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Ramsey does not make me mad. I used to listen, but have mostly given up all talk radio, even sports. Th thing about Ramsey is his advice is good, but sometimes not doable for folks. He says to pay cash for a car, which I have done twice. I was doing good on money the first time and it made perfect sense to pay cash for a car I could afford. 300,000 miles later, I bought a new car, but my situation was different at that point after going to school and then starting a family.
The next time I paid cash for a car was after my medical disaster of 2015/16/17. Money was tight. I wrecked a car I almost had paid off and used the insurance money to buy an old truck as it seemed like a great idea at the time not to have car payments. I knew the truck would need some work and changed out basically everything in the engine until right when I thought I'd be good for a year or so, the engine itself konked out on me.
Paying cash works great for those folks with cash. For the rest of us, we're trapped in a vicious cycle where it is hard (not impossible, but hard) to right the ship. Of course, some folks want to say there are two kinds of folks in the world. Those who take Ramsey's advice on paying cash for everything and then the others who (these folks think) want everything handed to them. Certainly those people exist, but most people are out here trying to survive from week to week on their own.
This. I rather pay cash for stuff but it just isn't possible on today's wages and at today's costs. Not enough good paying jobs are indeed left. However those of us saying that are called complainers or making excuses when we state reality.
Every day people who worked hard and saved money. They're not losers with loser mentalities. They don't think that society owes them anything. Pocahantas and AOC, take note.
Mad? Nah. Even as a liberal godless heathen, I think it’s a good resource with simple principles for people who desire to live debt free, and/or need to dig themselves out of a debt sinkhole. I found that some of his advice is myopic and ignores oppounity costs, but it fits with his belief in avoiding all debt at all costs. Personally, I was always debt-free until I bought a house, but I think it’s wiser to learn how manage and leverage debt, rather than simply avoid it completely. But for some that is not possible.
Mad? Nah. Even as a liberal godless heathen, I think it’s a good resource with simple principles for people who desire to live debt free, and/or need to dig themselves out of a debt sinkhole. I found that some of his advice is myopic and ignores oppounity costs, but it fits with his belief in avoiding all debt at all costs. Personally, I was always debt-free until I bought a house, but I think it’s wiser to learn how manage and leverage debt, rather than simply avoid it completely. But for some that is not possible.
Exactly. When one's investments are yielding a greater return than the interest cost of their debt, one does not sell the investments to pay off the debt. Most won't be in that position, and few understand the concept.
Mad? Nah. Even as a liberal godless heathen, I think it’s a good resource with simple principles for people who desire to live debt free, and/or need to dig themselves out of a debt sinkhole. I found that some of his advice is myopic and ignores oppounity costs, but it fits with his belief in avoiding all debt at all costs. Personally, I was always debt-free until I bought a house, but I think it’s wiser to learn how manage and leverage debt, rather than simply avoid it completely. But for some that is not possible.
I too feel this way. There are too many variables of it. He wants you to not buy say a new car and think it is much better to hold on to a car, even if it is old and run down. As cars get older it actually will have more costs. You'll typically pay higher prices for replacement parts. You'll typically have a lot of fixes that you typically go through. I have a 2009 Chevy HHR I got in 2017, for almost all 2018 I ran it with a bad control arm and had a serpentine belt wearout, two tires wear due to the control arm and quite a bit of engine and evap issues and a door issue or two. These were pretty costly fixes actually. I think I had about $3,100 in these wear and tear issues alone. Next year I'll probably need to swap out the breaks too.
And this is just a 2009 with under 100,000 miles that I put on nearly 30k in two years. My brother's 02 Malibu is in about the same shape and much higher in mileage. Him and his wife drive her much newer car everywhere and he only drives his when she isn't around due to the mileage. He hasn't owed on it in like 10 years, but the repair bills are piling up. Ramsey would love that until the day he runs it into the ground and needs to get a replacement that he paid more than he should have on due to depreciation (and I'm not talking the car value but the parts.)
The car value reminds me of another thing I disagree with the Ramsey community, the roll off the lot value drop. A pot of people look at cars the wrong way on this forum. Instead of looking at it as transportation from point A to B to C and maybe D, they look at it like an investment. You get it at year 1 at X and at year 8 I can trade it in at Y but when Y is Z and Z is valued less than Y, they get all butt hurt due to the endowment effect. When I will sell my HHR which I would likely do if I have the money to in four/five years after paying it off, I hope that I get book value for it and enough to cover a down payment or at least have a reasonable cash down. Sadly too many get butt hurt when you tell them they overvalued their car. I once saw a man trying to sell a Ford 2005 sedan with paint peeling off in a very good condition Blue Book Price when me, I would pay moderate at best l for that.
