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DansDeals Forum => Credit Cards And Finance => Topic started by: Kobe Bryant on June 08, 2020, 02:18:07 PM

Title: Dave Ramsey Plan
Post by: Kobe Bryant on June 08, 2020, 02:18:07 PM
"American household debt hit a record $13.21 trillion in 2018. If you had to write that check it would read $13,210,000,000,000." Debt.org

Personal finances is something that unfortunately isn't taught as part of the basic curriculum in schools, and as such many are financially illiterate.
Whether or not one agrees with the entire Dave Ramsey Plan (DRP), we should all be able to agree on the simple principle of "living within one’s means." Comments like  "I know many people that spend within their means no matter what. To each their own."  (https://mishpacha.com/at-all-costs-the-conversation-continues-2/)remind me how it isn't just common sense but rather financial education that will change the way we look at personal finances.
Title: Re: Dave Ramsey Plan
Post by: moko on June 08, 2020, 02:35:01 PM
"American household debt hit a record $13.21 trillion in 2018. If you had to write that check it would read $13,210,000,000,000." Debt.org

Personal finances is something that unfortunately isn't taught as part of the basic curriculum in schools, and as such many are financially illiterate.
Whether or not one agrees with the entire Dave Ramsey Plan (DRP), we should all be able to agree on the simple principle of "living within one’s means." Comments like  "I know many people that spend within their means no matter what. To each their own."  (https://mishpacha.com/at-all-costs-the-conversation-continues-2/)remind me how it isn't just common sense but rather financial education that will change the way we look at personal finances.
I don't think you want to be bantering about DR around these forums.
Also, in our circles you need an education fund way before college.

Title: Re: Dave Ramsey Plan
Post by: Euclid on June 08, 2020, 02:35:32 PM
Why is prepaying a mortgage a good thing with today's mortgage rates? Seems like a dumb thing to do, just take the excess money and invest it - all you need to make is more than ~4% (if not less).
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on June 08, 2020, 02:57:28 PM
Why is prepaying a mortgage a good thing with today's mortgage rates? Seems like a dumb thing to do, just take the excess money and invest it - all you need to make is more than ~4% (if not less).
That isn't the point. I would love to know how many people in our community are even in the position to prepay their mortgage or invest that extra money.
Title: Re: Dave Ramsey Plan
Post by: Euclid on June 08, 2020, 03:16:48 PM
That isn't the point. I would love to know how many people in our community are even in the position to prepay their mortgage or invest that extra money.
Oops sorry for taking it off topic. The choices are a little confusing for me because I don't necessarily agree with the ordering.
Title: Re: Dave Ramsey Plan
Post by: gozalim on June 08, 2020, 03:58:55 PM
Why is prepaying a mortgage a good thing with today's mortgage rates? Seems like a dumb thing to do, just take the excess money and invest it - all you need to make is more than ~4% (if not less).
and where are you earning a safe %4 ?
Title: Re: Dave Ramsey Plan
Post by: aygart on June 08, 2020, 04:50:34 PM
and where are you earning a safe %4 ?
my whole life policy

@ExGingi
Title: Re: Dave Ramsey Plan
Post by: ExGingi on June 08, 2020, 05:36:52 PM
my whole life policy

@ExGingi

Indeed. My Whole Life policies give me anywhere between a 3% to 5% safe rate of return (besides for providing a death benefit and not generating a 1099).
Title: Re: Dave Ramsey Plan
Post by: gozalim on June 08, 2020, 05:39:37 PM
and -in context of this discussion- you can 'prepay' it?
Title: Re: Dave Ramsey Plan
Post by: ExGingi on June 08, 2020, 05:45:35 PM
Why is prepaying a mortgage a good thing with today's mortgage rates? Seems like a dumb thing to do, just take the excess money and invest it - all you need to make is more than ~4% (if not less).

Here is another way to look at this:

Prepaying a (presumably fixed rate) mortgage converts a guaranteed CASH LIQUID asset into non-guaranteed, illiquid HOME EQUITY.

Now I know that when home prices are rising and banks are easily giving HELOCs, many people might not realize the risks involved. But remember that HELOCs can be frozen, shut down, or simply not offerred at any time the banks don't want to lend. Also, while we've seen an outstanding increase in home values (especially in BKLN and LKWD), prices don't always go up (they are possibly a little down from their peak). And here's something many people miss - prepaying a mortgage is irrelevant to your net worth, I actually know people that were kicking themselves for not having larger mortgage balances during the Making Home Affordable loan modification days.

Also, don't forget tax ramifications.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on June 08, 2020, 05:46:17 PM
and -in context of this discussion- you can 'prepay' it?
The Whole Life? Yes! If set up correctly and with the right companies.
Title: Re: Dave Ramsey Plan
Post by: gozalim on June 08, 2020, 06:00:55 PM
Here is another way to look at this:

Prepaying a (presumably fixed rate) mortgage converts a guaranteed CASH LIQUID asset into non-guaranteed, illiquid HOME EQUITY.

Now I know that when home prices are rising and banks are easily giving HELOCs, many people might not realize the risks involved. But remember that HELOCs can be frozen, shut down, or simply not offerred at any time the banks don't want to lend. Also, while we've seen an outstanding increase in home values (especially in BKLN and LKWD), prices don't always go up (they are possibly a little down from their peak). And here's something many people miss - prepaying a mortgage is irrelevant to your net worth, I actually know people that were kicking themselves for not having larger mortgage balances during the Making Home Affordable loan modification days.

Also, don't forget tax ramifications.
speaking of liquid, how liquid is the cash in a whole life policy?
Easier /more reliably available to access than a HELOC?
Title: Re: Dave Ramsey Plan
Post by: aygart on June 08, 2020, 08:26:20 PM
Indeed. My Whole Life policies give me anywhere between a 3% to 5% safe rate of return (besides for providing a death benefit and not generating a 1099).

Before or after leveraging?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on June 08, 2020, 09:22:20 PM
and where are you earning a safe %4 ?
US Saving Bonds
Title: Re: Dave Ramsey Plan
Post by: CountValentine on June 08, 2020, 09:22:49 PM
my whole life policy

@ExGingi
More than 4%.  :)
Title: Re: Dave Ramsey Plan
Post by: ExGingi on June 08, 2020, 09:36:22 PM
speaking of liquid, how liquid is the cash in a whole life policy?
Easier /more reliably available to access than a HELOC?

There's a reason banks will give 95% LTV against the Cash Value of a Whole Life policy (I know of one bank that will actually go to 100% LTV with credit scores of 750+.

I've seen HELOCs being shut down for people with perfect credit. The cannot happen with the Cash Value of Whole Life. If banks won't lend, the insurance company gladly will.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on June 08, 2020, 09:41:06 PM
I've seen HELOCs being shut down for people with perfect credit.
Home value falls?
Title: Re: Dave Ramsey Plan
Post by: 12HRS on June 08, 2020, 10:19:06 PM
What happens when you lose your job and cant make payments towards your WL policy?
Title: Re: Dave Ramsey Plan
Post by: ExGingi on June 09, 2020, 01:59:24 PM
What happens when you lose your job and cant make payments towards your WL policy?

What happens to all other payments when you lose your job? Housing? Medical insurance? Utility Bills, etc.?

If the policy was properly overfunded, and especially if the policy is (even partially) seasoned, the policy will have enough to self support itself through the hard time. Also, if policy was set up with regular overfunding, it's easier to dial down the premium amount while keeping the coverage unaffected.
Title: Re: Dave Ramsey Plan
Post by: 12HRS on June 09, 2020, 02:12:58 PM
What happens to all other payments when you lose your job? Housing? Medical insurance? Utility Bills, etc.?

If the policy was properly overfunded, and especially if the policy is (even partially) seasoned, the policy will have enough to self support itself through the hard time. Also, if policy was set up with regular overfunding, it's easier to dial down the premium amount while keeping the coverage unaffected.

whole point of paying off house was to not have the risk..So now this WL policy is the emergency fund? One can also borrow from their retirement accounts but its not generally smart to do that.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on June 09, 2020, 03:45:22 PM
whole point of paying off house was to not have the risk..So now this WL policy is the emergency fund? One can also borrow from their retirement accounts but its not generally smart to do that.
So at what point would one pay off a house and not have "the risk"?

So now you are talking about 3 asset types: A Whole Life insurance policy, A house (presumably you're referring to primary residence), and An employer sponsored retirement account (IRAs don't generally allow for loans, CARES act being the exception allowing for a withdrawal that can be redeposited).

The WL should not be an emergency fund, but it could be used as a backup to such. Unlike the other two assets, which would be leveraged to secure a loan, that could decline in value while a loan is outstanding, a Whole Life policy, by design and definition, cannot decline in value (with the exception of the cost of some riders that could eat into the policy's value, none of this should be an issue if working with a competent agent).
Title: Re: Dave Ramsey Plan
Post by: 12HRS on June 09, 2020, 10:56:47 PM
So at what point would one pay off a house and not have "the risk"?

Most people on his plan pay off their house within 7-10 years.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on June 09, 2020, 11:08:16 PM
Most people on his plan pay off their house within 7-10 years.
So they converted cash into equity in their home at an accelerated pace. Saving (tax deductible) mortgage interest. If "the risk" is not being able to make housing payments, they will still have property taxes and homeowners insurance (as well as other utilities).

The only logical argument I can hear about prepaying the mortgage is saving the mortgage interest. With mortgage rates at the low 3s (and potentially tax deductible, making the interest bite even lower) one needs to consider the alternatives to see how much sense it makes. Obviously every person's situation and personality is different.
Title: Re: Dave Ramsey Plan
Post by: moko on June 09, 2020, 11:11:44 PM
So they converted cash into equity in their home at an accelerated pace. Saving (tax deductible) mortgage interest. If "the risk" is not being able to make housing payments, they will still have property taxes and homeowners insurance (as well as other utilities).

The only logical argument I can hear about prepaying the mortgage is saving the mortgage interest. With mortgage rates at the low 3s (and potentially tax deductible, making the interest bite even lower) one needs to consider the alternatives to see how much sense it makes. Obviously every person's situation and personality is different.
He's very clear that paying off one's mortgage is a behavioral decision and not a logical decision. The question he asks to anyone asking why not rather invest the money is " Would borrow money on your home to invest? If the answer is no, then this is the same thing"
Some might borrow money on their home to invest
Title: Re: Dave Ramsey Plan
Post by: 12HRS on June 09, 2020, 11:18:46 PM
He's very clear that paying off one's mortgage is a behavioral decision and not a logical decision. The question he asks to anyone asking why not rather invest the money is " Would borrow money on your home to invest? If the answer is no, then this is the same thing"
Some might borrow money on their home to invest

This, and its about the freedom one has when the pressure of paying monthly bills is removed. (not in the sense of freedom to stop working but the freedom to be able to search for the right opportunities without the pressure on your head of making ends meet)

they will still have property taxes and homeowners insurance (as well as other utilities).

obviously there are some expenses that will never disappear.
Title: Re: Dave Ramsey Plan
Post by: David61 on June 09, 2020, 11:21:07 PM
So they converted cash into equity in their home at an accelerated pace. Saving (tax deductible) mortgage interest. If "the risk" is not being able to make housing payments, they will still have property taxes and homeowners insurance (as well as other utilities).

The only logical argument I can hear about prepaying the mortgage is saving the mortgage interest. With mortgage rates at the low 3s (and potentially tax deductible, making the interest bite even lower) one needs to consider the alternatives to see how much sense it makes. Obviously every person's situation and personality is different.

