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Lol...well, 30+ percent of that will be eaten in taxes. Then figure in retirement, normal savings, and just day-to-day life.
It'll take longer.
Exactly, and you don't know what kind of other things they have going on.
Maybe they are providing some support for a family member or there's some other expenditure of money that wasn't really important to mention. Maybe they maxed out their retirement accounts and still wanted to have a nice vacation.
Who knows.
Quote:
Originally Posted by selhars
Dave doesn't give enough space to the 'happy medium' -- sometimes you need to use credit but don't go crazy-irresponsible with it. I do not believe that just because you can't pay cash for it means you can't afford it.
I like Dave, and you really have to consider the people he is trying to help when you consider the tone he takes sometimes. Dave makes no bones about the fact that he has his luxuries too.
Now the thing that gets me is he really doesn't teach anything more than common sense and has made a fortune doing it.
There was a time when I was young, stupid, and had to have the newest sports car with custom wheels and all that. I must've driven all over the country in that thing. I put myself $30K in the hole between the car and 4 credit cards. It was very hard for me to sit down with my fiance and show her my real financial state. Bless her heart she married me anyway and we came up with a plan to pay it all off.
I was making about $20K a year in the military, and she was making a little over $15K in a civilian job....again we were very young. Well, I got a second job and together we paid off that debt in about 2 years, maybe a little more, using the same principles Dave teaches regarding paying down debt.
Now, we still have credit cards, but no debt. We go against Dave's principle of not using them for points because we do pay it off every month. One time I heard him give in to a caller and state that in their case, maybe it's ok and works for them. But he will not advise it.
This was in 1995-1997. Why didn't I trademark a Total Money Makeover of my own back then? Because I still wasn't that smart.
It would take a modest couple making that amount 15+ years to even attempt to save up enough cash to even buy a modest $100k - $150k home all in cash.
I don't know anything about Dave Ramsey, but whats wrong with saving your money for something? The alternative to the about is mortgaging the $150K home and pay it off in 30 years, which makes the REAL cost of your home somewhere in the neighborhood of $300K once you figure in the interest payments. The smart way to do it is to mortgage the house and make extra principal payments every month. I'm doing that with my mortgage, and this strategy is turning a 30 year mortgage into a 12 year mortgage, at a savings of over $100K in interest payments.
I don't know anything about Dave Ramsey, but whats wrong with saving your money for something? The alternative to the about is mortgaging the $150K home and pay it off in 30 years, which makes the REAL cost of your home somewhere in the neighborhood of $300K once you figure in the interest payments. The smart way to do it is to mortgage the house and make extra principal payments every month. I'm doing that with my mortgage, and this strategy is turning a 30 year mortgage into a 12 year mortgage, at a savings of over $100K in interest payments.
There's nothing wrong with saving your money for something. That's what he encourages....no debt. Mortgage is "ok" because most people can't afford to pay cash for a home.
Your approach is along the his principal. Though he would say you should have taken out a 15 year mortgage and paid extra if you could. This only after all other debts are paid off entirely (with no new debt), an emergency fund is established and you are saving for retirement. (feel like I'm missing something else...anyway).
I understand the long term savings of the 15 year mortgage. With the couple of houses I've purchased I was concerned about locking myself into a higher payment. I wanted the flexibility to not pay as much or make the minimum if circumstances required me to.
Of course, it takes discipline to make the extra payments on a 30 year mortgage. And discipline is something that a lot of Dave's guests have lacked. Therefore, he pushes for it.
People who have no common sense about finances and are in trouble could probably use his advice. That's about it.
I still like listening to him even though the only debt I have is my mortgage, and I plan on staying that way.
Every now and then he'll throw something out there about estate planning, real estate purchasing/selling or business approaches that I find interesting and/or useful.
I personally practice what Dave preaches. Zero debt and only use credit cards that give rebates(no carried balance).
I wonder how many businesses would go under if everyone followed Dave's advice. Or better yet, let our country stop spending until we have zero debt.
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Dave Ramsey
