Dave Ramsey books
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SemperAnticus1643
Posts: 703 Member
I am taking a personal finance course for class credits to obtain my 150 hours to sit for the CPA exam. My professor HIGHLY praises Dave Ramsey and his books. In Ramsey's own book, he says "never take advice from poor people". Comical but ok. After doing a little research on Ramsey, I discovered that he had actually filed for bankruptcy at one point. He tells people to sell their items, cut out unnecessary expenses, kinda go to some extremes to get out of debt BUT he himself did not do these things and filed for bankruptcy. Has anyone read his books and how did you feel about his financial planning?
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I have read his books and followed his methods.
Firstly, you are bordering on ad hominem.
Secondly, if you read his books, you will get your answer. During his early career, he was into real estate and leveraged money with the best of them. When his banks were bought out, his loans were called, leaving him millions in debt. Yes, he had to claim bankruptcy and start out again with nothing. Except that time, he did so conservatively.
The reason he advocates avoiding bankruptcy at all costs are because he has firsthand experience with the stress and heartache it can cause to you and your family. He also believes in paying off your debts. I believe that he actually paid off his creditors AFTER the bankruptcy.
As for his plan, it it fairly logical and well founded. They are called the Baby Steps. You start by created and maintaining a monthly budget and getting current on all bills.
1. After becoming current on all of your bills, save up a $1,000 BEF (Baby emergency fund). This is meant to handle most small emergencies you encounter until step 3.
2. Apply all extra income towards your debt (minus the mortgage) in order of smallest debt to largest. It is done this way to give psychological victories.
3. Save 3-6 months of expenses for. FFEF. (Fully funded emergency fund)
4. Begin saving 15% of income towards retirement, not including your employer match in your 401k.
5. Start a savings fund like an ESA or 529 plan for your childrens college.
6. Put all extra income towards your mortgage.
7. You are now debt free and able to invest or give as you wish.0 -
There are three categories that arguments tend to fall in to, logos, pathos, and ethos.
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Logos
A logos argument will be based upon logic. For example:
"You should by this car because it has the best gas mileage and if falls within your price range."
Pathos
A pathos argument is based upon emotion.
"This car has the most horse power and if you buy it women will want to have sex with you."
Ethos
An ethos argument is based upon the arguers investment in his own position.
"I think this is the best car on the lot and that is why I picked it for myself."
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In my opinion the best arguments are based upon logic. The weakness of using a logical argument is that they are not exciting to a large crowd. People are not impressed by facts they want to be entertained.
In my opinion the arguments that impress me the least are pathos arguments. It becomes obvious to me quickly that the arguer is try to pull at heart strings or get me angry or something like that. I find that pathetic. Sadly these arguments are extremely effective.
People will throw money at a problem if it will make their guilt go away. Think of those poor puppy dogs with Sarah Mclachlan playing in the background. There is a reason they advertise that way. They are asking you to spend your hard earned money on something that will not change your personal life at all. Emotional arguments are needed for something like that.
You are taking issue with Dave Ramsey's ethos. Humorously Dave Ramsey is attacking the ethos of poor people when he says not to take their advice. If Dave Ramsey is in fact now poor then he has ironically told the world not to take his own advice.
The question we must now answer is was Dave Ramsey correct when he said not to take the advice of poor people? On the surface it sounds like great advice. I don't want to be poor so I don't want to follow their advice right?
Well talking like that might help you sell books but it won't help you when it comes to problem solving and searching for truth. A person who gives great financial advice can become poor for reasons beyond their control. Does the advice they gave suddenly become bad advice now that they are poor? No it does not.
Arguments have to live and die based on their own strength regardless of person that is making the argument. A wealthy person could give you bad financial advice because they had everything given to them for example Paris Hilton might not be a good person to go to for financial advice.
It is better to instead look at the evidence in front of you and evaluate the information presented based on logic.
I have not read his books but I am doing pretty well financially. I have been told by people that do follow his teachings that I happen to do a few things the way he says to do them anyways. If that is true then I can reasonably conclude that he must have a few things right.
If he had things right before he went bankrupt they don't become wrong simply because he did. I would investigate why he went bankrupt and how he has handled it. Either way it will all boil down to whether or not his points can stand up to scrutiny.
