Anyone listen to or read Dave Ramsey, the no debt guy?
 

He has a talk show and has written books that help people get out of debt. I've been listening to him for about a month now. People call in and explain thier credit/debt problems. Here are a couple of my observations:

1. My God, are there people out there in trouble! +$50K in credit car debt, no job, hurt my back, upside down on the cars and the house, etc, etc, etc. Sometimes its good to hear others with worse problems than yours.

2. My God, there are people that have worked thier butts off and are now debt free. Makes you sad to hear them.

Anyone used his advice or feel his advice is the right thing to do?

A few of his power points are: only buy term life insurance, never lease a car, payoff the smallest debt first and roll that payment when paid off into the next largest debt (called "debt snowballing"), sell the house and rent if you can't afford a house, and tell Bubba to sell the 4x4 and buy a used car.

My mother listens to him. I've picked up a few things here and there...

Listening to him has ultimately convinced me that I can't afford the 951 anymore. I was doing fine until I bought a new truck (when my old one died while on vacation). Now I have all of the repairs sitting on my credit card and I don't like that. I need to eliminate credit card debt and pare down my expenses.

I'm most fond of how he tells people to take 4 jobs to pay off debt without bankruptcy when he himself filed his way out of trouble.

I have not heard of this guy in particular but these are basically good points. The only thing I would question is "pay off the smallest debt first". I would say "pay off the largest interest debt first". These SHOULD be the same thing but not always.

I have just over $9k debt from getting married. This is all on a 0% card. I focused on paying off my wife's $10k auto loan @ 4% first. I don't save any money paying off the 0% card quicker.

Rent vs. Buy is area dependent. Here rent is the same as a mortgage so why should I rent vs potentially build equity. The key is not to buy a bigger house than your wallet can support.

I am not selling my 4x4. It only cost me $2k + $1k for the lift, tires, ect. :D

I'd like to know what you find sad about #2. Cindy & I worked hard to become debt free & build our modest portfolio. Today? We're living life as we choose, considering the health factors that we cannot control.

Make me feel sad because we're still in debt.

Ramesy's "power points". as you describe them, make sense to me. Get after 'em?

Cindy & I have an opposing problem now...a reluctance to spend $ on things we really don't need.
After years of doing without luxury items in order to get out of debt and become financially secure, it's become a habit. One minor example: Sure I could afford the gold rolex daytona...do I need or even want one? Naw.... But I did recently spluge on a top of the line custom cue and a custom leather case for my "sticks"...yeah, $3K worth of equipment, and I'm still just a casual banger...the lowest of the low, skill wise.

NEVER go into debt to buy a toy...the cue maker wanted me to use my VISA card, so I did so...but the bill was paid in full the day it arrived. I've never paid a dime of credit card interest in my life. If you can't treat credit cards as if they were cash spending, cut them up....

It's all about developing a mindset if being debt free is your goal.

He tells people to rent to avoid the repair costs of home ownership. This is not a long term solution but just to get you out of a house you can't afford.

We are not in debt trouble, but do have debt that I wish we didn't have.

Never heard of him, but I agree with all of those things. Only have term, never leased a car (or had payments on a car), no debt at all (including on house), etc.

I don't know how people sleep at night having a bunch of debt. Esp. when that debt was incurred to buy mostly just a bunch of useless crap, which was expensive to buy but now is worth pretty much nothing.

Don't know him at all or his experience, but maybe he's just speaking from experience.

Most people who file for bky don't really understand it, and for most, it doesn't work out how they thought. If they knew before filing what they know afterwards, most wouldn't file. For a good example, see the "Paul Weir" thread on the 911 tech forum.

So if this guy did file bky, he may be saying "Hey, I did it, but if I were to do it again, I would take 4 jobs to pay off debt without filing."

I used to listen often. Sad, but it does make you feel better about your situation hearing how much worse off other people are.

His advice is very sound, but can sometimes be a bit cookie-cutter. Overall, he provides a good blueprint for getting out of debt and taking control of your money. Let's face it, it's something many people need to hear.