Much harder to get tax benefit for mortgage payments (e.g. in NJ), especially with average size frum family, given recent (2018) changes to IRS standard deductions.
Most are likely not getting much if any tax benefit relating to their mortgage anymore. Few probably realize that.
Title: Re: Dave Ramsey Plan
Post by: moko on June 09, 2020, 11:42:43 PM
obviously there are some expenses that will never disappear.
Time to conquer an island!  :) off the grid! all solar.
off topic... I just stayed at a gorgeous cottage in VT (https://www.homeaway.com/vacation-rental/p9258434?adultsCount=1&haExternalSourceId=e6e31be0-9d41-11ea-b839-cc8bab4de691%20c5e33484-a1ac-4290-8101-8700a57cde42%20hasc%20email&utm_campaign=HAUS_TRV_OLB_HASC_bookingRequest_PPB&utm_content=listing-id-121.9258434.8278493&utm_medium=email&utm_source=SYS&utm_term=20200523) (work related) totally on solar. even the well pump. They don't have a gas hookup. Induction cooktop, electric oven. Supposedly a net positive carbon footprint.
Quote from: SunCottage Welcome Packet
Cannabis & Hemp
 It is now legal in Vermont for citizens to grow marijuana for personal use. It can’t
 be sold, but it can be shared, if you would like to sample some of our home-grown
 let us know. While we don’t partake ourselves, we love growing things! In 2019
 we received our hemp license to grow for the CBD market. You may see them
 growing in the garden
:D
Title: Re: Dave Ramsey Plan
Post by: ExGingi on June 10, 2020, 07:58:12 AM
He's very clear that paying off one's mortgage is a behavioral decision and not a logical decision. The question he asks to anyone asking why not rather invest the money is " Would borrow money on your home to invest? If the answer is no, then this is the same thing"
Some might borrow money on their home to invest
This, and its about the freedom one has when the pressure of paying monthly bills is removed. (not in the sense of freedom to stop working but the freedom to be able to search for the right opportunities without the pressure on your head of making ends meet)

obviously there are some expenses that will never disappear.
So now that we agree on that. What's there to argue about? Based on that argument, the Dave Ramsey Plan should be instructing people to purchase heavily overfunded Whole Life insurance in a way that it's either fully paid off or self sustaining in 10 years or less. No more life insurance bills to worry about. And peace of mind of having coverage that will never expire.
Title: Re: Dave Ramsey Plan
Post by: moko on June 10, 2020, 08:15:57 AM
This, and its about the freedom one has when the pressure of paying monthly bills is removed. (not in the sense of freedom to stop working but the freedom to be able to search for the right opportunities without the pressure on your head of making ends meet)

obviously there are some expenses that will never disappear.

So now that we agree on that. What's there to argue about? Based on that argument, the Dave Ramsey Plan should be instructing people to purchase heavily overfunded Whole Life insurance in a way that it's either fully paid off or self sustaining in 10 years or less. No more life insurance bills to worry about. And peace of mind of having coverage that will never expire.
ah, his argument to that is to keep investments and insurance separate.
He views WL as a long term investment but you can do much better with other, relatively safe investment tools.
In regards to strict insurance, term is way cheaper dollar for dollar than WL.
I'm in my mid 30s and obese. I pay $1400 annually for 1mil,  30 yr term.
What would I have to pay in whole life to receive a 1mil pay out?
Title: Re: Dave Ramsey Plan
Post by: Mordyk on June 10, 2020, 08:16:20 AM
This, and its about the freedom one has when the pressure of paying monthly bills is removed. (not in the sense of freedom to stop working but the freedom to be able to search for the right opportunities without the pressure on your head of making ends meet)

obviously there are some expenses that will never disappear.

So now that we agree on that. What's there to argue about? Based on that argument, the Dave Ramsey Plan should be instructing people to purchase heavily overfunded Whole Life insurance in a way that it's either fully paid off or self sustaining in 10 years or less. No more life insurance bills to worry about. And peace of mind of having coverage that will never expire.
He says not to buy whole life.  He says the only reason to have life insurance is so your family can continue living.  Thats why you only need term until you built wealth.  Go on youtube and find out what he thinks of whole llife.  Its the devil ;D
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 23, 2020, 01:48:00 PM
(https://i.postimg.cc/rwS23C0q/20200809144357-IMG-1930.jpg) (https://postimg.cc/yDYGSRyG)

(https://i.postimg.cc/VsMgj73s/20200809144458-IMG-1942.jpg) (https://postimg.cc/kDJWCyJL)

(https://i.postimg.cc/BZM6wsWm/20200809144337-IMG-1927.jpg) (https://postimg.cc/RqJ4NkZt)

(https://i.postimg.cc/Z50yLnCP/20200809141719-IMG-1872.jpg) (https://postimg.cc/ZWtRbTP0)
Title: Re: Dave Ramsey Plan
Post by: avromie7 on July 23, 2020, 02:08:06 PM
This, and its about the freedom one has when the pressure of paying monthly bills is removed. (not in the sense of freedom to stop working but the freedom to be able to search for the right opportunities without the pressure on your head of making ends meet)

obviously there are some expenses that will never disappear.

So now that we agree on that. What's there to argue about? Based on that argument, the Dave Ramsey Plan should be instructing people to purchase heavily overfunded Whole Life insurance in a way that it's either fully paid off or self sustaining in 10 years or less. No more life insurance bills to worry about. And peace of mind of having coverage that will never expire.
The main principal behind his plan is, without payments you can use your income to build wealth. Your idea is not only keep a big payment (mortgage), but also add another one.
Title: Re: Dave Ramsey Plan
Post by: Pad18 on July 23, 2020, 02:50:43 PM
Funny but I just finished the book this past week, and will start the "baby steps 3"

I am not an expert in investing at all, and unfortunately no money on the side for emergency or investing.

Things start to change !
Title: Re: Dave Ramsey Plan
Post by: yos9694 on July 23, 2020, 02:54:13 PM
Just want to add a couple of things to this:

WL can be a great vehicle in your fixed income investment basket. If you're only investing in equity then you might not see WL as a logical investment, but 100% equity exposure is not for most people.

A good WL policy is highly similar to a mortgage. Fixed payments with guaranteed equity build up. I can see why someone would choose to put extra money into WL rather than into paying down a mortgage.

The best reasons to not pay off a mortgage early are (wadr to DR)
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 23, 2020, 05:36:04 PM
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 23, 2020, 05:37:45 PM
"Whole life insurance is the payday loans of the middle class" DR
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 23, 2020, 05:38:20 PM
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 23, 2020, 05:38:42 PM
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 23, 2020, 05:39:19 PM
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 23, 2020, 05:43:51 PM
"Whole life insurance is the payday loans of the middle class" DR

Can you just give us the transcript or arguments?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 23, 2020, 06:19:02 PM
Can you just give us the transcript or arguments?
Remember this is the guy who said never use CC's but took a CC for his course.  ::)
Title: Re: Dave Ramsey Plan
Post by: gozalim on July 23, 2020, 06:22:30 PM
Remember this is the guy who said never use CC's but took a CC for his course.  ::)
He wanted to run it as a cash business, but then the 'big government' lefties came and insisted on taxable digitlal payment records
 :P
/s
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 23, 2020, 06:32:48 PM
Can you just give us the transcript or arguments?

In short, if you are buying it for insurance, you are paying too much, if you are buying for investment there are better investments.
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 23, 2020, 06:37:12 PM
Why is prepaying a mortgage a good thing with today's mortgage rates? Seems like a dumb thing to do, just take the excess money and invest it - all you need to make is more than ~4% (if not less).

Because you greatly reduced your risk of foreclosure when you don't have a mortgage.

Also, is the choice between paying off your mortgage vs investing, or paying off your mortgage vs buying a nicer car?
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 23, 2020, 06:39:05 PM
I don't think you want to be bantering about DR around these forums.

You'd be surprised
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 23, 2020, 06:40:22 PM
Remember this is the guy who said never use CC's but took a CC for his course.  ::)

I happened to go out to pick up a target order the other week, and DR was on the radio. It so happened that someone called to discuss life insurance with him, and he admitted that he has life insurance (IINM $2MM) but gave the excuse that it was only because his wife wanted it.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 23, 2020, 06:43:31 PM
Because you greatly reduced your risk of foreclosure when you don't have a mortgage.

IDK. Recent history has shown that having a large mortgage can sometimes work out well. I remember the person who I helped with a modification about a decade ago who was kicking himself and cursing for having paid down his mortgage.

DR himself would be the first to admit that paying down a mortgage doesn't make sense financially and mathematically. It's an emotional thing.

BTW. Some people are actually at greater risk due to the fact that they don't have the bank on top of them making the real estate tax payments. Falling behind on those can be very costly.
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 23, 2020, 06:48:44 PM
I happened to go out to pick up a target order the other week, and DR was on the radio. It so happened that someone called to discuss life insurance with him, and he admitted that he has life insurance (IINM $2MM) but gave the excuse that it was only because his wife wanted it.
Whole life insurance? Not a chance!
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 23, 2020, 06:51:07 PM
Whole life insurance? Not a chance!

He didn't say what kind he has. I don't know how old he or his wife are, nor at what age he might have purchased it.

Honestly, when one doesn't need insurance, it's beyond me why they would get term rather than a properly overfunded whole life. Reminds me of what I used to tell my wife when we were newlyweds and she would go shopping: spend as much as you want, but don't waste any.
Title: Re: Dave Ramsey Plan
Post by: moko on July 23, 2020, 07:00:16 PM
He didn't say what kind he has. I don't know how old he or his wife are, nor at what age he might have purchased it.

Honestly, when one doesn't need insurance, it's beyond me why they would get term rather than a properly overfunded whole life. Reminds me of what I used to tell my wife when we were newlyweds and she would go shopping: spend as much as you want, but don't waste any.
if you don't need insurance, why WL vs investing in S&P
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 23, 2020, 07:06:52 PM
if you don't need insurance, why WL vs investing in S&P

Why have an apple vs an orange?
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 23, 2020, 07:07:05 PM
IDK. Recent history has shown that having a large mortgage can sometimes work out well. I remember the person who I helped with a modification about a decade ago who was kicking himself and cursing for having paid down his mortgage.

DR himself would be the first to admit that paying down a mortgage doesn't make sense financially and mathematically. It's an emotional thing.

BTW. Some people are actually at greater risk due to the fact that they don't have the bank on top of them making the real estate tax payments. Falling behind on those can be very costly.
Care to elaborate on what happened?
"DR himself would be the first to admit..." you don't seem to familiar with the DRP.
Do you actually believe this? let me get this straight, so one who has paid down 500k aggressively over 15 years and has a paid for house, is in a worse financial position than one who has a mortgage?!
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 23, 2020, 07:12:12 PM
if you don't need insurance, why WL vs investing in S&P
Why have an apple vs an orange?
Not convinced. And I am your target audience.
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 23, 2020, 07:14:29 PM
I happened to go out to pick up a target order the other week, and DR was on the radio. It so happened that someone called to discuss life insurance with him, and he admitted that he has life insurance (IINM $2MM) but gave the excuse that it was only because his wife wanted it.
The attack you are responding to is based on the fact that the he set up a system to take card payments, and asked that people only use debit cards but didn't set up the system to reject Credit cards.

