# Dave Ramsey questions... **URL:** \ **Category:** Factual Questions\ **Created:** [March 11, 2009, 11:40am UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062 "2009-03-11T11:40:04Z")\ **Posts on this page:** 18\ **Page:** 2
**Author:** ![PhiloVance](https://avatars.discourse-cdn.com/v4/letter/p/e19adc/32.png) [@PhiloVance](https://boards.straightdope.com/u/PhiloVance)\ **Post date:** [October 5, 2010, 9:58pm UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062/21 "2010-10-05T21:58:24Z")
Y’know Clark Howard is just so smarmy and Suze Orman is also smarmy. Dave Ramsey I’ve not heard though I bought his book a year or so ago and haven’t read it. These people are all about themselves and how smart they are. I just change the channel when I hear them come on. I can take care of my own finances without their common sense advice, thank you very much. :dubious: ---
**Author:** ![Sampiro](https://avatars.discourse-cdn.com/v4/letter/s/2acd7d/32.png) [@Sampiro](https://boards.straightdope.com/u/Sampiro)\ **Post date:** [October 5, 2010, 10:27pm UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062/22 "2010-10-05T22:27:46Z")
[QUOTE=Merijeek] 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: [/QUOTE] Hmm…do Mormons do facial hair? [/QUOTE] [Ask Brigham Young](http://brighamyoungfamily.org/s%20Brigham%20Young%20cabinet%20card.1pk.jpg). 😃 I’ve read Ramsey and he gives decent advice. While I have no reason to doubt his religious views are sincere I think his gospel tie-in is a sales gimmick, but the financial advice itself (cut up the credit cards, save up several months of salary, cut out interest charges, etc.) is sound. I think he’s a bit more geared to the working class than Suze Orman, and also a bit less strict. ---
**Author:** ![fruitbat](https://avatars.discourse-cdn.com/v4/letter/f/58f4c7/32.png) [@fruitbat](https://boards.straightdope.com/u/fruitbat)\ **Post date:** [October 5, 2010, 10:46pm UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062/23 "2010-10-05T22:46:06Z")
Dave emphasizes paying off debt, which is what everyone knows him for. His investment advice however is hard to explain, it varies from sound, to bizarre to just plain bad. For example, this: > [@](#): > > Dave does not own any bonds and does not suggest them as part of your investment plan. People mistakenly believe bonds are “safe” investments that have slightly lower rates of return than equities. Single bonds can actually be very volatile and go down significantly in value. Bond mutual funds can at least be tracked for historical returns but do not offer the returns equity mutual funds do. runs contrary to the vast majority of experts. He doesn’t focus on the role of costs in investments or asset allocation really. In fact, I am not quite sure how you build an asset allocation without bonds. He doesn’t need credentials to host a show, but he does channel people to “his” advisers who sell high cost investment products. He really should read a book or two before moving beyond the ‘pay off all your debts’ stuff. ---
**Author:** ![MandaJo](https://avatars.discourse-cdn.com/v4/letter/m/ac91a4/32.png) [@MandaJo](https://boards.straightdope.com/u/MandaJo)\ **Post date:** [October 5, 2010, 11:41pm UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062/24 "2010-10-05T23:41:35Z")
> [@Harriet\_the\_Spry](#): > > 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! I suspect that for people in serious debt, the best choice would be to pay off the debts you can’t run back up in a moment of weakness. ---
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [October 6, 2010, 1:53pm UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062/25 "2010-10-06T13:53:17Z")
> [@Harriet\_the\_Spry](#): > > 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! Math teacher for 15 years here from middle school to college. This is one of Ramsey’s pieces of advice I agree with. Maybe 4% of the population can approach a problem mathematically with 96% making emotional choices. Cite? Look at the mortgage/credit crisis. How many people got themselves overextended for emotional reasons and by not thinking mathematically? Rather than working against that, why not work with it? ---
**Author:** ![Truman\_Burbank](https://avatars.discourse-cdn.com/v4/letter/t/ecc23a/32.png) [@Truman\_Burbank](https://boards.straightdope.com/u/Truman_Burbank)\ **Post date:** [October 6, 2010, 2:33pm UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062/26 "2010-10-06T14:33:31Z")
well, OK maybe not. But I’ve been married almost 20 yrs, trying to hold the same financial line that Dave espouses (not because of him, I’d never heard of him). My wife runs across him on the radio and starts to _believe_! She’s quoting his stuff at me like she never heard it before. If he can get my wife to pay attention to sound fiscal behavior, he’s beyond OK in my book. ---
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [October 6, 2010, 3:28pm UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062/27 "2010-10-06T15:28:31Z")
Oh, one thing I disagree with. He talks about not worrying about the FICO score because that is just a score of how much debt you can afford (I forget his exact wording). If everyone thought like him, that’s great, but try to function in the real world (cell service, insurance, getting a lease/mortgage, etc.)with a FICO of 520. ---