His "pay off the smallest debt first" is more psychological than anything, you get the feeling of accomplishment of paying off a debt quicker, and are less likely to get frustrated and give up. He usually called it "getting traction", or something similar. Plus, the bigger the debt, the greater chance that the debt holder will be willing to settle for a lesser amount, or wait for payment.

I've heard him a few times. Preaches live within your means, act like an adult and only buy toys you can afford, and pay down your debt. It's un-American!

I think some people are just wired for debt, and others aren't.

I never understood the concept, at all. I guess I can see taking on debt if the purpose of it is to try to make money, i.e., a business loan to get a business going.

But I never understood the concept of going into debt to buy consumer junk. Maybe I'm too pessimistic. If you can't afford to buy it, and pay for it today, what makes you think you'll be able to pay for it later? Esp. after you add in the ridiculous interest charges. You couldn't afford it even without the interest.

I guess people assume they are going to be making a ton of money, "next year," so it will all be ok?

My pessimistic outlook always made me assume I would make less money in the next year, if I were lucky, it would only be a little less, or if I were unlucky, it would dry up completely and I'd make no money. But somehow, that never happened.

I think some people are also wired to be consumers, or at least be more susceptible to marketing. All the "stuff" that people buy, it's almost all just a bunch of crap to me, that I would rather not have the headache of owning, storing, worrying about, etc.

I had never heard of Dave Ramsey until I saw him in the documentary "Maxed Out."
http://www.maxedoutmovie.com/syn/index.html
I read a couple of his books and passed one on to a friend who says it's changed his life. We don't have any debt... listening to Dave Ramsey and other consumer gurus makes me want to keep it that way.

+1

It worked, and still works for me.

I came across Dave Ramsey years ago when he and a guy named Roy Matlock were still just a one-station in Nashville show. They used to call the show the Money Game. Then a few years ago, Dave went National and has done very well.

The bottom line is it is all basic no non-sense economics that work. I think the more complicated we get in our personal finances, the more tendency we have of getting stupid with them. But please do not take offense, it is just my humble opinion based on MY experiences. YMMV.SmileWavy

i always like those shows where they show a bunch of couples with debt problems

husband works ass off, wifey tends to the household, likes to shop, to much, hides bills from hubby and then at some point comes forward in some show with "honey, i think i did a booboo, we'll have to sell 3 of our 5 cars, and the plasma, and i'll get 2 jobs, but you might need to get another one too, or work more and harder in your current one or something, oh yeah, and i've been told i'll have to cook stuff myself instead of eating out 10 times a week"

then hubby goes "huh?" 150 K ( not including mortgage) in debt with 3 kids? 6 years into our marriage, at age 32 ?? , didn't my 85K a year job pay for all this???"

i fail to understand how anybody making 85K a year, is so not in tune with what happens with his money, and how all the goodies that arrive in his massive house, somehow can't be covered by that 85 K (before taxes)

i've had some debt, mostly because i was optimistic and made a few bad decisions
but i friggin knew at all times how much i had open, and how much i could instantly recoup by selling off my 911, at any given time, the max i had really going was 10K , which never even came close to 1/4th of my yearly income, and to me , that was allready way to much for comfort... took action, i'll be debt free early 2008 and intend to keep it that way

Funny you mention him, I was just thinking about him the other day.

Used to listen to his show in 95' on WTN in Nashville when he was local, and doing it with
another guy. Most of his advice is very grounded in the fundamentals, and yes many people
seem to not to be able to grasp the fundamentals. I thought that the show was a bit more
entertaining with the other guy there, but he went off somewhere and Ramsey seems to have
capitalized on it and turned it national with books etc. Good for him.

edit: thanks to v8ranch for the reminder on Roy Matlock's name...

The other day he had a guy that found out that his lovely wife had run up +$200K in credit card debt. She would take her mother, sister (with family) and the dog to Cabo for a week and pay for all of it, she shopped 'til she dropped, etc, etc, etc. The poor smuck had no idea of all this. Dave said he was as bad as his wife because wasn't watching the books and told them they need more help than he can give them.

You might as well go a little further into dept and hire a hit man in that situation.

Thankful I have little debt, a mortgage (1/2 paid off) and my wifes leased car. The banks try to get me in debt everyday. I recently was "congratulated" for being such a good customer and my credit card limit was raised to $20,000. Who needs a card with that high a limit?