He has term life, and he has said many times that for him it's a waste of money. (A waste of money that he can well afford)
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 23, 2020, 07:14:59 PM
Honestly, when one doesn't need insurance, it's beyond me why they would get term rather than investing in retirement accounts and mutual funds.
FTFY
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 23, 2020, 07:17:26 PM
The attack you are responding to is based on the fact that the he set up a system to take card payments, and asked that people only use debit cards but didn't set up the system to reject Credit cards.

He has term life, and he has said many times that for him it's a waste of money. (A waste of money that he can well afford)

I am sure you are familiar with the "Stupid Tax" I would put this in the "SB Tax" column.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 23, 2020, 07:18:41 PM
Care to elaborate on what happened?
"DR himself would be the first to admit..." you don't seem to familiar with the DRP.
Do you actually believe this? let me get this straight, so one who has paid down 500k aggressively over 15 years and has a paid for house, is in a worse financial position than one who has a mortgage?!

By paying down the mortgage, all this person has done is convert a highly liquid and safe asset (cash) into a not so liquid and non-guaranteed asset (equity in a home). Said person earned a compound rate of return equal to the interest rate on the mortgage (around 3% in today's market), while possibly forgoing a tax deduction.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 23, 2020, 07:22:46 PM
I happened to go out to pick up a target order the other week, and DR was on the radio. It so happened that someone called to discuss life insurance with him, and he admitted that he has life insurance (IINM $2MM) but gave the excuse that it was only because his wife wanted it.
His wife made him take CC's to.  ;)
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 23, 2020, 07:28:15 PM
His wife made him take CC's to.  ;)

I know that on CB forums they consider this argument enough to reject everything Dave Ramsey says, but I think here we can have an honest discussion about the good and bad of his program.
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 23, 2020, 07:30:51 PM
By paying down the mortgage, all this person has done is convert a highly liquid and safe asset (cash) into a not so liquid and non-guaranteed asset (equity in a home). Said person earned a compound rate of return equal to the interest rate on the mortgage (around 3% in today's market), while possibly forgoing a tax deduction.

Do you recommend that people borrow against their home to invest (or to have "highly liquid and safe" cash)? If not, why?
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 23, 2020, 07:31:05 PM
Why have an apple vs an orange?

Not convinced. And I am your target audience.

A sound financial plan usually involves having a certain percentage in cash, cash equivalents, or other safe vehicles. If you understand how a properly designed overfunded whole life plan works, you would want that asset class for (at least a portion of) your safe money allocation.

But that's just one benefit of whole life, there are some other benefits that aren't available in any other financial product that I'm aware of (at least not in combination of those benefits).

Quote
investing in retirement accounts and mutual funds.
FTFY

Presumably you're talking about ROTH IRAs. And what does one do after the contributions were maxed? Or where does one put the safe money allocation of the portfolio?
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 23, 2020, 07:32:56 PM
Do you recommend that people borrow against their home to invest? If not, why?

I don't recommend that, and not only because it would get me into trouble, but because I believe it isn't appropriate for me to recommend any sort of borrowing to anyone.
Title: Re: Dave Ramsey Plan
Post by: moko on July 23, 2020, 07:39:05 PM
Why have an apple vs an orange?
isn't the single goal to make money conservatively? If I didn't care about taste and all I cared about was nutrition the I'd eat which ever was available and is healthier.
If the process of how you make the money is enjoyable, then I understand your question. Since I don't gamble and the process of generating savings isn't what's enjoyable to me, I don't understand your question.

Has an overfunded WL policy ever performed better than a given 40 yr period of the market?
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 23, 2020, 07:46:24 PM
2 general points about Dave Ramsey;

1 - His program is based on the idea that עבד לוה לאיש מלוה. In his view and for the many people who follow his program (myself included) the cost of debt (and not just the financial cost) is not worth it

2 - Much of his advice only makes sense as part of his whole program. For example, if someone is planning on continuing to borrow money, it doesn't make sense for them to go crazy to pay off all their debt as quickly as possible.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 23, 2020, 08:00:12 PM
isn't the single goal to make money conservatively? If I didn't care about taste and all I cared about was nutrition the I'd eat which ever was available and is healthier.
If the process of how you make the money is enjoyable, then I understand your question. Since I don't gamble and the process of generating savings isn't what's enjoyable to me, I don't understand your question.

Has an overfunded WL policy ever performed better than a given 40 yr period of the market?

Here's another question for you. What performed better over the past 40 years? The S&P 500 or constant maturity treasuries? By how much? What was the level of risk?

Hint: https://res.mdpi.com/d_attachment/data/data-04-00091/article_deploy/data-04-00091.pdf

But that's just me having some fun with facts.

Back to your actual question. Could you please clarify some terms, so we can make sure we're speaking the same language:
1. Making money.
2. Conservatively.
3. "Past 40 years" (are you picking specific dates? If yes, why those dates? What if actual dates when access to funds is different?
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 23, 2020, 08:07:32 PM

Not convinced. And I am your target audience.


A sound financial plan usually involves having a certain percentage in cash, cash equivalents, or other safe vehicles. If you understand how a properly designed overfunded whole life plan works, you would want that asset class for (at least a portion of) your safe money allocation.

But that's just one benefit of whole life, there are some other benefits that aren't available in any other financial product that I'm aware of (at least not in combination of those benefits).
FTFY


Presumably you're talking about ROTH IRAs. And what does one do after the contributions were maxed? Or where does one put the safe money allocation of the portfolio?
Baby step number 3.
Title: Re: Dave Ramsey Plan
Post by: moko on July 23, 2020, 08:11:43 PM
Here's another question for you. What performed better over the past 40 years? The S&P 500 or constant maturity treasuries? By how much? What was the level of risk?

Hint: https://res.mdpi.com/d_attachment/data/data-04-00091/article_deploy/data-04-00091.pdf

But that's just me having some fun with facts.

Back to your actual question. Could you please clarify some terms, so we can make sure we're speaking the same language:
1. Making money.
2. Conservatively.
3. "Past 40 years" (are you picking specific dates? If yes, why those dates? What if actual dates when access to funds is different?
1. Relative security in retirement
2. Whatever seems to consistently make the best return over....
3. ANY given 40 yr period (normal period of retirement savings- 25-65/30-70)
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 23, 2020, 08:23:58 PM
1. Relative security in retirement
2. Whatever seems to consistently make the best return over....
3. ANY given 40 yr period (normal period of retirement savings- 25-65/30-70)

Good thing I asked, because none of those correspond to my understanding/definition of the terms I sought clarification for.

I hope you do realize that you didn't answer my important questions in #3. I'm sure you do realize that there's a huge difference if said 40 year period ended at a bull market top or at a bear market bottom (or for that matter even close to those).
Title: Re: Dave Ramsey Plan
Post by: good sam on July 23, 2020, 08:25:42 PM
I don't recommend that, and not only because it would get me into trouble, but because I believe it isn't appropriate for me to recommend any sort of borrowing to anyone.
Lechatchila don't borrow but bidieved don't pay it down.

It's like the analysts who initiate coverage at Hold. What did you teach me?

Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 23, 2020, 08:26:41 PM
I'm sure you do realize that there's a huge difference if said 40 year period ended at a bull market top or at a bear market bottom (or for that matter even close to those).

He said "any given 40 year period"
Title: Re: Dave Ramsey Plan
Post by: moko on July 23, 2020, 08:30:46 PM
He said "any given 40 year period"
I was starting to feel stupid
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 23, 2020, 08:31:49 PM
I know that on CB forums they consider this argument enough to reject everything Dave Ramsey says, but I think here we can have an honest discussion about the good and bad of his program.
Totally unfair. They tear him apart piece by piece.
They teach individuals to repair their credit and what rights they have for free.
I spent many years on that forum. My original impression was the forum was for deadbeats. I was 100% wrong.
Title: Re: Dave Ramsey Plan
Post by: YoelFried on July 23, 2020, 08:37:33 PM
"Don't take financial advice from broke people", Dave ramsey.

For all those that say that leverage is good, please post your net worth.

Net worth is calculated Assets minus liabilities.

Lines of credit or not assets.......
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 23, 2020, 08:41:26 PM
He said "any given 40 year period"

I assume you do realize that a 40 year period that ended 3/9/2009 is very different than a 40 year period that ended 1/9/2020

Are you also ignoring the psychology of a serious drawdown a year or two prior to retirement?
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 23, 2020, 08:41:38 PM
Totally unfair. They tear him apart piece by piece.

Then please bring up those points so that we can discuss them. I went there to look (when you sent me there last time we had this discussion) and the impression that I got was that people there felt that there was no need to address his arguments, because "he used to accept credit cards".

As to CB in general, I have nothing against them. Other than the Dave Ramsey threads, I've barely read anything there .
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 23, 2020, 08:43:11 PM
I assume you do realize that a 40 year period that ended 3/9/2009 is very different than a 40 year period that ended 1/9/2020

Yes, which is why it should be very easy for you to respond to him.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 23, 2020, 08:45:10 PM
Yes, which is why it should be very easy for you to respond to him.

I hope you do realize that I am Jewish. I respond with questions.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 23, 2020, 08:45:47 PM
Then please bring up those points so that we can discuss them. I went there to look (when you sent me there last time we had this discussion) and the impression that I got was that people there felt that there was no need to address his arguments, because "he used to accept credit cards".

As to CB in general, I have nothing against them. Other than the Dave Ramsey threads, I've barely read anything there .
AFAIK they don't talk about him anymore since their point of him being a conman is well known.
One thing I remember is saying pay off your lowest CC balance first no matter the interest rate charged on your cards. Is that correct?
Title: Re: Dave Ramsey Plan
Post by: YoelFried on July 23, 2020, 08:47:35 PM
When the market crashes after 40 years as you use in your example, the investment for have grown nice. Even you would cash out a small percentage for a living and leave the most possible than it would recover within the next few years plus even more. As we have seen in 2000, 2008 and probably 2020 as well.
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 23, 2020, 08:51:27 PM
"Don't take financial advice from broke people", Dave ramsey.

For all those that say that leverage is good, please post your net worth.

Net worth is calculated Assets minus liabilities.

Lines of credit or not assets.......
I don't ask for weight loss advice from overweight people.
Title: Re: Dave Ramsey Plan
Post by: moko on July 23, 2020, 08:51:56 PM
I hope you do realize that I am Jewish. I respond with questions.
but we've already responded to your questions question.
Now please, answer with a different question. Not the same one again.
Also, the question has to be an answer. Not just a random question
Title: Re: Dave Ramsey Plan
Post by: moko on July 23, 2020, 08:52:32 PM
I don't ask for weight loss advice from overweight people.
that's probably sound advice unless you want to know what not to do.
Title: Re: Dave Ramsey Plan
Post by: farmbochur on July 23, 2020, 08:55:16 PM
Other listeners of Dave can correct me but I believe that these responses are consistent with his philosophy.


A sound financial plan usually involves having a certain percentage in cash, cash equivalents, or other safe vehicles. If you understand how a properly designed overfunded whole life plan works, you would want that asset class for (at least a portion of) your safe money allocation.
Dave's plan calls for having a liquid emergency fund of 3-6 months expenses prior to prepaying the mortgage.



Presumably you're talking about ROTH IRAs. And what does one do after the contributions were maxed?
I've heard Dave advocate for any of the following: (1) Non-qualified brokerage account invested in actively managed mutual funds, (2) real estate, or (3) small business.

Or where does one put the safe money allocation of the portfolio?
Dave would say that it doesn't matter because it's a small percentage of your net worth.
Title: Re: Dave Ramsey Plan
Post by: moko on July 23, 2020, 08:59:06 PM
Other listeners of Dave can correct me but I believe that these responses are consistent with his philosophy.
Dave's plan calls for having a liquid emergency fund of 3-6 months expenses prior to prepaying the mortgage.


