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

[URY914]

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.

[legion]

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.

[lendaddy]

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.

[tobster1911]

Originally Posted by URY914

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.

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.

[pwd72s]

Originally Posted by URY914

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.

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.

[URY914]

Originally Posted by pwd72s

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.

[pwd72s]

Originally Posted by URY914

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.

[URY914]

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.

[URY914]

Originally Posted by pwd72s

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

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

[the]

Originally Posted by URY914

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.

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.

[the]

Originally Posted by lendaddy

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.

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."

[onewhippedpuppy]

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.

[GDSOB]

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!

[the]

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.

[LeeH]

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.

[SCWDP911]

Originally Posted by pwd72s

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.

+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.

[svandamme]

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

[Sonic dB]

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...

[URY914]

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.

[Dave L]

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.