I too feel this way. There are too many variables of it. He wants you to not buy say a new car and think it is much better to hold on to a car, even if it is old and run down. As cars get older it actually will have more costs. You'll typically pay higher prices for replacement parts. You'll typically have a lot of fixes that you typically go through. I have a 2009 Chevy HHR I got in 2017, for almost all 2018 I ran it with a bad control arm and had a serpentine belt wearout, two tires wear due to the control arm and quite a bit of engine and evap issues and a door issue or two. These were pretty costly fixes actually. I think I had about $3,100 in these wear and tear issues alone. Next year I'll probably need to swap out the breaks too.
And this is just a 2009 with under 100,000 miles that I put on nearly 30k in two years. My brother's 02 Malibu is in about the same shape and much higher in mileage. Him and his wife drive her much newer car everywhere and he only drives his when she isn't around due to the mileage. He hasn't owed on it in like 10 years, but the repair bills are piling up. Ramsey would love that until the day he runs it into the ground and needs to get a replacement that he paid more than he should have on due to depreciation (and I'm not talking the car value but the parts.)
The car value reminds me of another thing I disagree with the Ramsey community, the roll off the lot value drop. A pot of people look at cars the wrong way on this forum. Instead of looking at it as transportation from point A to B to C and maybe D, they look at it like an investment. You get it at year 1 at X and at year 8 I can trade it in at Y but when Y is Z and Z is valued less than Y, they get all butt hurt due to the endowment effect. When I will sell my HHR which I would likely do if I have the money to in four/five years after paying it off, I hope that I get book value for it and enough to cover a down payment or at least have a reasonable cash down. Sadly too many get butt hurt when you tell them they overvalued their car. I once saw a man trying to sell a Ford 2005 sedan with paint peeling off in a very good condition Blue Book Price when me, I would pay moderate at best l for that.
Yes, where he and I part company is with his very black-and-white mortgage advice. Not because it’s inherently bad, but because one Business Math course is enough to see that he is only looking at the time value of money through a very narrow lense. Yes, a 20% down 15-year mortgage is an ideal goal, he doesn’t seem to take into consideration rising real estate values, rising interest rates, or the money being spent on rent in the meantime. Had we not been so committed to that ideal, we would have bought a home four years sooner... paid a good $75k less, gotten a lower interest rate, paid a lot less to close, and saved a good $60k on rent paid while we were saving.
Don’t get me wrong, I’m not advocating people buy before they can afford it or put the bare minimum down, but in a healthy real estate market time is money.
Last edited by Ginge McFantaPants; 03-17-2019 at 08:32 AM..
When people write such nonsense, it’s very clear to me that they know not the first thing about the tax plan Ocasio-Cortez has proposed. Her plan introduces a marginal tax rate on adjusted annual income above $10 million dollars.
If you don’t understand the meaning of marginal tax rate and adjusted annual income, please look the terms up because they seem to be points of ignorance for many Americans. Her proposal would not affect millionaires; it would affect a tiny number of billionaires, some of whom have even come out in favor of increasing their taxes because they know that they underpay. Furthermore, a top marginal tax rate of 70% is not even unprecedented. At one time, the United States’ top marginal tax rate was above 80%.
Your post is why I advocate for all high schoolers to complete a course in economics or personal finance before graduating. There is really no excuse for you not to know to know something so basic about the U.S. tax system. If you’re going to pontificate about the supposed evils of Representative Ocasio-Cortez, at least take the time to understand what she is proposing.
When retarded people like you jumps the gun and attack my post which was just a question, then you have gone beyond stupid. I never mentioned her name, someone did and you assumed I was talking about her plan.
First of all, do I really need to understand her tax plan when the loudest call I hear from her is she wants "FREE EVERYTHING" for everyone . Once I hear that BS coming from a politicians mouth then I don't give a crap about their tax plan. She is retarded as well, look at the Amazon debacle, the middle and lower class lost the most.
Course in economics for me? I retired at 37 and I'm just enjoying life, you?
Exactly. When one's investments are yielding a greater return than the interest cost of their debt, one does not sell the investments to pay off the debt. Most won't be in that position, and few understand the concept.
Dave never said using debt for investment is wrong. He is saying is you must be able to pay the debt if something goes wrong with the investment without wiping your entire savings out. Most people who call his show have large debt to asset ratio's with just enough income coming in to pay the interest want advice about investing money when they should be paying off their debt.
If your taking on more debt then your total assets betting an investment will return big it's nothing more then gambling eventually you will lose.
Dave never said using debt for investment is wrong. He is saying is you must be able to pay the debt if something goes wrong with the investment without wiping your entire savings out. Most people who call his show have large debt to asset ratio's with just enough income coming in to pay the interest want advice about investing money when they should be paying off their debt.
If your taking on more debt then your total assets betting an investment will return big it's nothing more then gambling eventually you will lose.
That's why I said most won't be in the position to be able to hold a nominal amount of low interest rate debt while the ROI on their investments yields a greater return.
It's really stupid for anyone to have a high debt to asset ratio. Just a single setback can wipe them out.
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