needed to safeguard against having to borrow should a large expense come up. Dave's advice is to get a second job to get your income up. While this is common sense, this becomes much more difficult for older people, if the local job market is awful, or if one has a primary job without a normal schedule. Dave's advice on how to increase income is common sense but not practical for many segments of the population.

A single person who is having to pay for everything on their own on an average salary is going to have much less left over for debt repayment after basic needs than a couple or family where there are even more earners. This is a basic economy of scale. If you pay attention, Dave's callers are rarely single people.

This is from Dave's site on home buying. How Much House Can You Afford? - daveramsey.com

If you can't postpone the purchase until you can pay cash, buy a home with a down payment of at least 10% on a 15-year (or less) fixed-rate mortgage. Limit your monthly payment to 25% or less of your monthly take-home pay.

Let's see how Dave's advice applies to my hometown. Here is some information from city-data on Kingsport TN.

Estimated median household income in 2009: $34,019 (it was $30,524 in 2000)
Kingsport: $34,019
Tennessee: $41,725
Estimated per capita income in 2009: $23,235

Kingsport city income, earnings, and wages data

Estimated median house or condo value in 2009: $115,662 (it was $85,400 in 2000)
Kingsport: $115,662
Tennessee: $137,300

Read more: //www.city-data.com/city/Kingsport-Tennessee.html

A typical APR on a 15 year mortgage from a large credit union in the area is 3.25%

https://www.ecu.org/node/295

Using a $105,000 loan (median home value in Kingsport with about ~10% down), a 15 year term, and a 3.25% APR, the monthly payment is $737. Using the median HHI in Kingsport of $34,019, this equates to about $2,835 in GROSS HHI. The monthly payment for the median home on a 15 year term is more than 25% of the gross monthly median HHI before we factor in anything else. Other problems:

1) We're assuming that a household making $34k can save $10k for a ~10% down payment to begin with. Their income is so low that most all of their income is likely going to basic needs. There is likely little, if any, money left over.

2) We're also assuming that this household will have the credit to qualify for a 3.25% loan. This low income increases the likelihood of credit problems.

3) This household is going to be hit with PMI. PITI + PMI is going to be put this household into a dangerously high ratio for house expenses vs. HHI. Our area has very low property taxes. The situation would get even worse in areas that are just as poor, but have higher taxes.

4) Dave advises to save 15% of your pay for retirement. This household is unlikely to be able to afford contributing much of anything to retirement.

5) Dave also advises to be debt free and have the 3-6 month EF built up (excluding the down payment) before buying a home. If you take a three month EF as $10k on top of the $10k down, that's at least $20k liquid cash for the median household making $34k, plus all debt paid off.

Remember the numbers I've been using are the medians for my hometown before any taxes or other expenses are taken out. Half of the households in Kingsport are in a worse situation than the numbers I used.

Dave's show is helpful for getting people out of the mindset of constantly borrowing, but his debt reduction and "baby steps" advice, arguably his strongest area, requires a good income or an irregular living arrangement to even begin to implement. I don't disagree with his general thesis - "get out of debt, increase income, live below your means, invest, prosper," but it's just impractical for those on restricted incomes.
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