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Bernie Madoff, Ponzi Scam, comes to mind. Didn't people with wealth invest with him ?
Regarding Ramsey, investment advise, I recall him saying, you need someone to teach you. For me, it's knowing where the funds are being invested, how long; learned a long time ago, one doesn't need A Lot of money to invest, just start, add each month/regular basis. Keep in touch when goals, life change.
The stock market crashed in 1929, stocks, bonds go up, down. Nervous ? Don't invest, put in a a credit union rather than a bank.
Dave Ramseys advice is fine. The problem most people have with his advice is they believe it's for everyone. A common thread is people bristle at the fact that he says you should have NO credit cards, no car loans, etc. Those of us who have a bit of financial responsibility think he's talking to us when he's actually talking to the true monetary morons. Do you think an AA counselor would tell you it's ok to drink a little, maybe on weekends? How many times do you hear a Dave Ramsey caller say they are $300,000 in debt but that 0% credit card is just too good a deal to pass up? "I owe $55,000 on my car and $37,000 on my wife's car, but, if we buy a boat we could then have less expensive weekend activities to pay for." He's talking to these people.
The problem isn't that Dave's advice is necessarily bad, in certain contexts and among certain people. His main problem is that he's extremely dogmatic.
I had a CC debt problem years ago. My issue was that I was raised middle class, but ended up graduating college at a low income. I made ~$16/hr in 2010, my first year out of college, driving 100 mi. roundtrip every day for that. Gas was ~$3.50 back then. A pretty significant chunk of my net pay went to gas.
We always went out to eat, etc., growing up. Little by little, that debt grew, trying to maintain the lifestyle I always had growing up without the income to support it.
I had three jobs in 2013, each paid less than the previous one, bottoming out at under ~$10/hr. on a 40 hour week equivalency.
It took until 2014 to find my first "career-track" job when I was 28. I made about $55k then, but I was playing catch-up from years of low spending. There were multiple moves between 2010 - 2016 - TN>IA, IA>TN, TN>IN, IN>TN. That was to get myself to $55k.
By the time I made a "living wage," there were many years of expenses piled up on the cards. By 2016, I was basically tapped out. I ended up finding a job in my hometown, moved back in with my parents for almost two years at age 30, paid off all the unsecured debt, and moved on with my life.
Here's what's wild. It's 2022 now. In 2012, I was making $21/hr. with shift differential, paying ~$800/month in rent in IA. IA has high state income taxes. Today, my mortgage payment is $675/month, no state income taxes, and I make well over twice what I did then.
I started listening to Dave back then. There was some useful advice there, but the root cause of my issues was that I wasn't making anything. $17/hr. doesn't go far with a 500 mile roundtrip commute. I wasn't from a big city, so it was hard to get considered for better paying, out of area jobs. There was a lot more grey in my situation than Dave would ever acknowledge.
Sure, there was some "getting stupid" with the cards back then, but it was largely to maintain the lifestyle I was accustomed to. I wasn't buying big screen TVs or taking killer vacations - it was basically restaurants, basic bills I couldn't afford out of cashflow, and moving expenses.
Lots of young people get in trouble with CC debt in their 20s. It's extremely common. Maintaining a "lifestyle" whether you are accustomed to it or not, is not an excuse for getting over your head in debt. You just fell into the same trap as so many other young people living beyond their means.
Dave Ramsey is for those who are extremely lacking in financial knowledge, have poor math skills, and a low level of common sense. The average person can look at their own monthly income vs. outflow and see that outflow exceeding income cannot be sustained. People with good math skills understand that paying minimum payments on credit accounts with high interest rates doesn't actually lower the principal owing, and isn't going to work to reduce debt. People with common sense understand that eventually the bills come due, and the chickens come home to roost.
DR's religious self-righteousness is a big turn-off to me. He cloaks his money-making help "ministry" as if it's a church, but it's a business, and it's one that preys on those already in financial trouble. Sort of smacks of predatory lenders who say they can help people get out of debt, and end up with them being the creditor, and getting the interest, instead of the CC companies. Sure Dave's advice can help them, but he's going to make sure he gets some of their money first, and his radio show is just one big long commercial for his classes and books. Most companies pay for advertising, but I'm pretty sure DR gets PAID to promote his own products on air.
I had a CC debt problem years ago. My issue was that I was raised middle class, but ended up graduating college at a low income. I made ~$16/hr in 2010, my first year out of college, driving 100 mi. roundtrip every day for that. Gas was ~$3.50 back then. A pretty significant chunk of my net pay went to gas.
We always went out to eat, etc., growing up. Little by little, that debt grew, trying to maintain the lifestyle I always had growing up without the income to support it.
I had three jobs in 2013, each paid less than the previous one, bottoming out at under ~$10/hr. on a 40 hour week equivalency.
It took until 2014 to find my first "career-track" job when I was 28. I made about $55k then, but I was playing catch-up from years of low spending. There were multiple moves between 2010 - 2016 - TN>IA, IA>TN, TN>IN, IN>TN. That was to get myself to $55k.