**Author:** ![jayjay](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jayjay/32/6765_2.png) [@jayjay](https://boards.straightdope.com/u/jayjay)\ **Post date:** [October 6, 2010, 4:50pm UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062/28 "2010-10-06T16:50:04Z")
> [@Saint\_Cad](#): > > Oh, one thing I disagree with. > He talks about not worrying about the FICO score because that is just a score of how much debt you can afford (I forget his exact wording). If everyone thought like him, that’s great, but try to function in the real world (cell service, insurance, getting a lease/mortgage, etc.)with a FICO of 520. It’s funny that this is just the situation I’m finding myself in right now. I got bit by credit about 15 years ago. Finally got things settled about 10 years ago. Once bitten, twice shy…I haven’t applied for credit anywhere since then. Bought cars from relatives, rented, lived with SOs, no cards. I need to replace my aging car, applied for financing for around $6000 for this particular car, got turned down THREE TIMES because I haven’t had credit in 10 years. My report is basically blank since 2000. The dealer is still trying to arrange financing with SOMEONE… ---
**Author:** ![furt](https://avatars.discourse-cdn.com/v4/letter/f/439d5e/32.png) [@furt](https://boards.straightdope.com/u/furt)\ **Post date:** [October 6, 2010, 5:20pm UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062/29 "2010-10-06T17:20:01Z")
> [@Saint\_Cad](#): > > Oh, one thing I disagree with. > He talks about not worrying about the FICO score because that is just a score of how much debt you can afford (I forget his exact wording). If everyone thought like him, that’s great, but try to function in the real world (cell service, insurance, getting a lease/mortgage, etc.)with a FICO of 520. Actually, you can function just fine with a FICO of zero, if you are prepared to pay cash (or debit card) for everything, which is what Ramsey advocates. I know someone who lives like this, and she does OK. I’m not sure it’s what I’d choose, but it’s not impossible. ---
**Author:** ![MandaJo](https://avatars.discourse-cdn.com/v4/letter/m/ac91a4/32.png) [@MandaJo](https://boards.straightdope.com/u/MandaJo)\ **Post date:** [October 6, 2010, 5:43pm UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062/30 "2010-10-06T17:43:20Z")
On one hand, there’s some truth to the idea that if you need emergency credit, you need it right then, and a good credit score is an important tool to have. I needed major, major plumbing repairs a few years back, and I had to borrow some of the money to afford them. It was really nice to be able to get a good rate. On the other hand, “I need to build my credit score” has to be one of the top five most destructive lies people tell themselves (up there with “[spouse] sure goes through the beer quickly these days” and “My luck has to change.”), and I can see the wisdom in telling people to ignore the temptation. I think you have to look at the broader safety net to decide. Lucky for me, in a real life or death emergency, my parents could write me a check for any sum that any bank would loan me. I just would hate to ask them (which is why I borrowed from a bank to fix my plumbing). But I know plenty of people with no safety net at all–there is no one they can call for significant funds. If that’s your situation, a good credit score is probably more important. ---
**Author:** ![TheFifthYear](https://avatars.discourse-cdn.com/v4/letter/t/958977/32.png) [@TheFifthYear](https://boards.straightdope.com/u/TheFifthYear)\ **Post date:** [October 6, 2010, 6:18pm UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062/31 "2010-10-06T18:18:10Z")
Right, but in that situation about 5% of the problem is having a poor credit score and about 95% is that you (this is the hypothetical, general “you”) don’t have an adequate emergency fund. Obviously, that’s of little concern if you need the money _now_, but some people obsess over raising their credit score when what they should be working on is not needing credit. ---
**Author:** ![CurtC](https://avatars.discourse-cdn.com/v4/letter/c/ce73a5/32.png) [@CurtC](https://boards.straightdope.com/u/CurtC)\ **Post date:** [October 6, 2010, 7:58pm UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062/32 "2010-10-06T19:58:41Z")
> [@Solfy](#): > > 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. My former boss was a Ramsey fan, so I gave him a listen. He seemed to give good advice, which the majority of people should heed, it’s just that I’m not his target audience - my house is paid off, I have no debt, and my wife and I haven’t had a car payment since 1989. But this is what made me wonder about him: he bills himself as giving “Biblically-based” financial advice. I know the Bible pretty well, and the only financial advice I can think of in the Bible is in the Sermon on the Mount, when Jesus says to “take therefore no thought for the morrow: for the morrow shall take thought for the things of itself.” ---