I've heard Dave advocate for any of the following: (1) Non-qualified brokerage account invested in actively managed mutual funds, (2) real estate, or (3) small business.
Dave would say that it doesn't matter because it's a small percentage of your net worth.
let's stop talking about DR and actually discuss the issues.
(Of course, it's the DR thread) :)
Title: Re: Dave Ramsey Plan
Post by: farmbochur on July 23, 2020, 09:02:14 PM
Lol, my point was to address ex-gingi's issues. It's not like DR recommends emptying the checking account just to prepay the mortgage. It's only done if one is already sitting on a decent cash cushion.
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 23, 2020, 09:24:21 PM
When the market crashes after 40 years as you use in your example, the investment for have grown nice. Even you would cash out a small percentage for a living and leave the most possible than it would recover within the next few years plus even more. As we have seen in 2000, 2008 and probably 2020 as well.
2020 fully recovered.
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 23, 2020, 09:26:47 PM
Other listeners of Dave can correct me but I believe that these responses are consistent with his philosophy.
Dave's plan calls for having a liquid emergency fund of 3-6 months expenses prior to prepaying the mortgage.

Baby step number 3.
Title: Re: Dave Ramsey Plan
Post by: whYME on July 23, 2020, 09:36:17 PM
One thing I remember is saying pay off your lowest CC balance first no matter the interest rate charged on your cards. Is that correct?
One of the themes of his program is that for the vast majority of people the psychological aspect is far more important than the savings offered by the mathematically best option.
i.e. his claim is that from what he's seen over the course of the years is that people are far more likely to stick with it when they start seeing the wins right away and get accounts paid off. So even though mathematically paying off higher interest first is better, if people don't follow through and drop out because  they feel they're not seeing results, יצא שכרו בהפסדו (https://www.proz.com/kudoz/hebrew-to-english/art-literary/467553-%D7%99%D7%A6%D7%90-%D7%A9%D7%9B%D7%A8%D7%95-%D7%91%D7%94%D7%A4%D7%A1%D7%93%D7%95.html)
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 23, 2020, 10:04:51 PM
You'd be surprised
Agreed. Thank G'd DRP is really picking up steam in the frum community, "Living within one's means" and "Spending less than one earns" shouldn't be so controversial.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 23, 2020, 10:20:58 PM
"Living within one's means" and "Spending less than one earns" shouldn't be so controversial.
FTFY

+1000000000000
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 23, 2020, 11:42:12 PM
AFAIK they don't talk about him anymore since their point of him being a conman is well known.
I searched and didn't find anything to indicate why they believe he is a conman other than that accepting CC issue.

One thing I remember is saying pay off your lowest CC balance first no matter the interest rate charged on your cards. Is that correct?
Indeed. This fits into my point that his advice has to be taking as part of the big picture of his program. If your goal is to get rid of all debt, then the psychological benefits of the debt snowball are worth more than the saving that you'd get from paying the highest interest debts first.

There have been studies done that show this method to be more effective (in getting rid of debt).
Title: Re: Dave Ramsey Plan
Post by: Mordyk on July 23, 2020, 11:50:13 PM
Whole life insurance? Not a chance!
Yes i heard the podcast.  His wife wants a lump sum payout when he dies. And he said he did it as a gift. But he still argues with her about it.  He said it as a disclaimer.

You can go ahead and called it BS, but he had no reason to mention it.
Title: Re: Dave Ramsey Plan
Post by: thaber on July 24, 2020, 03:37:11 AM
This is silly. OP was just saying that people should live within their means and he gives a good framework for that.
For the more sophisticated people, you can ignore the mortgage advice.
For those confident they'll never carry a balance they can ignore the credit card advice. (one of the most responsible people I know had one bad month that ended up being a 60k credit card debt).
For those who sell insurance, they can tell everyone to ignore the life insurance advice.
For those who think he's a conman, don't have a beer with him.
But the hashkafa and attitude toward money in general is very sound, and the mehalech helps a lot of people to can't get themselves out of debt.
Title: Re: Dave Ramsey Plan
Post by: 12HRS on July 24, 2020, 03:40:21 AM
I assume you do realize that a 40 year period that ended 3/9/2009 is very different than a 40 year period that ended 1/9/2020

Are you also ignoring the psychology of a serious drawdown a year or two prior to retirement?

what percent of families in our circles go into retirement with a mortgage still over their head?
Title: Re: Dave Ramsey Plan
Post by: avromie7 on July 24, 2020, 09:31:10 AM
what percent of families in our circles go into retirement with a mortgage still over their head?
I don't want to be making weddings while still paying a mortgage too.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 24, 2020, 09:53:02 AM
I don't want to be making weddings while still paying a mortgage too.

Do you realize that for many people the Taxes and Insurance portion of their mortgage payment is a very significant part that never goes away?
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 09:53:52 AM
what percent of families in our circles go into retirement with a mortgage still over their head?
I don't want to be making weddings while still paying a mortgage too.
What percent take a cash out refi to pay for the wedding that their wife thinks is within their means?
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 09:55:44 AM
I don't want to be making weddings while still paying a mortgage too.
why not? For anyone who buys a house with a 6year old daughter that can be very difficult.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 09:57:55 AM
Indeed. This fits into my point that his advice has to be taking as part of the big picture of his program. If your goal is to get rid of all debt, then the psychological benefits of the debt snowball are worth more than the saving that you'd get from paying the highest interest debts first.

There have been studies done that show this method to be more effective (in getting rid of debt).
Then the person needs a psychologist not a fake financial advisor.
Do you pay off your small balance first before your high interest balances?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 09:59:55 AM
For those who think he's a conman, don't have a beer with him.
I would love to have a beer with him.  :)
Title: Re: Dave Ramsey Plan
Post by: Mordyk on July 24, 2020, 10:08:56 AM
Then the person needs a psychologist not a fake financial advisor.
Do you pay off your small balance first before your high interest balances?
Why psychologist?  The brain has a way of working. Same way when you start a business and its making a little money and you get encouraged that its growing.  This gives strength to continue.   When paying debt if you see debts going away it also gives courage to continue further.  Obviously from a $ standpoint the higher interests should get paid first.  But its not worth if you do it for a short while and get discouraged
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 10:20:10 AM
Why psychologist?  The brain has a way of working. Same way when you start a business and its making a little money and you get encouraged that its growing.  This gives strength to continue.   When paying debt if you see debts going away it also gives courage to continue further.  Obviously from a $ standpoint the higher interests should get paid first.  But its not worth if you do it for a short while and get discouraged
Look we can go back and forth all day. Most successful people will tell you it is their failures that made them stronger.
You teach people the right way. The reason he is so successful is he preys on an individuals weakness.

So let me ask the question. For all those that paid money for his course do you pay your smaller balances first instead of your high interest balances first? It is a straight forward simple question.
Title: Re: Dave Ramsey Plan
Post by: 12HRS on July 24, 2020, 10:27:49 AM
Look we can go back and forth all day. Most successful people will tell you it is their failures that made them stronger.
You teach people the right way. The reason he is so successful is he preys on an individuals weakness.

He did a scientific study recently of 10000 millionaires in the country, you can find the data on this but the majority of millionaires in the country pay off their home in 10.2(iirc) years. It may be a weakness to need to see results to motivate you to keep you going but its also pretty normal.

So let me ask the question. For all those that paid money for his course do you pay your smaller balances first instead of your high interest balances first? It is a straight forward simple question.

If you are in debt and following his plan the answer is yes.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 10:38:55 AM
He did a scientific study recently of 10000 millionaires in the country, you can find the data on this but the majority of millionaires in the country pay off their home in 10.2(iirc) years. It may be a weakness to need to see results to motivate you to keep you going but its also pretty normal.
I paid off my home several times and is currently paid off. Might borrow against it again. It has nothing to do with motivation but sound finacial planning.
If you are in debt and following his plan the answer is yes.
That was not the question. Some here have bought his plan. I am asking them what they do.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 10:46:56 AM
Look we can go back and forth all day. Most successful people will tell you it is their failures that made them stronger.
You teach people the right way. The reason he is so successful is he preys on an individuals weakness.

So let me ask the question. For all those that paid money for his course do you pay your smaller balances first instead of your high interest balances first? It is a straight forward simple question.

If his charisma or the psychology behind his plan or something else is succesful in getting people out of bad debt then why would that be anything but a good thing?
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 10:47:35 AM
Then the person needs a psychologist not a fake financial advisor.


A behavioral economist? @ExGingi
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 24, 2020, 10:49:24 AM
Then the person needs a psychologist not a fake financial advisor.
Do you pay off your small balance first before your high interest balances?

How about if paying off the small balance pushes up the credit score, enabling a new card with a 0% balance transfer to pay off the high interest card?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 10:54:57 AM
If his charisma or the psychology behind his plan or something else is succesful in getting people out of bad debt then why would that be anything but a good thing?
We have no idea how many it has helped or not. Financially we know some of his advice is dead wrong.
Also there is better advice for free. Now if the person doesn't have the willpower then that needs to be addressed first.

I am still waiting for a simple answer to my question from those who purchased his course.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 10:55:31 AM
How about if paying off the small balance pushes up the credit score, enabling a new card with a 0% balance transfer to pay off the high interest card?
Wait, he is recommending that?  :)
Title: Re: Dave Ramsey Plan
Post by: 12HRS on July 24, 2020, 11:05:11 AM
We have no idea how many it has helped or not. Financially we know some of his advice is dead wrong.
Also there is better advice for free. Now if the person doesn't have the willpower then that needs to be addressed first.

I am still waiting for a simple answer to my question from those who purchased his course.

His advice is free. If you want more handholding you can pay for it
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 11:09:22 AM
We have no idea how many it has helped or not.
This is really all that matters. The rest is small stuff.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 11:09:30 AM
His advice is free. If you want more handholding you can pay for it
If it is more bad advice, no thank you!  ;)
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 11:12:17 AM
His program is a psychological one.
Oops a thought he was selling it as financial advice. He has a degree in psychology?
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 11:16:56 AM
Oops a thought he was selling it as financial advice. He has a degree in psychology?
Who cares.
A behavioral economist? @ExGingi
All that really matters is whether or not it works and not any of these other side shows. Especially not whether it is hypocritical of him to be accepting CCs.
Title: Re: Dave Ramsey Plan
Post by: moko on July 24, 2020, 11:29:29 AM
I still haven't received an answer from our resident experts to the WL vs Term + S&P mutual funds question.
My uneducated research shows that if I invest 10k annually at an overall 8% rate of return annually (very conservative- over ANY given 40 yr period) will be almost 3mil after 40 yrs.
If my 30 term cost $1500 monthly (total $540,000) and my total 40 yr principal is $480,000, then I've invested a total of approx 1mil for a return of approx 3mil + 1mil life insurance peace of mind.
How much would that cost me in WL?
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 11:44:04 AM

My uneducated research shows that if I invest 10k annually at an overall 8% rate of return annually (very conservative- over ANY given 40 yr period) will be almost 3mil after 40 yrs.


https://dqydj.com/sp-500-historical-return-calculator/ (https://dqydj.com/sp-500-historical-return-calculator/)



S&P 500 Historical Return Results
Data from Rolling Periods Between:  -  [Link (http://www.econ.yale.edu/~shiller/data.htm)] Using Inflation (CPI) Adjustment: false Calculating Dividend Reinvestment: true Monthly Realized Historical Volatility: 14.107% Annual Realized Historical Volatility: 18.479% All returns are annualized to make them comparable - note the effect this has on apparent returns for shorter time periods.  Volatility is annualized, without inflation, and without dividends.
Summary Statistics Over Period(s)
Length of Investment:40 Years30 Years20 Years10 Years
[/c][/t]
Average Return9.406 %9.436 %9.246 %9.218 %
Median Return9.971 %9.880 %8.041 %8.533 %
Maximum Return13.183 %14.319 %17.948 %21.172 %
Minimum Return4.900 %3.635 %2.048 %-4.021 %
Standard Deviation1.952 %2.210 %3.258 %5.009 %
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 11:46:14 AM

If my 30 term cost $1500 monthly (total $540,000) and my total 40 yr principal is $480,000, then I've invested a total of approx 1mil for a return of approx 3mil + 1mil life insurance peace of mind.
How much would that cost me in WL?