By the time I made a "living wage," there were many years of expenses piled up on the cards. By 2016, I was basically tapped out. I ended up finding a job in my hometown, moved back in with my parents for almost two years at age 30, paid off all the unsecured debt, and moved on with my life.
Here's what's wild. It's 2022 now. In 2012, I was making $21/hr. with shift differential, paying ~$800/month in rent in IA. IA has high state income taxes. Today, my mortgage payment is $675/month, no state income taxes, and I make well over twice what I did then.
Just saw in another thread that it appears you very recently left your high-paying hospital system IT job (you had been working at home) - did I read that correctly? If so, that's somewhat of a surprise!
The same folks who listen to "those people" probably read Money magazine too- the magazine for the financial illiterates (!)
#1 Rule of Life: LIVE BELOW YOUR MEANS
So if you agree that there are a lot of financial illiterates in this country, then why would anyone object to someone who comes on and tries to help those people become literate? If that is really the case, then shouldn’t his brand of advice be welcomed by everyone? Doesn’t it benefit society as a whole if more people are financially literate?
Lots of young people get in trouble with CC debt in their 20s. It's extremely common. Maintaining a "lifestyle" whether you are accustomed to it or not, is not an excuse for getting over your head in debt. You just fell into the same trap as so many other young people living beyond their means.
Dave Ramsey is for those who are extremely lacking in financial knowledge, have poor math skills, and a low level of common sense. The average person can look at their own monthly income vs. outflow and see that outflow exceeding income cannot be sustained. People with good math skills understand that paying minimum payments on credit accounts with high interest rates doesn't actually lower the principal owing, and isn't going to work to reduce debt. People with common sense understand that eventually the bills come due, and the chickens come home to roost.
DR's religious self-righteousness is a big turn-off to me. He cloaks his money-making help "ministry" as if it's a church, but it's a business, and it's one that preys on those already in financial trouble. Sort of smacks of predatory lenders who say they can help people get out of debt, and end up with them being the creditor, and getting the interest, instead of the CC companies. Sure Dave's advice can help them, but he's going to make sure he gets some of their money first, and his radio show is just one big long commercial for his classes and books. Most companies pay for advertising, but I'm pretty sure DR gets PAID to promote his own products on air.
The issue isn't the lifestyle. It's not like I was getting excessive. The issue is low pay.
When you're making $17/hr., and driving 500 mi. week at $3.50 gallon, a considerable portion of my paycheck was literally going down my gas tank.
No one is doing well on $17/hr. You can't cut your way out of that like Dave says. For some people, earning more is realistic. For people in certain jobs or at the end of their careers, it may not be.
Had I started out at $21/hr in TN with no income tax and a much more reasonable commute, I'd have been much better off.
Quote:
Originally Posted by matisse12
Just saw in another thread that it appears you very recently left your high-paying hospital system IT job (you had been working at home) - did I read that correctly? If so, that's somewhat of a surprise!
I was offered a position for about $120k in downtown Greenville, SC, but it was a five day a week, in the office position. By the time I backed out income taxes and the difference between rent and my mortgage (not to mention I would be renting again), that $20k was mostly gone. That's not including smaller things like increased gas costs. I'd need to buy new clothes too.
It just wasn't worth it at this point. The extra money is not that meaningful to me now.
So if you agree that there are a lot of financial illiterates in this country, then why would anyone object to someone who comes on and tries to help those people become literate? If that is really the case, then shouldn’t his brand of advice be welcomed by everyone? Doesn’t it benefit society as a whole if more people are financially literate?
I will never be able to get passed the fact that he is a lousy person.
The whole "old, cheap car" thing is way more complicated than Dave Ramsey makes it out to be. In the Northeast and Midwest old cars are going to be rusty junk and it won't work there. But you have to be a real car guy to make older cars actually cheap to run. You have to know which specific makes and models are good, and you have to be able to inspect the individual car you are offered to determine what its needs are, and almost all older cars for sale will have some needs. Just planning to "get an older Toyota" is too simplistic - you can find older Toys that are in fact fright pigs.
But my main drivers are a 95 Cougar XR-7 with that nearly everlasting 4.6 engine, and an 82 Scirocco. Both were bought cheap, both have had needs that I mostly took care of, and the Scirocco in particular is great with $5 gas.
The whole "old, cheap car" thing is way more complicated than Dave Ramsey makes it out to be. In the Northeast and Midwest old cars are going to be rusty junk and it won't work there. But you have to be a real car guy to make older cars actually cheap to run. You have to know which specific makes and models are good, and you have to be able to inspect the individual car you are offered to determine what its needs are, and almost all older cars for sale will have some needs. Just planning to "get an older Toyota" is too simplistic - you can find older Toys that are in fact fright pigs.
But my main drivers are a 95 Cougar XR-7 with that nearly everlasting 4.6 engine, and an 82 Scirocco. Both were bought cheap, both have had needs that I mostly took care of, and the Scirocco in particular is great with $5 gas.
This, and the use of actively managed mutual funds instead of S&P 500 or Total Stock Market Index funds are the only 2 items where I disagree with Dave Ramsey concerning his financial advice.
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