This guy sounds like David Chilton, author of the Wealthy Barber, he preaches a similar story. I saw him speak and one of the things that stuck in my mind was when he said "I have never met anyone who said 'I wish I hadn't paid off my mortgage so soon'" Super conservative, dont buy it if you cant pay cash, pay yourself first etc. etc. It and books like it should be mandatory high school reading.

had same thing back in NL
if i'de know that i'de be moving to something like i don't know, Australia in a few years,
all i had to do was not say a thing, then frigging max out them cards and my relocation and first year living costs could be funded in that way


Netherlands is closer to the US then say Belgium where i live now
Belgium credit is regulated by the governement, they can almost not advertise, have to do strict credit checks and what not, hell, credit cards in BE, have to be payed up, every month, no credit you can let loose and just pay minor bits off + interest

My co-worker is paid $180K/yr and also has to work weekends and vacation time to cover his spending....then has to defer paying taxes every year so he can work weekends and vacation to come up w/ that money. For me, it is difficult to be associated w/ anyone this dim.

180K a year???
let's say 50% taxes , health care crapola
that's 90 K left , A YEAR?!

did he build something like the playboy mansion or what??

with a 600 K house, at 20 years, that's 4K a month mortage
leaves him a cool 42 K for all the rest, cars, food, insurances, fuel, whatever

and that's still more then what many people have to do everything with, and he allready has his 600 K house covered


what line of work are you in??
if he can make 180 K, and fail to understand the simplicity of budgeting
then it makes me wonder if i can't get a job there and make the same amount or even more then he does, probably without doing overtime or weekends...

Never heard of Dave Ramsey, but it sounds like simple common sense.

I guess I can say that because I've only had Term life insurance, and I've never leased a car.
I've never had to pay the smallest debt first, because I don't go into debt. It's not rocket science. Just don't spend money you don't have.

The result? I've got a pretty good life, and no debt.

We work in healthcare...and are not physicians...but make more than several physicians in our hospital. His house was $240K. I'm fairly sure that there are several run-of-the-mill car loans (some of the cars are now gone) in his 30 year mortgage. I could go on and on here but the whole thing is beyond my capacity to describe....next purchase I'm aware of is a blue fox (?) coat for wife's x-mas gift.
Oh yeah...his wife works too. I'm pretty sure that it given the opportunity, he could out-spend a $500K/yr income....there is always better boats, hunting land, more expensive dog(s)....

I have been listening to Dave for several years now, and it just so happened that my wife and I had made an independant decision to do exactly what he suggests on his show and in his books, so we both happen to agree with him.

I can tell you from my own life that he is " dead on " with his advice, someone earlier mentioned his filing a chapter 7/11 and that is correct but he makes no bones about it, he went through a bad chapter early in his life and had no other option, he is not an advocate of doing this now.

I still listen to him every day and get some good advice there, if he is not on the air near where you live you can still listen to his show on the web, he is on most NPR stations about three hours a day.

ToddSmileWavy

How can one be so dim an get paid $180k/yr is what I do not understand. What`s his job?

Aurel

Oops, did not read the whole thread. Healthcare, OK. Now I know why there is a healthcare problem in this country. I am glad to learn that my health insurance payments may end up funding this dimwit or the likes of him.

Aurel

I have read the Millionaire Next Door and Charles J. Givens, Financial Self Defense Wealth without Risk. Both of those books agree with what you all are are posing about Dave Ramsey.

I've never heard of him, I basically follow those rules.

I do not buy anything I can't pay cash for. Cars, houses, holidays, TV's. If you can't pay cash you can't afford it. It's that simple. Sometimes I want things I can't afford, so I wait. Society (esp. women) is conditioned to think a) I want it, therefore I need it and b) I deserve it.

But I could just be a misinformed miser.