I don't think that you are understanding his strategy of "overfunded WL"
Title: Re: Dave Ramsey Plan
Post by: moko on July 24, 2020, 12:02:37 PM
I don't think that you are understanding his strategy of "overfunded WL"
clearly not. I've been asking for answers for a while and only getting seemingly unrelated questions in response
Title: Re: Dave Ramsey Plan
Post by: Mordyk on July 24, 2020, 12:07:11 PM
We have no idea how many it has helped or not. Financially we know some of his advice is dead wrong.
Also there is better advice for free. Now if the person doesn't have the willpower then that needs to be addressed first.

I am still waiting for a simple answer to my question from those who purchased his course.
i purchased it once.

yes i paid off smaller balances first. this helped me feel like progress is being made. and i did make progress. 
a lot about being part of a financial program is being intentional with your money(DR's words)   i have started knowing where every dollar goes because its on my head constantly. B"h I'm in a way better place financially but still listen to him because when you constantly think about how can i be perfect with money, you are more intentional. no more how is my account empty for the month etc.


many people can see they are intentional with every dollar monthly, but only a small percentage actually are.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 24, 2020, 12:12:07 PM
If his charisma or the psychology behind his plan or something else is succesful in getting people out of bad debt then why would that be anything but a good thing?

+1000000

While there are definitely things I find wrong with what I hear from Dave Ramsey, there are definitely good things about his preaching, and above all - it is a plan to work with.

I often tell people I meet, when you have a goal you might reach it or you might not, but if you don't even have a defined goal, much less so any plan of action, what are your chances of getting anywhere good?

Any plan with consistency (and coaching definitely helps) is better than no plan and direction. This can be seen in many aspects of life. Are we lacking weight loss plans that might not have any scientific basis (fit for life, for example) but work for people just because they create a certain discipline?

What might make tremendous sense and work for people who understand certain things AND have discipline and drive, might not work for someone who might be lacking in any of those components. I meet with many people, some are my clients (in various areas that I serve) and some aren't, and I can probably have a story to tell you about every type of personality that might exist when it comes to finances.

A huge problem exists with people who are bright enough to understand concepts, but only have cursory knowledge and no experience, and definitely aren't willing to dedicate the time and effort to do the work required for what they understand to be best for them, yet can't appreciate fairly paying someone to do said work (whether in commissions or fees) or to choose an alternative that might not require that much time and effort and might sound less lucrative (potentially).

I have a fresh story from this week of a person who met me to review his options after being laid off. This person, despite being less than a decade away from being eligible for social security retirement benefits, has a grand total of $0 in any retirement savings. Some other savings that he's not really sure about in a local bank account (taxable - for crying out loud, I told him to take that money and put it immediately in ROTH IRAs for himself and his wife, even if he left it at the same bank with the same minuscule interest rate, at least they wouldn't be taxed on it, and given his age he could withdraw anytime penalty-free). There are additional sad details to his story, but one thing I did realize was that this person never got proper guidance, he just survived through life, whether when he was in business for himself or an employee, and never took the time to review and plan.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 12:14:53 PM
clearly not. I've been asking for answers for a while and only getting seemingly unrelated questions in response
The basic idea of it is to fund more than the minimum premium and have the cash value of the account pay future premiums after a certain point.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 12:16:49 PM
Especially not whether it is hypocritical of him to be accepting CCs.
This shows who he really is.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 12:20:56 PM
+1000000

While there are definitely things I find wrong with what I hear from Dave Ramsey, there are definitely good things about his preaching, and above all - it is a plan to work with.

I often tell people I meet, when you have a goal you might reach it or you might not, but if you don't even have a defined goal, much less so any plan of action, what are your chances of getting anywhere good?

Any plan with consistency (and coaching definitely helps) is better than no plan and direction. This can be seen in many aspects of life. Are we lacking weight loss plans that might not have any scientific basis (fit for life, for example) but work for people just because they create a certain discipline?

What might make tremendous sense and work for people who understand certain things AND have discipline and drive, might not work for someone who might be lacking in any of those components. I meet with many people, some are my clients (in various areas that I serve) and some aren't, and I can probably have a story to tell you about every type of personality that might exist when it comes to finances.

A huge problem exists with people who are bright enough to understand concepts, but only have cursory knowledge and no experience, and definitely aren't willing to dedicate the time and effort to do the work required for what they understand to be best for them, yet can't appreciate fairly paying someone to do said work (whether in commissions or fees) or to choose an alternative that might not require that much time and effort and might sound less lucrative (potentially).

I have a fresh story from this week of a person who met me to review his options after being laid off. This person, despite being less than a decade away from being eligible for social security retirement benefits, has a grand total of $0 in any retirement savings. Some other savings that he's not really sure about in a local bank account (taxable - for crying out loud, I told him to take that money and put it immediately in ROTH IRAs for himself and his wife, even if he left it at the same bank with the same minuscule interest rate, at least they wouldn't be taxed on it, and given his age he could withdraw anytime penalty-free). There are additional sad details to his story, but one thing I did realize was that this person never got proper guidance, he just survived through life, whether when he was in business for himself or an employee, and never took the time to review and plan.

Even for someone with low income and on entitlement programs can have a tremendous benefit in contributing to retirement plans in that it can help them overcome the benefit trap when they lose benefits while not getting enough income to compensate. By contributing properly (keyword) to a retirement plan that can bring the income down enough to keep the benefits while still receiving the growth in the job or business they are starting and to then start keeping it if needed in a future year when they already are making more.

HT: @avromie7
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 12:22:19 PM
This shows who he really is.
The idea that this matters to someone who can successfully use his plan to get out of bad debt is ludicrous yet fits with other opinions you have expressed here.
Title: Re: Dave Ramsey Plan
Post by: moko on July 24, 2020, 12:23:36 PM
The basic idea of it is to fund more than the minimum premium and have the cash value of the account pay future premiums after a certain point.
Bott line, am I better off financially with an overfunded WL or pay term and use the excess to by very conservative mutual funds
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 12:25:05 PM

Any plan with consistency (and coaching definitely helps) is better than no plan and direction. This can be seen in many aspects of life. Are we lacking weight loss plans that might not have any scientific basis (fit for life, for example) but work for people just because they create a certain discipline?


I once discussed a certain chazara program with Rav Meir Stern SHLITA who told me that what the program is doesn't matter as much as that you have a real program in place to continuously do chazara and if that plan is what gets me to do it then it is all that really matters and then I can tweak it to what works for me.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 12:25:49 PM
Bott line, am I better off financially with an overfunded WL or pay term and use the excess to by very conservative mutual funds

That depends on many factors including tax planning. Like almost everything in life it is good for the right person in the right situation.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 12:28:39 PM
The idea that this matters to someone who can successfully use his plan to get out of bad debt is ludicrous yet fits with other opinions you have expressed here.
Helping someone get out of debt does not make it a good plan. I can teach most people in debt how to get out MSing. That doesn't make it a good plan. According to your logic that is all that matters. Terrible logic.
Title: Re: Dave Ramsey Plan
Post by: gozalim on July 24, 2020, 12:29:54 PM
Even for someone with low income and on entitlement programs can have a tremendous benefit in contributing to retirement plans in that it can help them overcome the benefit trap when they lose benefits while not getting enough income to compensate. By contributing properly (keyword) to a retirement plan that can bring the income down enough to keep the benefits while still receiving the growth in the job or business they are starting and to then start keeping it if needed in a future year when they already are making more.

HT: @avromie7
in this direction :
The 'easy' part of the solution is to contribute surplus (up to 11k) to an IRA up until a quarter into next year.

In theory 401k has higher limits (but needs to be set up in advance). For an employer that doesn't have one set up, how complicated is it to do a 'self' 401k?
(and are the rules for those withdrawals more restrictive)?
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 24, 2020, 12:30:43 PM
clearly not. I've been asking for answers for a while and only getting seemingly unrelated questions in response

So without actually reading this link, but trusting it's source, as I have read a few of their posts and they seem right and accurate, you might want to start here: https://theinsuranceproblog.com/overfunded-life-insurance/

But before you even go there, I think it's important that you (not referring to you specifically) acknowledge some other things that you might not have a full grasp of. Because while knowledge is valuable, a little bit of knowledge might be dangerous.

I highly recommend reading https://www.mauldineconomics.com/images/uploads/pdf/mwo041406.pdf as a primer. I've mentioned this article several times, and it has been reprinted and republished in many places (I even got permission to reprint and distribute it myself). Read it, read it again, and make sure you understand it clearly.

And after reading that, we should revisit some terms, definitions and assumptions.

And even before we go into understanding the details of the table of rolling returns that @aygart posted, I'm sure you do realize that even when assuming a certain average annualized return, you do realize that there could be major swings along the way, and you have no way to control those swings, nor do you have a way to control the timing of what life throws at you (for good or bad). So while you might see articles like this (https://www.thebalance.com/why-average-investors-earn-below-average-market-returns-2388519) or like this (https://www.forbes.com/sites/advisor/2014/04/24/why-the-average-investors-investment-return-is-so-low/#95606f0111a3) telling you not to sell when investments are down, those articles acknowledge that most people won't necessarily act that way at all times, and I will add that at certain times they might not be able to act that way, for the simple reason that they didn't have enough of a risk-free cushion as part of their overall portfolio or wealth.

Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 24, 2020, 12:37:42 PM
in this direction :
The 'easy' part of the solution is to contribute surplus (up to 11k) to an IRA up until a quarter into next year.

In theory 401k has higher limits (but needs to be set up in advance). For an employer that doesn't have one set up, how complicated is it to do a 'self' 401k?
(and are the rules for those withdrawals more restrictive)?

I have had a "solo 401k" in the past. Costs were quite low. Obviously you have to have the right business setup for it. If there are employees, then it's a different ballgame, and costs are higher. You need some critical mass in order to justify (but for some small employers working with a PEO can help, offering large company style benefits, sometimes even with a 401k).

The advantages of it were that I was in full control of it, including the investments, one of the disadvantages compared to a large employer 401k was the lack of certain investment options (especially on the cash, risk-free end). This was totally unanticipated, but the CARES ACT created huge flexibility and opportunity with my 401k balances (not solo - at a large company).
Title: Re: Dave Ramsey Plan
Post by: moko on July 24, 2020, 12:37:54 PM
That depends on many factors including tax planning. Like almost everything in life it is good for the right person in the right situation.
can you or @ExGingi  give 3 examples besides tax  planning that's it would be a better alternative to what I described?
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 12:40:19 PM
Helping someone get out of debt does not make it a good plan. I can teach most people in debt how to get out MSing. That doesn't make it a good plan. According to your logic that is all that matters. Terrible logic.
What makes it a good plan is if it works.
Title: Re: Dave Ramsey Plan
Post by: avromie7 on July 24, 2020, 12:50:45 PM
Even for someone with low income and on entitlement programs can have a tremendous benefit in contributing to retirement plans in that it can help them overcome the benefit trap when they lose benefits while not getting enough income to compensate. By contributing properly (keyword) to a retirement plan that can bring the income down enough to keep the benefits while still receiving the growth in the job or business they are starting and to then start keeping it if needed in a future year when they already are making more.