**Author:** ![GreasyJack](https://avatars.discourse-cdn.com/v4/letter/g/df705f/32.png) [@GreasyJack](https://boards.straightdope.com/u/GreasyJack)\ **Post date:** [October 6, 2010, 7:59pm UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062/33 "2010-10-06T19:59:06Z")
From what I recall listening to him once or twice (I drove a lot for work and he seemed to be the sanest person on the radio), he claimed that when you needed to borrow for a major purchase (basically, for your house) you could find a bank that did “manual underwriting” where they actually look at your income, assets, expenses, etc. instead of just going by your credit score and so not having much credit history shouldn’t be an issue. I’ve personally never actually heard of a bank doing this, though. Do they? ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [October 6, 2010, 8:27pm UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062/34 "2010-10-06T20:27:26Z")
His religious views are overwhelming and I’m not a fond of his “folksy Christianness” - but his advice is pretty sound - mostly common sense - at least regarding getting OUT of debt and his inspired a TON of people. I think his investment advice sucks. IIRC he claims 12% long term return. I think if you are counting on 12% you are not being nearly conservative enough. For a guy so conservative with debt to tell people “12% return” seems out of character. (I hope I get 12% return, I do my planning with 8%). ---
**Author:** ![crazyjoe](https://avatars.discourse-cdn.com/v4/letter/c/f14d63/32.png) [@crazyjoe](https://boards.straightdope.com/u/crazyjoe)\ **Post date:** [October 6, 2010, 9:01pm UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062/35 "2010-10-06T21:01:06Z")
Yes, this was one of his schpiels that stuck out at me…he labels it as “Free cars for life” or something like that. First, it required starting out with a very reliable used car for a ridiculously low price. You finance that one, but put the difference between that and the car payment you would have had on a new car into a mutual fund or some sort of investment making 12 - 15% After 4 years, you will have enough money to buy a BETTER used car with CASH, and stepping up every year or so. ---
**Author:** ![dracoi](https://avatars.discourse-cdn.com/v4/letter/d/90db22/32.png) [@dracoi](https://boards.straightdope.com/u/dracoi)\ **Post date:** [October 6, 2010, 9:15pm UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062/36 "2010-10-06T21:15:38Z")
> [@GreasyJack](#): > > From what I recall listening to him once or twice (I drove a lot for work and he seemed to be the sanest person on the radio), he claimed that when you needed to borrow for a major purchase (basically, for your house) you could find a bank that did “manual underwriting” where they actually look at your income, assets, expenses, etc. instead of just going by your credit score and so not having much credit history shouldn’t be an issue. I’ve personally never actually heard of a bank doing this, though. Do they? Some banks do, yes. More of them did before the credit crisis hit. Local banks are more likely to be willing to do this than major chains. Even the big banks do it to some degree - very few decisions (for major financing) are made on credit score alone in the lending world. Personally, I think credit scores are more reliable than manual underwriting. They were certainly a better predictor of who would be a good tenant when I was doing property management. ---
**Author:** ![Skammer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/skammer/32/143_2.png) [@Skammer](https://boards.straightdope.com/u/Skammer)\ **Post date:** [October 6, 2010, 9:35pm UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062/37 "2010-10-06T21:35:56Z")
> [@CurtC](#): > > I know the Bible pretty well, and the only financial advice I can think of in the Bible is in the Sermon on the Mount, when Jesus says to “take therefore no thought for the morrow: for the morrow shall take thought for the things of itself.” “The rich rule over the poor, and the borrower is slave to the lender” - Proverbs 22:7 “Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law.” - Romans 13:8 “Dishonest money dwindles away, but he who gathers money little by little makes it grow.” - Proverbs 13:11 “Whoever loves money never has money enough; whoever loves wealth is never satisfied with his income.” - Ecclesiastes 5:10 Parable of the Ten Talents- Mattew 25:14-28 The Bible talks about money _a lot_ – although the biggest piece of advice is pretty much “hold onto your money lightly and be generous with it.” ---
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [October 7, 2010, 12:10am UTC](https://boards.straightdope.com/t/dave-ramsey-questions/489062/38 "2010-10-07T00:10:11Z")
> [@GreasyJack](#): > > From what I recall listening to him once or twice (I drove a lot for work and he seemed to be the sanest person on the radio), he claimed that when you needed to borrow for a major purchase (basically, for your house) you could find a bank that did “manual underwriting” where they actually look at your income, assets, expenses, etc. instead of just going by your credit score and so not having much credit history shouldn’t be an issue. I’ve personally never actually heard of a bank doing this, though. Do they? Now a days? No! I can buy a house cheaper than I pay rent right now. My credit score is below 580, doesn’t matter if it is 460 or 579, no one will even look at me for a house. That’s another thing about Ramsey’s advice. You can get you credit score to a decent level in a year but it takes 7 years to get a score of zero. [Previous page](https://boards.straightdope.com/t/dave-ramsey-questions/489062.md?page=1)