You could learn that he never brushes his teeth or changes his underwear and it wouldn't change the content of his arguments at all.0 -
Maybe he learned his lesson and stayed debt free after his bankruptcy. I am pretty sure it's easier to stay debt free than it is to climb out of the hole.0
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Maybe he learned his lesson and stayed debt free after his bankruptcy. I am pretty sure it's easier to stay debt free than it is to climb out of the hole.
He did. He now has the third most listened to radio show in America, owns millions in real estate, has a financial counseling business, and has ZERO debt. His financial health is ironclad.0 -
And he says not to take financial advice from poor people because most people do not know how to handle money. His logic is if you want to be rich, learn how a rich person did it.
Really, read his books. He explains everything you are asking.0 -
Fist off -- I don't know anything about Dave Ramsey's personal finances, but I did take his course several years ago. My company offered it and paid for it. My wife and I took it together.
It's a logical approach to getting out of debt, but it is not an original concept. May parents and their parents all lived by the same concept. If you want something, save for it. Don't buy on credit. We can't seem to do that anymore. Everyone wants everything NOW, and there are so many Lending Institutions that want to give you the credit to obtain everything you want.
That's why America is in the state it is in now. Credit.
My wife and I both followed the Ramsey approach. Pay off the little debts, and once they are paid off, use that money to pay of the next debt and so on and so on.
We're not debt free, by any means. We still have a mortgage, but we no longer take the easy way (Credit) to obtain what we want. We are in the best financial health we have ever and our resolve continues to grow with each step.
It's a good class. I recommend it.0 -
I am taking a personal finance course for class credits to obtain my 150 hours to sit for the CPA exam. My professor HIGHLY praises Dave Ramsey and his books. In Ramsey's own book, he says "never take advice from poor people". Comical but ok. After doing a little research on Ramsey, I discovered that he had actually filed for bankruptcy at one point. He tells people to sell their items, cut out unnecessary expenses, kinda go to some extremes to get out of debt BUT he himself did not do these things and filed for bankruptcy. Has anyone read his books and how did you feel about his financial planning?
You have extremely limited knowledge of Dave Ramsey's experiences. His advice is common sense and spot-on, actually. It's much akin to losing weight, but it's about losing debt.0 -
Fist off -- I don't know anything about Dave Ramsey's personal finances, but I did take his course several years ago. My company offered it and paid for it. My wife and I took it together.
It's a logical approach to getting out of debt, but it is not an original concept. May parents and their parents all lived by the same concept. If you want something, save for it. Don't buy on credit. We can't seem to do that anymore. Everyone wants everything NOW, and there are so many Lending Institutions that want to give you the credit to obtain everything you want.
That's why America is in the state it is in now. Credit.
My wife and I both followed the Ramsey approach. Pay off the little debts, and once they are paid off, use that money to pay of the next debt and so on and so on.
We're not debt free, by any means. We still have a mortgage, but we no longer take the easy way (Credit) to obtain what we want. We are in the best financial health we have ever and our resolve continues to grow with each step.
It's a good class. I recommend it.
His course is called Financial Peace University.0 -
I have read his books and I listen to his podcasts.
I am debt free other than my mortgage. I don't buy anything that I can't pay cash for.
I would recommend his class FPU. Althought I have not had the opportunity to take it
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Have you listened to his show?
It's not like he never recommends bankruptcy... and by the way... have you looked at his net worth LATELY??0 -
These days commons sense has become rare sense. A lot of the methods put forward by people like Ramsey and Kiosaki sounds obvious but the average consumer is oblivious to this. Most would just charge up debt thinking they can pay it off over time. But the debt adds up to the point where they "claim" they can't make a living. The problem is the lack of proper financial education people get these days which is what Ramsey is trying to pass on.
This is part of the problem why people expect such large paychecks for menial work failing to realize they caused their own financial distress.0 -
His radio show is entertaining. I read one of his books. Everything he says is pretty much common sense. If you follow his program you will get out of debt.0
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Wow! This is eerie. As I have said before I have not read any of his books or taken his class but I have pretty much done all of this with just a few exceptions. For example i did not set up an emergency fund until after step 2 was already complete. As it has already been pointed out this is nothing new. This used to be the conventional wisdom of the day.I have read his books and followed his methods.
Firstly, you are bordering on ad hominem.
Secondly, if you read his books, you will get your answer. During his early career, he was into real estate and leveraged money with the best of them. When his banks were bought out, his loans were called, leaving him millions in debt. Yes, he had to claim bankruptcy and start out again with nothing. Except that time, he did so conservatively.