HT: @avromie7
This is something that bothers me terribly every time I hear about someone who refused a raise because they'd lose their programs.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 24, 2020, 12:53:26 PM
can you or @ExGingi  give 3 examples besides tax  planning that's it would be a better alternative to what I described?

I can give you one reason (not that there aren't other reasons, but I think this one is strong and stands on its own merits):

A wealth accumulation plan founded on overfunded whole life will work. The numbers WILL BE DIFFERENT than what's shown on the illustration, but the concept will work similarly to what is shown on the illustration. It will be a sound plan that won't depend on the timing of events beyond your control. Additionally, it will be protected from certain catastrophic events beyond your control, such as death (and for many people that add the riders - disability, and in more recent years, even riders that provide for long-term care). In any given year, once you have a certain value accumulated, the future values are guaranteed to be higher. And I can only tell you by looking at my own Whole Life plans, that the cash over cash annual growth is in excess of 4%, while I'm able to get a line of credit and borrow against it at 3.25% (or 3%) because the banks know that there's no way they can lose money on this.

On the other hand, BTID (buy term and invest the difference) as you describe, especially if talking over a 40 year period, could work spectacularly, but could also fail (and by fail, I don't mean underperform from expectations that might have been set too high, I mean actually ending up without enough money to pay for life expenses). You seem to be harping on investing at the S&P500 (which sounds great as to passive investing) but other testimony I have heard seems to indicate that Dave Ramsey actually advocates active management. You are also asking to use a 40 year period, ignoring the fact that 40 year term insurance is either non-existant, rare (i.e. other products could be structured to work that way), or would have significant rising costs (or would require repeated underwriting, that might be challenging as we get further along in life).

BTW, for myself, I buy Whole Life, Term, and various investments. I used to also own a VUL which I bought when I was much younger, thought I was very smart and understood everything better. While that policy did serve it's good purpose for several years (possibly not at the most optimal cost) I have intentinally let that policy lapse a few years ago after analyzing it and deciding that it doesn't fit into my overall financial picture. And as @Mordyk mentioned, the important thing about this and many other financial decisions is, that this was an intentional decision.
Title: Re: Dave Ramsey Plan
Post by: avromie7 on July 24, 2020, 12:56:59 PM
in this direction :
The 'easy' part of the solution is to contribute surplus (up to 11k) to an IRA up until a quarter into next year.

In theory 401k has higher limits (but needs to be set up in advance). For an employer that doesn't have one set up, how complicated is it to do a 'self' 401k?
(and are the rules for those withdrawals more restrictive)?
IRA limit increased to 6k, or 12k per couple.

Many people in this situation have access to a 401k, with a contribution limit of 19.5k. You can lower income by up to 31.5k, that should be more than enough to get off of programs.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 24, 2020, 01:02:32 PM
IRA limit increased to 6k, or 12k per couple.
Correct. Though once you reach a certain age, it's up to 7k.

Many people in this situation have access to a 401k, with a contribution limit of 19.5k. You can lower income by up to 31.5k, that should be more than enough to get off of programs.
You probably meant to say "stay on the programs" rather than "get off of programs". Because that's a huge differentiator that most financial planning and advice doesn't address.

In NY qualifying for Medicaid or Essential Plan is huge. If a person also qualifies for childcare vouchers, that enormous. Section 8 (or other subsidized housing) I don't even know how much (nor do I know if a 401k might disqualify one or significantly reduce the subsidy).

All of that being said, accumulating too large of a balance in a pre-tax retirement account can create other problems down the road, as moving money out of the plan is a taxable event (taxed at ordinary income rates, and a penalty if dones too early).
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 01:04:40 PM
What makes it a good plan is if it works.
This is very short sited. By your logic even if it was illegal as long as it works makes it a good plan.  ::)
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 01:30:08 PM
This is very short sited. By your logic even if it was illegal as long as it works makes it a good plan.  ::)

It is short-sighted to ignore a plan which would work because of some hypocrisy of its creator to make his plan profitable. The same goes for whether the minutia is the exact best financial advice. That is like saying that nobody should use any navigation system since they don't get you there with the best route. 99% of the time the route will be a lot better than getting lost.

The risk involved is a big factor in deciding what works. That you are making this illogical straw-man argument is in itself a great illustration of the folly of your position.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 01:33:00 PM
but other testimony I have heard seems to indicate that Dave Ramsey actually advocates active management.
Considering that this is a service he offers, that would make sense. I have given similar advice to someone and told him that if having an advisor to speak to is what will get you to actually fund the investment then it is a price well worth the cost.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 01:35:07 PM
It is short-sighted to ignore a plan which would work because of some hypocrisy of its creator to make his plan profitable. The same goes for whether the minutia is the exact best financial advice. That is like saying that nobody should use any navigation system since they don't get you there with the best route. 99% of the time the route will be a lot better than getting lost.

The risk involved is a big factor in deciding what works. That you are making this illogical straw-man argument is in itself a great illustration of the folly of your position.
Nice deflection when your own logic is used to show how wrong it is.
Your responses of "who cares" "it doesn't matter" speaks volumes.
No reasonable person would judge a plan based on only if it worked or not but that has been your response.
I am ignoring the plan because it is flawed. I am also ignoring the plan because it is put out by a conman.   
Title: Re: Dave Ramsey Plan
Post by: avromie7 on July 24, 2020, 01:41:25 PM
Correct. Though once you reach a certain age, it's up to 7k.
You probably meant to say "stay on the programs" rather than "get off of programs". Because that's a huge differentiator that most financial planning and advice doesn't address.

In NY qualifying for Medicaid or Essential Plan is huge. If a person also qualifies for childcare vouchers, that enormous. Section 8 (or other subsidized housing) I don't even know how much (nor do I know if a 401k might disqualify one or significantly reduce the subsidy).

All of that being said, accumulating too large of a balance in a pre-tax retirement account can create other problems down the road, as moving money out of the plan is a taxable event (taxed at ordinary income rates, and a penalty if dones too early).
The goal is to be able to live without programs without ever being in the sweet (sour) spot where every dollar in income results in more than $1 lost in programs.

For someone making the perfect amount of money to maximize programs they still pay 7.65% FICA and lose:
EITC 21.06%
Food Stamps 30%
Section 8 33%
This is already over 90% of the additional income, I may have missed some and this doesn't include other smaller programs like LI-HEAP. By the time you get done you're literally coming home with less money, the goal of putting it into a 401k or IRA is to launch you to the point where you are ineligible for at least some of the programs so you no longer lose more than you make.

The ramifications down the road will be significantly smaller even for someone who never gets off programs because they receive less from programs by the time they reach 70 1/2. For example EITC is tiny without eligible children.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 01:43:18 PM
Nice deflection when your own logic is used to show how wrong it is.
Your responses of "who cares" "it doesn't matter" speaks volumes.
No reasonable person would judge a plan based on only if it worked or not but that has been your response.
I am ignoring the plan because it is flawed. I am also ignoring the plan because it is put out by a conman.   

Who said only?

"Don't let perfection be the enemy of good"

If it works it is good. If you can direct someone to something better then great! There is no benefit in ignoring something that works because it is flawed. Just perfect it!
That you will ignore based on ad hominem fits you.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 01:45:33 PM
Who said only?
You did!!!  ::)
This is really all that matters.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 01:51:56 PM
You did!!!  ::)
Only if you consider weighing the risks to be a deflection and not an integral part of figuring out whether or not it works. Being debt free in jail is not considered working.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 01:54:32 PM
Only if you consider weighing the risks to be a deflection and not an integral part of figuring out whether or not it works. Being debt free in jail is not considered working.
Blah blah blah!!!
Stop the non-sense. You asked who said it and I showed it was you. I know it is Friday but I don't need your pretzels.
Claim you misspoke or something and move on.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 01:56:54 PM
Blah blah blah!!!
Stop the non-sense. You asked who said it and I showed it was you. I know it is Friday but I don't need your pretzels.
Claim you misspoke or something and move on.
If you want to call it mispoke then so be it. mY intent is very clear while you have done little but harp on nonsense.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 01:59:22 PM
The goal is to be able to live without programs without ever being in the sweet (sour) spot where every dollar in income results in more than $1 lost in programs.

For someone making the perfect amount of money to maximize programs they still pay 7.65% FICA and lose:
EITC 21.06%
Food Stamps 30%
Section 8 33%
This is already over 90% of the additional income, I may have missed some and this doesn't include other smaller programs like LI-HEAP. By the time you get done you're literally coming home with less money, the goal of putting it into a 401k or IRA is to launch you to the point where you are ineligible for at least some of the programs so you no longer lose more than you make.

The ramifications down the road will be significantly smaller even for someone who never gets off programs because they receive less from programs by the time they reach 70 1/2. For example EITC is tiny without eligible children.
You left out losing the Cadilac of heath insurance. the child care benefit mentioned by @ExGingi may be location based.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 02:01:39 PM
If you want to call it mispoke then so be it. mY intent is very clear while you have done little but harp on nonsense.
Your intend was to blow off my posts by "who cares" and "This is really all that matters".
Your intent was to show that people only care about and all that matters is if the plan works.
I pointed out how illogical that is and your response was you never said that. You said exactly that!!!
The problem is the posts are there for everyone to see.
Not lets move on.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 24, 2020, 02:04:39 PM
I still haven't received an answer from our resident experts to the WL vs Term + S&P mutual funds question.
My uneducated research shows that if I invest 10k annually at an overall 8% rate of return annually (very conservative- over ANY given 40 yr period) will be almost 3mil after 40 yrs.
If my 30 term cost $1500 monthly (total $540,000) and my total 40 yr principal is $480,000, then I've invested a total of approx 1mil for a return of approx 3mil + 1mil life insurance peace of mind.
How much would that cost me in WL?

While I've found this recent blog post (https://theinsuranceproblog.com/whole-life-insurance-versus-stock-market-a-new-and-updated-numbers/) that might address some of your questions, there is an important issue that jumps at me within the set of assumptions you've presented.

I don't know what the starting age you are assuming for this, but you do mention a 30 year term (not mentioning how much, but I'm assuming you're talking about $1MM, even though you seem to be assuming $3MM capital at retirement, so why would you insure for any less than that, especially if a premature death would mean that the capital is needed for a longer period of time) while you keep on talking about ANY given 40 year investment period. So what if year 31 of that given investment period suffers a significant market crash (yes, if the investment isn't touched for the next 10 years there might be a spectacular recovery, or it might take longer like the Nasdaq after the dot.com crash or the Nikkei 225 post 1989, a high which it has never recovered)?
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 24, 2020, 02:13:24 PM
You left out losing the Cadilac of heath insurance. the child care benefit mentioned by @ExGingi may be location based.

