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No one plan works for everyone. And FPU is no exception. But in a world where people are paralyzed by decisions and don't want to pay for advice, Dave provides a frame work.
Is it inefficient? Yep.
But is it better than nothing? Yep.
And does it open people's eyes to living w/o stupid debt? Yep. (Won't get into bad debt vs good debt, as that's a can of worms, but generally I abide by the approach that daily expenses are to be cash flowed and capital investments are to be leveraged (car, house, quality education).
Too late. I finished undergrad with zero debt. What do I do now?
My parents bought cars in cash. Should I tell them to go take out a loan against their cars that they own outright?
Seems rather silly to say those things must be leveraged.
How can you go back in time? The advice - any advice really - is about future action.
Still, the point is that it seems absurd to insist that these things ought to be leveraged. And the effects of past actions are very much relevant to future ones too, no time machine needed. If the fact that I have no student loan debt is going to hurt me, I better start preparing.
Too late. I finished undergrad with zero debt. What do I do now?
My parents bought cars in cash. Should I tell them to go take out a loan against their cars that they own outright?
Seems rather silly to say those things must be leveraged.
They were examples of things that could be leveraged and not be a sign of trouble.
If you're buying groceries with debt, that's an issue as those are used in the here and now. If you're buying something that's a durable good there's no real issue with going into debt for it.
The boot example. You can cash flow boots that cost $10 and last a year, or you can borrow to buy boots that cost $50 and last a decade. Unless there is some usury level interest going on the leveraged boots are a better idea.
Few people can pay cash for homes or college. Neither my wife or I have a penny of undergrad debt, but given what our degrees are worth it would have been perfectly acceptable to have gone into debt to get them.
Cars. Well you certainly drive a beater until you've saved enough to buy something nice, or you can get 0% APR and have the latest and greatest in safety features right now and drive a much safer car for the next 60 months.
And man if we used Daves anti debt for school stance we'd have very few Dr's, lawyers, pharmD's, Dentists, Vets or most any other non funded PhD professional.
They were examples of things that could be leveraged and not be a sign of trouble.
If you're buying groceries with debt, that's an issue as those are used in the here and now. If you're buying something that's a durable good there's no real issue with going into debt for it.
The boot example. You can cash flow boots that cost $10 and last a year, or you can borrow to buy boots that cost $50 and last a decade. Unless there is some usury level interest going on the leveraged boots are a better idea.
Few people can pay cash for homes or college. Neither my wife or I have a penny of undergrad debt, but given what our degrees are worth it would have been perfectly acceptable to have gone into debt to get them.
Cars. Well you certainly drive a beater until you've saved enough to buy something nice, or you can get 0% APR and have the latest and greatest in safety features right now and drive a much safer car for the next 60 months.
I'm not convinced that cars from 10 years ago are that much less safe than today's. But also, the number of electronic gadgets has gone up considerably - and more gadgets means more failure points. Especially when something as simple as using the brake requires electronics.
Quote:
Originally Posted by MDrenter223
And man if we used Daves anti debt for school stance we'd have very few Dr's, lawyers, pharmD's, Dentists, Vets or most any other non funded PhD professional.
Or there would be programs to allow a person to work their way up...
I'm an adult in my mid-20s and am just about fully independent and comfortably set in a career. Perfect time to learn about Dave Ramsey's show/podcasts, as I learned about a few months ago. My perspective on personal finance has changed so much, it's great!
Now, I absolutely give zero cares about what I drive, how nice of an apartment I have (or whether I choose to live with my parents as opposed to renting an apartment), vacations or anything like that. I get on Facebook and I laugh at how broke all my friends are. Funny thing is, they don't realize they're broke. I saw a newlywed couple on Facebook today post a status about how thankful they were to God for helping them get approved for a home loan. Yea, that's sure something to brag about -- having to borrow money because you don't have enough of it!
Mommy & daddy are probably bailing them out if they are in their 20's and complaining how 'broke' they are... I notice many of these 'broke' 20 somethings have $100 + a month gym memberships, drive new Priuses (with the Thule racks on top), 'summer' on the Cape and eat out every night (no one cooks dinner they 'eat at some trendy yuppie sterile afterwork place')
I don't like his "my way or the highway" approach. A one size fits all for personal finance.
He tends to think everyone should aspire to being an entrepreneur. Has a dislike of government employment. Told one military guy 5 years shy of a pension, to get out now, because he could make more money in private employment, and the military pension wasn't trustworthy.
Anyone calling up making less than $50k a year, is told to get their income up and eat beans and rice in the meantime.
I tuned in one day in the middle of a ranting monologue of his. He was talking about the government seizing his assets, and how it wasn't right. I thought he'd been sued by the feds or something. Turned out he was talking about the routine of paying taxes, and how wrong it was.
Bible thumper supreme.
He lacks knowledge is a lot of areas of finance, but speaks in absolute terms.
He's entertaining more than annoying. A lesser of evils among radio talk shows.
SO what is wrong with stating the so UN PC truth. If the MSM ever said that, they would be accused of being elitist or racist. CNN blames those 'evil' CEO's as the reason people make so little.
I'm not convinced that cars from 10 years ago are that much less safe than today's. But also, the number of electronic gadgets has gone up considerably - and more gadgets means more failure points. Especially when something as simple as using the brake requires electronics.
Although I wouldn't run out and buy a car simply for an updated set of safety systems, I thought the same thing until I bought a new vehicle last August. It's the same make and class (different model) as our older car, but the safety systems and driver's aids are much more extensive. They make a real difference in all types of driving conditions.
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