I will say that he made a great decision at least once....about 13 years ago when he put off the "now" and applied to, attended and finished graduate school.
Today, he enjoys an employment demand that far out-paces supply. He is paid well, works at all hours of the day and night, is required to keep a level head when people are trying to punch out and, because of his pay, is resented by many he works with and for.
However, it may take years to replace him at approximately the cost of his annual pay. Oh, and people in his position have the distinction of enjoying the highest rate of substance abuse of any health care professional....and you never can be sure of who it is you're hiring next.
So, considering the situation in whole, he spends all of his money faster than he can make it. He also has no choice but to come to work every day and night...and when you or yours really need the "dimwit" or his like...you won't consider what he does with the money you pay him. Yet you may be rightfully glad he got there at 2 am or whatever hour something unfortunate (or stupid) occured...and you may never realize he was there.
His vocation is Certified Registered Nurse Anesthetist (CRNA) and here in rural America, his performance (among other more 'routine' responsibilities) is the difference between transfer to the unit (or the helipad) and transfer to the refrigerator.

In the end, he is pretty good for the local economy...better than his other dimwit partners :).

I just stumbled on to his podcast a few days ago (on iTunes). Turns out he also just started a show on Fox Business Network. Most of what he says is definitely just common sense but he seems to have a good knack for explaining basic finance principles and discipline to the mostly working-class folks that call-in or email him. (Most I have heard seem to make $10-20/hr and have virtually no assets or savings).

I don't agree that ALL debt is evil under ALL circumstances but I do truly look forward to being rid of my non-mortage personal debt in the near future. Both of our family businesses currently have no debt and decent cash reserves. It really helps one's stress level.

Afraid I don't see or do this debt thing.
Pay cash for everything, if you don't have enough cash - that usually means you can't afford it meaning you either don't buy it or you save up some more.
We're not talking about rocket science here.

Rob - unfortunately " debt " and " credit cards " have become an American tradition, that is a shame to say but it is true. As a young man with a strong work ethic I made decent money and as a result had numerous credit offers, to which I subscribed and before I knew it my decent money was spent before I made it, too me several years to get caught up and pay those plastic debts off but when I did that I realized that if I did not control the credit it would control me, sometimes hard to resist when you are young, but fortunately I have made it to where I am now. It is a rare day that I carry a balance on any credit card I have, some of which has a limit high enough I can buy most any car at the dealerships in town by flopping one down.

Todd SmileWavy

K9Torro - today - its more than an American tradition, its very widespread over here.
When I hear of a colleague mentioning his cards are maxxed out - he's pretty skint this month then in the next sentence he's asking you what's your thoughts on his new car/television/PC?
Am I missing something here?

Rob - nope your not missing anything, I see the same thing with some of the guys I work with, they sit around a gripe about how little they make moneywise and that they can't seem to save anything up , but then you look outside in the yard and they have the latest truck, car, 4 wheeler, enough guns to start an armory etc....

The real funny thing is most of them won't work any overtime or take a second job , they eat out at least twice a day and if they have a wife , she either does not work or works a low pay job. Most of these same guys are on wife number 2,3,4 or 5 take your pic and are paying out mega child support as well...

If nothing else when I listen to Dave Ramsey and he has people calling in it makes me realize how lucky I am,,,

Todd SmileWavy

"Millionaire Next Door" and "The Millionaire Mind" are both excellent books. Ramsey's advice essentially follows that approach. Simple, common sense advice to build wealth.

So does anyone here know the actual criteria for raising their credit scores through all three of PRIVATE companies(the de facto reporting system for the whole PUBLIC US banking system)?

I bet not.

Anyone ever wonder why?

I just read Millionaire 12-18 months ago and I have made some mistakes that I am now fixing.

I WAS debt free, completely, not even a mortgage, I am in the process of selling a vacation home and the lease on my Audi ends in 9 months (I am handing the car in and walking away) Once the house is sold and the Audi is gone I will be pretty close to debt free again. I made some dumb moves about 2.5 years ago.

With business in Florida slowing, I have run up some debt trying to "keep things together" with my employees, the harsh reality is no one cares about how much debt I have, and I have to look out for me. I have 2 open lines of credit now that need to be delt with because I was trying to help my employees too much. Bottom line is, they don't care or appreciate what I am doing and I am burying myself to try to help them. Its hard to turn into a total a-hole but I am seeing if I want to come out of this slow down in one piece I need to only worry about me.

I am trying like hell to hang on to the 911 but the writing is on the wall, I may have to let it go to in order to clean up the mess I made. :(