The bottom line is that the welfare state is designed as a honey trap. They make it very difficult to get out of it as incremental increases to self-reliance turn out to be highly detrimental to what's provided by the government. Just look at the difference at the cost of healthcare available in the individual marketplace in NY between someone that's earning up to 200% of FPL and someone just above. While just above might have subsidies, all of the sudden deductibles and co-pays are up, and even with the subsidies the monthly premium is significantly higher. Or look at Child Health Plus. up to 400% of FPL one can get it somewhat subsidized at a maximum family cost of $180/month ($60 per child, with a family max). Go over 400% and it's $280 per child per month.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 02:14:12 PM
Your intend was to blow off my posts by "who cares" and "This is really all that matters".
Your intent was to show that people only care about and all that matters is if the plan works.
I pointed out how illogical that is and your response was you never said that. You said exactly that!!!
The problem is the posts are there for everyone to see.
Not lets move on.
Yes our posts are there for everyone to see and I am therefore not going to continue arguing agains your illogical arguments. The logic behind what I wrote is very clear to anyone willing to see. You want to go on the hamster wheel di it yourself I will not join you.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 02:18:09 PM
While I've found this recent blog post (https://theinsuranceproblog.com/whole-life-insurance-versus-stock-market-a-new-and-updated-numbers/) that might address some of your questions, there is an important issue that jumps at me at the set of assumptions you've presented.

I don't know what the starting age you are assuming for this, but you do mention a 30 year term (not mentioning how much, but I'm assuming you're talking about $1MM, even though you seem to be assuming $3MM capital at retirement, so why would you insure for any less than that, especially if a premature death would mean that the capital is needed for a longer period of time) while you keep on talking about ANY given 40 year investment period. So what if year 31 of that given investment period suffers a significant market crash (yes, if the investment isn't touched for the next 10 years there might be a spectacular recovery, or it might take longer like the Nasdaq after the dot.com crash or the Nikkei 225 post 1989, a high which it has never recovered)?

If nothing else, take out of this that a diversified stock portfolio does not mean that your assets are diversified.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 02:18:43 PM
Yes our posts are there for everyone to see and I am therefore not going to continue arguing agains your illogical arguments. The logic behind what I wrote is very clear to anyone willing to see. You want to go on the hamster wheel di it yourself I will not join you.
No need for the hamster wheel since you now are chaining your tune that other things do matter besides if the plan works.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 02:20:33 PM
No need for the hamster wheel since you now are chaining your tune that other things do matter besides if the plan works.
The change is nowhere but in your own mind.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 02:33:09 PM
The change is nowhere but in your own mind.
So you don't want to keep going? I guess you misspoke again.  ::)

Talking about if the plan works or helped people.
This is really all that matters.
Who cares.
All that really matters is whether or not it works and not any of these other side shows.
What makes it a good plan is if it works.
...but you never said any of that!!!  :)
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 24, 2020, 02:38:16 PM
Considering that this is a service he offers, that would make sense. I have given similar advice to someone and told him that if having an advisor to speak to is what will get you to actually fund the investment then it is a price well worth the cost.
False.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 02:48:47 PM
..but you never said any of that!!!  :)
I absolutley said all of that and stand by it.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 02:49:18 PM
False.

I'm sorry, profits by endorsing advisors.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 02:56:36 PM
I absolutley said all of that and stand by it.
Hopefully you understand what "all" means.
Then what is the the argument? You are claiming about the plan "All that really matters is whether or not it works and not any of these other side shows."
My point that you disagree with is that if the plan works is not all that matters. I can show a MS plan that works for some here but it is not a good plan for them.
Title: Re: Dave Ramsey Plan
Post by: Lou Bob on July 24, 2020, 03:00:11 PM
Hopefully you understand what "all" means.
Then what is the the argument? You are claiming about the plan "All that really matters is whether or not it works and not any of these other side shows."
My point that you disagree with is that if the plan works is not all that matters. I can show a MS plan that works for some here but it is not a good plan for them.

for all this talk about MS plans...let's hear something good :)
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 24, 2020, 03:04:10 PM
I'm sorry, profits by endorsing advisors.
Therefore?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 03:06:48 PM
for all this talk about MS plans...let's hear something good :)
My course is 2995.00 but if you order in the next 30 minutes it is only 2495.00
Unlike the conman I only except cash.  :)
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 24, 2020, 03:08:20 PM
He did a scientific study recently of 10000 millionaires in the country, you can find the data on this but the majority of millionaires in the country pay off their home in 10.2(iirc) years. It may be a weakness to need to see results to motivate you to keep you going but its also pretty normal.
Chris Hogan study.
https://www.amazon.com/dp/0977489523/ref=cm_sw_r_apa_i_qiZgFbCFGN7KH
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 03:13:44 PM
I can show a MS plan that works for some here but it is not a good plan for them.

Is your point that it is not for everyone?
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 03:14:15 PM
Therefore?
Therefore it makes sense that it would be a concept that he pushes.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 03:18:20 PM
Is your point that it is not for everyone?
No, my point is and has been "all that matters" is not just if a plan works or not.
Now we really do need:
(https://i.postimg.cc/dVrdgWCx/Secondhand-Easy-Azurevase-size-restricted.gif)
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 03:20:39 PM
No, my point is and has been "all that matters" is not just if a plan works or not.
Now we really do need:
(https://i.postimg.cc/dVrdgWCx/Secondhand-Easy-Azurevase-size-restricted.gif)


Ahh yes the sign of someone harping on some side point such as not liking a word or two and ignoring the real discussion at hand. I guess so.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 03:27:10 PM
Ahh yes the sign of someone harping on some side point such as not liking a word or two and ignoring the real discussion at hand. I guess so.
Lets see if this will help.

You sell energy correct?
I want to save money on energy. I go with a company and they save me money. That does not make it a good plan because they saved me money.
You come along and say that is a terrible plan. I ask why, it worked for me. You point out the flaws and explain how I should be saving more money.
I reply with some BS how first I need to save a little money to make me feel good.

I know you are not going to agree with the analogy so GS!!!

When I say I am done with this I really mean it.  ;)
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 24, 2020, 03:31:02 PM
Lets see if this will help.

You sell energy correct?
I want to save money on energy. I go with a company and they save me money. That does not make it a good plan because they saved me money.
You come along and say that is a terrible plan. I ask why, it worked for me. You point out the flaws and explain how I should be saving more money.
I reply with some BS how first I need to save a little money to make me feel good.

I know you are not going to agree with the analogy so GS!!!

When I say I am done with this I really mean it.  ;)
Thank G'd. Now we can have an honest conversation.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 03:35:50 PM
Thank G'd. Now we can have an honest conversation.
When @aygart made the comment there was no response from you. Try a little less hate.
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 24, 2020, 03:37:18 PM
When @aygart made the comment there was no response from you. Try a little less hate.
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 24, 2020, 03:39:55 PM
Therefore it makes sense that it would be a concept that he pushes.
So the product is not a good product, cause he endorses and profits from said endorsement?
That's like accusing Dan of pushing bad products cause he profits off affiliate links.
Title: Re: Dave Ramsey Plan
Post by: whYME on July 24, 2020, 03:52:12 PM
I can teach most people in debt how to get out MSing.
I highly doubt that.

I'll bet most people who try your "plan" to get out of debt only end up deeper in debt.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 24, 2020, 04:02:24 PM
My course is 2995.00 but if you order in the next 30 minutes it is only 2495.00
Unlike the conman I only except cash.  :)

This kind?

(https://media1.tenor.com/images/78ea2e67b196f43cd619fad65b9a75b7/tenor.gif)
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 04:05:45 PM
This kind?
...or the shiny stuff. That would get them all out of debt.  ;)
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 24, 2020, 04:09:10 PM
Lets see if this will help.

You sell energy correct?
I want to save money on energy. I go with a company and they save me money. That does not make it a good plan because they saved me money.
You come along and say that is a terrible plan. I ask why, it worked for me. You point out the flaws and explain how I should be saving more money.
I reply with some BS how first I need to save a little money to make me feel good.

So here's an argument for you. The plan that saves you money is good, as it improved on your previous situation and you were able and motivated to take action on it. The other plan might be much better, but for whatever reason you might find it hard to act on.

All that matters is action (see Richard Russell article I posted above). There can be flaws in the program, it might be presented by a conman, etc. etc. and there might be plenty of theoretically better plans, but it's the plan that gets one to take action towards improving their situation which is what counts.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 24, 2020, 04:10:05 PM
...or the shiny stuff. That would get them all out of debt.  ;)


I'll just give you the IOUs, but you must include a free action service, i.e. you teach me the MS plan and you execute it for me (without getting my SSN, etc. and while posting collateral for the spending done).
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 04:12:44 PM
So here's an argument for you.
Good argument.  :)
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 24, 2020, 04:30:42 PM
So let me ask the question. For all those that paid money for his course do you pay your smaller balances first instead of your high interest balances first? It is a straight forward simple question.

Yes.

Now a question for you;
Do you recognize the value of motivation in making it more likely that a person reach their goals?
Title: Re: Dave Ramsey Plan
Post by: 12HRS on July 24, 2020, 04:37:41 PM
Is this MS plan a side hustle to increase income or away of teaching living within your means and saving?
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 05:06:29 PM
So here's an argument for you. The plan that saves you money is good, as it improved on your previous situation and you were able and motivated to take action on it. The other plan might be much better, but for whatever reason you might find it hard to act on.

All that matters is action (see Richard Russell article I posted above). There can be flaws in the program, it might be presented by a conman, etc. etc. and there might be plenty of theoretically better plans, but it's the plan that gets one to take action towards improving their situation which is what counts.

Good vs better or Good vs bad?
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 24, 2020, 06:06:45 PM
For those who are interested in the research regarding the effectiveness of the debt snowball.
https://www.forbes.com/sites/robertberger/2017/07/20/debt-snowball-versus-debt-avalanche-what-the-academic-research-shows/

In the example they gave, you save $233 of interest over 4.5 years by paying based on interest rate

That is without taking into account the psychological benefits of the snowball approach, which
1 - makes it more likely that you'll stick to it.
2 - usually leads to paying more each month and finishing sooner.

Obviously if you don't see being debt free as a positive goal, you won't appreciate those benefits.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 24, 2020, 06:14:20 PM
For those who are interested in the research regarding the effectiveness of the debt snowball.
https://www.forbes.com/sites/robertberger/2017/07/20/debt-snowball-versus-debt-avalanche-what-the-academic-research-shows/

In the example they gave, you save $233 of interest over 4.5 years by paying based on interest rate

That is without taking into account the psychological benefits of the snowball approach, which
1 - makes it more likely that you'll stick to it.
2 - usually leads to paying more each month and finishing sooner.

Obviously if you don't see being debt free as a positive goal, you won't appreciate those benefits.
The plan that is best is the plan that one keeps to
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 24, 2020, 06:20:38 PM
The plan that is best is the plan that one keeps to

Even if it's criminal?
/Sarc
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 24, 2020, 06:53:07 PM
Now a question for you;
Do you recognize the value of motivation in making it more likely that a person reach their goals?
Yes but don't put much value in it.
Title: Re: Dave Ramsey Plan
Post by: grodnoking on July 24, 2020, 07:10:35 PM
Yes but don't put much value in it.
שלא לשמה בא לשמה
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 25, 2020, 11:16:04 PM
Yes but don't put much value in it.

Why?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 25, 2020, 11:29:07 PM
Why?
The goal is to pay off your debt. Say you owe 20k. Paying off a card with a 1k balance or paying 1k on a card with a 10k balance will leave you with 19k left to pay. That is the motivation that should be taught. Paying a card off with low interest instead of a high interest card is just wrong. It will take you longer to pay off your 20k debt.

