I have a friend, Ray, who follows the advice of financial talk show host Dave Ramsey and is probably his biggest fan. I’ve never listened to the show, but hey, if the plans and suggestions offered there save you money and make you happy, knock yourself out.
Another “friend” has made it his life’s mission to try to ruin everything that Ray has accomplished by running Ramsey down, belittling the advice he gives on the show and saying that Ray is a fool to believe anything Ramsey says. His latest tirade is the “fact” that Ramsey is LDS (Mormon) and that he is just a part of the Mormon plan to take over the world. (Move over Jews and Catholics!)
Setting aside the obsession that this “friend” has on Dave Ramsey, what ARE Ramsey credentials? Does he actually need any? Have any Dopers listened to his show? What are your impressions? Have you followed any of his advice and what were your results? Is Ramsey really LDS and who gives a hoot anyway?
I’ve listened to Ramsey occasionally when I’ve been driving with a fan. He really doesn’t do anything at all controvertial - he just thinks people should pay off any debt they have and (slightly controvertial) should then never, ever, ever go into debt on anything at all unless there is absolutely no way to avoid it.
As for his credentials, I’m sure someone will be along shortly - but look at all the people who had loads of credentials (Masters of the Universe, remember?) who have recently managed to drive countless companies, and countries, into the ground.
And tell your other friend to stop being such a dick.
Ramsey is evangelical Christian, involved in Christ Church in Nashville, TN & then Fellowship Bible Church in Brentwood, TN. Google up his name or go to Wikipedia & it gives a good summary of his credentials & experience. Long story short- he was a real estate whiz who over-extended himself, filed bankruptcy, messed up his home life (he had admitted, IIRC, to either having an affair or coming close), accepted Christ, reconciled with his wife, built himself back up financially & now works to help people get themselves out of their financial holes.
AFAIC, he does good work. He makes a lot but he also gives away a lot. I’d be better off if I listened to him but I’m not big into deferred gratification.
Other friend is a credit-junkie, I bet, and can’t stand to see someone get off the cards. Screw him. It sounds like the alcoholic ‘friend’ who tries to sabotage one’s rehab.
You don’t need any credentials to do a radio show, you just need good ratings. Same is true with people who write advice books, etc. Some of them have BS, MS or PhDs but some do not.
Having said that, he has a BS in finance and real estate so that’s probably more than many “experts” have who give financial advice.
Maybe I’ll give a listen. That plan doesn’t sound all that crazy does it? We have a mortgage on our residence that, after 8 years, is 2/5 paid off and the only credit card debt is 3k on Home Depot that is no interest/no payment until September. That debt is for rehab materials on a rental that we actually might sell this summer. Rent or sale money will pay that off.
On the other hand, our other “friend” is starting to sound like he needs serious professional help.
Ya know, I need to utilize Wikipedia more… maybe I’m just an old fart who still thinks that the dictionary (book) is the only resource available!!
:p:p:p:p:p:p
Well, there goes the Mormon-world-domination plans! :smack:
I can see them now, with pencil-thin moustaches, black cloaks and top hats, shaking their fists at the sky screaming, “Curses! Foiled again!” :rolleyes:
Heh - that’s my reaction as well. I used to listen to him when I lived in Mississippi - he really does give good advice, and certainly sounds compassionate to his callers. Talking finances to a stranger on the radio would be a daunting (and potentially embarrassing) experience, but he does a very good job of being understanding and making his suggested strategies sound feasible.
This. I don’t see how someone could hate Ramsey because what he says is pretty simple. I do think that at times he can be unrealistic:
Ramsey: Don’t go into debt over a car!
Me: Gee, thanks, Dave, but I do have to get to work and I don’t have 7 or 8 grand of free cash lying around.
Ramsey: Buy a two thousand dollar car!
Me: I don’t have two thousand, either, and I don’t have money to take that two thousand dollar piece of crap to the mechanic every week.
Ramsey: You are just credit happy!!!
If you follow Ramsey’s advice, but back off about two notches, you will be fine.
The only piece of Ramsey advice I have heard that I disagree with is his advice to pay off the smaller bills first, not the ones at the highest interest rate. I will concede that this may well have a psychological benefit to some, even many, people. However, you can also run the numbers and see exactly how much more it is costing you to do it that way. I say find some other way to get your positive psychological reinforcement. Make a little chart with gold stars or something!
My husband is a Ramsey fan, so I’ve been casually exposed to his teachings. I’m missing what the Christian angle is behind “don’t run your finances into the ground,” which seems to be the main message. Seems like sound advice for anyone regardless of religious leanings or lack thereof.