The reason he advocates avoiding bankruptcy at all costs are because he has firsthand experience with the stress and heartache it can cause to you and your family. He also believes in paying off your debts. I believe that he actually paid off his creditors AFTER the bankruptcy.
As for his plan, it it fairly logical and well founded. They are called the Baby Steps. You start by created and maintaining a monthly budget and getting current on all bills.
1. After becoming current on all of your bills, save up a $1,000 BEF (Baby emergency fund). This is meant to handle most small emergencies you encounter until step 3.
2. Apply all extra income towards your debt (minus the mortgage) in order of smallest debt to largest. It is done this way to give psychological victories.
3. Save 3-6 months of expenses for. FFEF. (Fully funded emergency fund)
4. Begin saving 15% of income towards retirement, not including your employer match in your 401k.
5. Start a savings fund like an ESA or 529 plan for your childrens college.
6. Put all extra income towards your mortgage.
7. You are now debt free and able to invest or give as you wish.
I have three large screen TV's in my house and an Xbox and a Wii and an Apple TV and a DvD player and I have never put any of them on credit. I have a big grill in my back yard and I have two cars(one of the cars is paid for). I still have a mortgage and I do have student loans and a bit of medical debt but I am getting ahead at a pretty fast pace. I did it because I saved up and paid in full for the grill and all my TVs and gaming systems. Just don't put stuff on credit.
I am dismayed that there are so many people are getting payday loans that there is an entire industry around them. People have to learn the difference between a need and a want. It would make me so happy to see all payday loan establishments go out of business.0 -
Payday loans are so beyond ridiculous. Something like 800% APR. Notice they are usually in poorer neighborhoods. There is a cycle of debt and bad choices that leaves most people in poverty, even many middle class families.0
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So do these *kitten* just look up what interest rate would make them loan sharks and charge a little bit below that? I see buildings like that as debt generating engines. They take people that are in bad situations and bury them further. How does anyone ever come to the conclusion that a PayDay loan would be their best option?0
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So do these *kitten* just look up what interest rate would make them loan sharks and charge a little bit below that? I see buildings like that as debt generating engines. They take people that are in bad situations and bury them further. How does anyone ever come to the conclusion that a PayDay loan would be their best option?
Pay day loans are for those that normally live paycheck to paycheck and something happens, whether necessary or not, where they need extra money.0 -
And by the way, other than my student loan debt...my husband and I are debt free. Our cars are paid off. We do not own a home yet. But I am sure we will have a problem when it comes to financing because we have no credit history other than my student loans of course.
We too have laptops, flat screen tvs, and a house full of furniture all of which we have happily paid cash for. Didn't get stuff until we had the money for it.0 -
Payday loans are so beyond ridiculous. Something like 800% APR. Notice they are usually in poorer neighborhoods. There is a cycle of debt and bad choices that leaves most people in poverty, even many middle class families.
Poorer neighborhoods and near military bases, which makes me ill.0 -
Payday loans are so beyond ridiculous. Something like 800% APR. Notice they are usually in poorer neighborhoods. There is a cycle of debt and bad choices that leaves most people in poverty, even many middle class families.
Poorer neighborhoods and near military bases, which makes me ill.
Predatory lending; these institutions are counting on debtors not understanding the loan terms and then take advantage of them. Often they end up packaging all the of loans together and then selling them to a collection agency. This way, they still make a profit and it's now the collection agenycy's problem of getting their money back.0 -
So do these *kitten* just look up what interest rate would make them loan sharks and charge a little bit below that? I see buildings like that as debt generating engines. They take people that are in bad situations and bury them further. How does anyone ever come to the conclusion that a PayDay loan would be their best option?
When your entire paycheck goes to bills and you have to feed a child for 2 weeks until your next payday.
I will NEVER do one again, but thankfully, have another adult in the picture now. I did give stuck in the vicious cycle as a single mom. It was literally my only option to feeding my son and myself for two weeks and having gas money to get to work. Borrowed a bit and with the huge interest, when I paid it the next payday, I had to reloan to get through and that continued for awhile.. When you live paycheck to paycheck, there is no wiggle room.. . I had to wait for a big check (I think it was my end of year unused PTO payout) to get out of the cycle. Have not gotten once since.0
