Dave Ramsey - Don't Get It (payments, rate, account, increase)

[dazzleman]

Originally Posted by dbbd

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 liked watching his show. I do think it's a good idea to minimize debt, and to only use it for certain purposes.

[Huckleberry3911948]

i read carefully your post.
the great evil of our time is when confronted with paying for something rather than charging it, we begin to chant, "let's be realistic".
the word "saving" has been dropped from our vocabulary.
dave ramsey is talking a language and set of values which was normal and common 50 years ago.
we have as individuals and collectively-- have gone stone blind to the dangers of debt. this happened in 50 short years. they dropped home economics in high school didnt they?
let me esplain you, when u gota pay for stuff, it makes u rethink how bad u want it. if i gota reach in my pocket and clean out the wallet i think real hard
whether i wana foo foo coffee at starbucks and a breakfast snack for $14 bucks (gota tip too) or just put on the coffee pot b4 i leave the house and reach in the frig for a bagel..
plastic and checkbooks are magic money, stop that.
as to your comment that if they are making 6 figures no big deal why not float a loan? i know people who cant make rent on 85k a year. its not about how big is the cash bag its about the holes in the bottom of the bag. and americans got holy bags very holy.

[dazzleman]

Originally Posted by Huckleberry3911948

i read carefully your post.
the great evil of our time is when confronted with paying for something rather than charging it, we begin to chant, "let's be realistic".
dave ramsey is talking a language and set of values which was normal and common 50 years ago.
we have as individuals and collectively gone stone blind to the dangers of debt in 50 short years.

Exactly.

[Tallysmom]

Dave Ramsey is the solution for people who are debt-oholics. He's a 12 step program for them.

I've never been in trouble with debt and will never be in trouble with debt. Therefore I don't get him either.... but I'm glad he's out there preaching to those that do.

I do get tired of the whole "black and white" context of the internet though. Most of us live in a gray world, where things aren't black and white, good or evil -- they're somewhere in the middle.... in the gray. It's a nice place to live.... people ought to try it more.

[Zembonez]

Anybody assuming dear old Dave's callers are random callers is probably in for a shock. I'm sure most of it is a scripted show... just like all of the others. It's about getting Dave's message out... not helping callers.

[DellNec]

I think some of his advice works and the principles he espouses about debt are good but in the real world not everything is black and white.

I don't agree with his cash for buying a car philosophy or the mortgage one. If you take a 15 year note vs. a 30 year note, you end up paying higher monthly payment amounts, if you lose your job then you can sink quicker with a 15-year note. Most people DO NOT keep a home for 30 years, the average time span people stay in a particular home is around 5-7 years, they then sell it and move on.

There is also a "religious" twist to the show. Which always made me wonder. When TRUE peace comes from God, then any "financial peace" here on earth is temporal and can be lost at any moment. So in reality there is no such thing as true "financial peace" because we are fallible people living in a fallible world. We can be debt free one day and then in debt the next when hit with life's calamities.

[Donn2390]

Originally Posted by DellNec

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???


Then another caller stated that he & his wife made $175k a year in income and they were debating about whether or not to get a $200k mortgage on a custom home. Dave Ramsey went on to say that they should only pay CASH for the home but he gave them an "exception" because of their income but warned them about getting into debt.

Even if they took out a $200k mortgage, if they make $175k a year they can pay off that note in 3 years if they save their money.


I agree with some of his principles but some of the calls and advice he gives seems off the wall. Most people don't make $150k-$200k a year. How is one supposed to save $150k in cash to buy a modest home if they make $30k a year? 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. Where do they live in the mean time? They would have to rent and renting is dumping money into someone else's pocket.

On numerous occasions Dave Ramsey totes that one should never take out a loan on a new car, the car purchase should be paid in cash.


Does anyone else find his advice unrealistic at times?

You are assuming the guy who makes $150K a year lives free and has no other bills but for his mortgage. The guy who makes $150k, or $500k a year, probably spends a good % on other things. Living is expense, and if you have kids, it's more expensive. Those big salary guys are probably lucky to make the payments every month, let alone spend their entire salary to pay off their mortgage in three or four years..
Paying cash for everything will save you a fortune in interest over the years. If you can afford to do so, pay cash for everything..!!!

[Caltovegas]

Originally Posted by mikecu

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.

Consider the economic situation now. Credit is basically locked up and people are out of work. When people had easy access to credit times were good. Once they open up the credit markets again people will buy in bulk and get in debt again and the whole thing just completes another circle.

How many people can actually live off their weekly earnings?

[DellNec]

Originally Posted by Donn2390

Paying cash for everything will save you a fortune in interest over the years. If you can afford to do so, pay cash for everything..!!!

Yet at the same time, most millionaire and even billionaires started off by BORROWING money to get a business going. Most of the Fortune 500 companies started off as tiny business or idea but BORROWED money to build their company.

Once again, not everything is as black & white as "pay cash for everything". If that were true then there would be no IPhone/Apple today.

I borrowed money to start my first business. I actually took out a home mortgage equity loan and took that money to start a business. It was the best decision I have done in my financial life.

[treasurekidd]

Yet at the same time, most millionaire and even billionaires started off by BORROWING money to get a business going.

That's different. Personal finances and business finances need to be kept 100% separate. YOU don't borrow money to get a business of the ground, the business does.