I do tire of the emphasis that having any debt is BAD. Sure, debt is not desirable. On the other hand, having a student loan and a car that you’re still paying on does not make you a bad person. It just makes you pay more. I can see how not being debt-free rankles my husband after too much Ramsey exposure, and I have to point out that we’re working on it, one baby step at a time. On the other hand, listening to the situations that some of his callers have gotten into can be a guilty little ego boost.
It’s certainly true that mathematically, your advice is better than Ramsey’s. However, his experience seems to be that paying off smaller loans gives people the incentive to stay on the plan enough so that they do eventually pay off all their debts, and the difference in interest is really not all that much, usually.
I think Ramsey has said that debt is OK in some circumstances like these. However, let’s look at the thinking in more detail.
The problem is two-fold. First, most people are in the situation you describe (not being able to afford a car) because they have high had debt and low savings most of their lives - buying the car on credit just continues the problem. Second, when people look at making a purchase on credit, they spend more - about twice as much more.
So there’s a clear need and justification for the debt, BUT taking on the debt continues the previous negative habits that created the need and justification for the debt in the first place. You will always need something - cars, houses, medical bills, a new furnace, etc. The key to financial success for most people is to break the cycle of getting those things through debt. Sometimes, it means taking the bus to work for a while.
i get really repulsed by his seminars. Only 250 dollars to tell me how to save money!
Well, may I tell you how I just saved 250 dollars?
When I did a cursory inspection of his book, it just seemed to be a rehash of money saving tips.
He also had the gem about the 2000 dollar car. “Get a perfect used car, instead of buying a new one!” Oh, a *perfect *used one. I only wanted the crappy used ones that I could spend a lot of money on! Stupid me!
Ramsey’s advice is good for those who need it I guess, but it’s sort of like abstinence-only sex ed–long on absolute rules and short on actual facts and the tools to analyze the facts.
For example, I’ve consolidated my student loans at around 2 percent interest for 30 years. If Dave thinks I should pay those off early just so I can scream “I’m debt freeeeeeee!” on his radio show, then he’s absolutely nuts. I’m paying the minimum on those until the last dollar is paid.
But I guess some people would just charge up all their credit cards unless they decided to adopt an absolute rule to never incur any debt, so it’s good that Dave is out there for these types.
You’re basically right. Although, it’s not so much that they “just charge up” their credit cards. There are some shopaholics, but it’s rarely that simple.
Let’s look at it this way: things like expensive car repairs happen eventually. They may happen once every 5 years. Some people figure that a $1000 repair every 5 years means they should save $200 a year against that repair happening. Others, for a variety of reasons, don’t think about that. When the $1000 once-in-5-years repair comes along, the logical choice is to charge it. After all, they need the car and it was an “unexpected” repair.
When you look at people’s finances over the long term (say, 10 years) you see that some people accrue more and more debt because of these “unexpected” things while others had savings in place.
Until they can learn to deal with the big picture, they’re better of avoiding all debt entirely. (And the people who do deal well with the big picture set things up to strategically minimize their need for debt).
Actually, “Mormons”, or members of The Church of Jesus Christ of Latter-Day Saints, look like everyone else. There’s a good chance you’ve met or know a Mormon without even realizing it. It’s all part of that world domination plan Just kidding!
I like Dave, and he has showed up to worship at my church so I know the Mormon thing is wrong.
Back when my wife and I got married, we followed Dave’s advice and cut back on all our spending until we paid off all our debt (two cars, credit cards, student loans) then we cut up our credit cards. We’ve managed to build a decent savings account to pay for unexpected costs because we’re not paying all that debt. When we need a car, we buy a used one with a large down payment and pay it off as quickly as possible.
The only time he annoys me is when he gets political and complains about taxes and so forth. As long has he sticks to financial advice, he’s pretty solid. Yes he’s hard-core; but most of the people who call into his show need someone to slap them around because they’ve gotten themselves into a deep hole and need drastic measures to climb out.
I’d rather listen to Dave Ramsey than most anything else on a station that he would likely be on (usually Christian or Conservative). There is some good basic information there that many people would benefit from - but I think his show has too much of an underlying political agenda to it.
A much better choice for financial advice is the Clark Howard Show. I like this guy because he walks neutrally through politics, even though he is a conservative. I have no idea what religion he is - those kind of tangents never come up in his shows. And his advice is much more sound. I wouldn’t waste time listening to Ramsey for financial advice if Howard is an alternative.
Just kidding!