At CB their main goal is credit repair. The progress/motivation is your FICO score. Getting inquires to zero can be seen as a victory but meaningless in the big picture.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 25, 2020, 11:54:14 PM
The goal is to pay off your debt. Say you owe 20k. Paying off a card with a 1k balance or paying 1k on a card with a 10k balance will leave you with 19k left to pay. That is the motivation that should be taught. Paying a card off with low interest instead of a high interest card is just wrong. It will take you longer to pay off your 20k debt.

At CB their main goal is credit repair. The progress/motivation is your FICO score. Getting inquires to zero can be seen as a victory but meaningless in the big picture.
Keep in mind that Dave Ramsey is advocating to no longer have debt and the FICO score is not a great motivator for someone who will no longer be having ccs. Many of these people will have difficulty keeping out of the cc trap and truly are people who the only way out for them is to not have any ccs at all.
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 26, 2020, 12:01:34 AM
Say you owe 20k. Paying off a card with a 1k balance or paying 1k on a card with a 10k balance will leave you with 19k left to pay. That is the motivation that should be taught.

How do you address the research that shows that human psychology doesn't work that way. I'm referring to research regarding all areas in which motivation is needed (such as weight loss etc.), not just paying off debt.

At CB their main goal is credit repair. The progress/motivation is your FICO score.

Dave Ramsey's advice is a terrible way to reach that goal.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 26, 2020, 12:05:38 AM
How do you address the research that shows that human psychology doesn't work that way. I'm referring to research regarding all areas in which motivation is needed (such as weight loss etc.), not just paying off debt.

Dave Ramsey's advice is a terrible way to reach that goal.
The main point is that it is good advice for the right person. If you are not that person then move on, but there are very likely thousands of people who are now debt free who would have been drowning if not for his system. Anyone who can't understand that needs to get out more.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on July 26, 2020, 12:06:49 AM
The goal is to pay off your debt. Say you owe 20k. Paying off a card with a 1k balance or paying 1k on a card with a 10k balance will leave you with 19k left to pay. That is the motivation that should be taught. Paying a card off with low interest instead of a high interest card is just wrong. It will take you longer to pay off your 20k debt.

At CB their main goal is credit repair. The progress/motivation is your FICO score. Getting inquires to zero can be seen as a victory but meaningless in the big picture.
Last i checked dave ramsey gets paid and gets credit for helping people get out of debt.  All the credit you get is for creating the most political threads on ddf.


So all you logic against his method doesnt make sense when he has studies to back up his claims
Title: Re: Dave Ramsey Plan
Post by: 12HRS on July 26, 2020, 12:15:34 AM
Is this MS plan a side hustle to increase income or away of teaching living within your means and saving?

 :-X
Title: Re: Dave Ramsey Plan
Post by: 12HRS on July 26, 2020, 01:38:44 AM
(https://media.giphy.com/media/uLy4Bo680hZxm/giphy.gif)

Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 07:34:54 AM
Last i checked dave ramsey gets paid and gets credit for helping people get out of debt.  All the credit you get is for creating the most political threads on ddf.


So all you logic against his method doesnt make sense when he has studies to back up his claims
This is why it is hard to have honest discussions on DDF. You have many members that don't have the willpower to separate JS from the rest of the forum.

If you try and open your eyes you will see I helped many DDF members. Oh and by the way all that help was free.  :)
Title: Re: Dave Ramsey Plan
Post by: Lurker on July 26, 2020, 07:41:07 AM
Ramsey is the Spirit of financial health. It'll get you there, but it wont be pretty or comfortable and it will end up costing you a lot more than you thought. Oh, and pretty much everyone else who has any experience will think you're crazy for using him/them.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 07:41:41 AM
Is this MS plan a side hustle to increase income or away of teaching living within your means and saving?
It seems we are all over the place with his plan. So his plan is to teach you to live with in your means and save?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 07:47:10 AM
Keep in mind that Dave Ramsey is advocating to no longer have debt and the FICO score is not a great motivator for someone who will no longer be having ccs. Many of these people will have difficulty keeping out of the cc trap and truly are people who the only way out for them is to not have any ccs at all.
Like I said before then they need help in other areas and their financial problem is just one of the symptoms.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 07:49:38 AM
How do you address the research that shows that human psychology doesn't work that way. I'm referring to research regarding all areas in which motivation is needed (such as weight loss etc.), not just paying off debt.
My example was motivation. One that gets you quicker to your goal.
Title: Re: Dave Ramsey Plan
Post by: Lou Bob on July 26, 2020, 07:53:41 AM
My example was motivation. One that gets you quicker to your goal.
you should write a book and host a radio show.
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 26, 2020, 07:55:55 AM
My example was motivation. One that gets you quicker to your goal.

Do you have research/data to back up that statement?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 08:01:26 AM
Do you have research/data to back up that statement?
I have simple math. Look if you feel going from 20k in debt to 19k in debt isn't motivation nothing I can say will change that.
Lets me ask you this. All your CC debt is on one CC and it is 20k. As that debt decreases isn't that motivation that what you are doing is working?
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 26, 2020, 08:10:50 AM
I have simple math. Look if you feel going from 20k in debt to 19k in debt isn't motivation nothing I can say will change that.
Lets me ask you this. All your CC debt is on one CC and it is 20k. As that debt decreases isn't that motivation that what you are doing is working?

Finance ≠ Math
Title: Re: Dave Ramsey Plan
Post by: moko on July 26, 2020, 08:12:12 AM
This thread is begging to be moved to JS
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 08:16:19 AM
This thread is begging to be moved to JS
Just because there are opposing views does not mean it gets moved to JS.
Title: Re: Dave Ramsey Plan
Post by: yitzgar on July 26, 2020, 08:19:29 AM
Ramsey is the Spirit of financial health. It'll get you there, but it wont be pretty or comfortable and it will end up costing you a lot more than you thought. Oh, and pretty much everyone else who has any experience will think you're crazy for using him/them.
Whichever route you take, if you are in debt, it won't be pretty or comfortable to get there. (He is very clear that this is true as far as his own program)
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 08:22:04 AM
Does part of his plan still say that debt is bad and you should not have any CC's?
Title: Re: Dave Ramsey Plan
Post by: moko on July 26, 2020, 08:42:43 AM
Just because there are opposing views does not mean it gets moved to JS.
nothing to do with opposing views...
More to do with the hamster wheel.
After you've gone several rounds with the exact same arguments dressed with different wording, it's time to go.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 08:48:40 AM
nothing to do with opposing views...
More to do with the hamster wheel.
After you've gone several rounds with the exact same arguments dressed with different wording, it's time to go.
Lets go to baby step number one. He wants you to put 1k in an emergency fund while you are still in debt.
Many emergencies will be over 1k, then what? You might not ever run into an emergency and the money is just sitting there instead of lowering your debt.
Title: Re: Dave Ramsey Plan
Post by: moko on July 26, 2020, 09:17:51 AM
Lets go to baby step number one. He wants you to put 1k in an emergency fund while you are still in debt.
Many emergencies will be over 1k, then what? You might not ever run into an emergency and the money is just sitting there instead of lowering your debt.
NIME.
Regardless, that's not what I've seen in most of this thread.
How long did it take me to get an inkling of an answer to my somewhat unrelated WL question (which, btw, the ore I read of the provided info, actually convinced of the opposite)?
Every so often someone begins an debate if some substance but most of the time (at least it seems to me) it's mostly cyclical arguments, round n round.
My actual position on DR, I like a lot of what he , not everything, I'll take what I can use and ignore the rest regardless if he believes that it's all or nothing.
As for my general outlook on debates and arguments, I don't have to be right as long as I get what I want.
If i don't think I'll get what I want I try not to bother (despite being tempted to argue)
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 09:38:38 AM
NIME.
Regardless, that's not what I've seen in most of this thread.
How long did it take me to get an inkling of an answer to my somewhat unrelated WL question (which, btw, the ore I read of the provided info, actually convinced of the opposite)?
Every so often someone begins an debate if some substance but most of the time (at least it seems to me) it's mostly cyclical arguments, round n round.
My actual position on DR, I like a lot of what he , not everything, I'll take what I can use and ignore the rest regardless if he believes that it's all or nothing.
As for my general outlook on debates and arguments, I don't have to be right as long as I get what I want.
If i don't think I'll get what I want I try not to bother (despite being tempted to argue)
When you get two strong willed people go against each other of course you are going to go round n round. The default on DDF is when I am one of those is to blame me. That is fine as I am used to it by now.

If you don't want to discuss his baby steps one by one that is fine with me. Maybe others will defend them.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on July 26, 2020, 09:41:52 AM
Lets go to baby step number one. He wants you to put 1k in an emergency fund while you are still in debt.
Many emergencies will be over 1k, then what? You might not ever run into an emergency and the money is just sitting there instead of lowering your debt.
Read his book, fully understand his method and then come back.  Very hard to argue with you.

The $1k emergency fund is for basics. He gives an example if your car breaks down and u need a few hundred bucks to fix it so you can get to work and make more money. If you don't have the $1000 emergency it will drag you down even more. 

Obviously you need a larger emergency fund. That's why he has baby step 3. But for starters at least have something for the small stuff in life that might turn into bigger issues.


Again please read it and learn his method before arguing against it
 
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 09:50:09 AM
Read his book, fully understand his method and then come back.  Very hard to argue with you.

The $1k emergency fund is for basics. He gives an example if your car breaks down and u need a few hundred bucks to fix it so you can get to work and make more money. If you don't have the $1000 emergency it will drag you down even more. 

Obviously you need a larger emergency fund. That's why he has baby step 3. But for starters at least have something for the small stuff in life that might turn into bigger issues.


Again please read it and learn his method before arguing against it
I am not going to waste my money. I have seen his method many times.

My point is your car example can easily be over 1k and then you will have to borrow. Most Americans live pay check to pay check.
Even if you agree with step #1 it should be moved to at least #3.
Title: Re: Dave Ramsey Plan
Post by: YoelFried on July 26, 2020, 09:55:33 AM
The conversation for the last couple of days are catch 22.

My take = the status quo is just the opposite of save ramsey, we live In a world where if you borrow more you make more. (Lets not discuss this one now). The people that follow dave ramsey have a really Pleasant life without worrying what the next day will bring because it based on you need to have a long term plan.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on July 26, 2020, 09:57:17 AM
I am not going to waste my money. I have seen his method many times.

My point is your car example can easily be over 1k and then you will have to borrow. Most Americans live pay check to pay check.
Even if you agree with step #1 it should be moved to at least #3.
I will stop arguing with you here.  I see that you will argue every point I make.  A fair argument is when both have the same knowledge yet different point of views.  I think in this case you don't really want to understand what he is saying because it takes away from the thrill of just saying "he is wrong because i decided so"

I will answer one last time. Pay check to paycheck means you dont have a dollar for any small issues that can be bigger issues.  You need to pay a dentist, car repair, etc.  This gives you a little more needed flexibility.   Does it cover everything? No. But will it help many situations? Yes.  Therefore its the start.  And when all debt is paid off you focus on full emergency fund.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on July 26, 2020, 09:58:39 AM
The conversation for the last couple of days are catch 22.

My take = the status quo is just the opposite of save ramsey, we live In a world where if you borrow more you make more. (Lets not discuss this one now). The people that follow dave ramsey have a really Pleasant life without worrying what the next day will bring because it based on you need to have a long term plan.
Exactly.  His method should give "financial freedom"    doesn't mean that you can't become richer asap by taking loans.  But for example now with covid, anyone that stuck to his method should have been ok to weather 6 months...
Title: Re: Dave Ramsey Plan
Post by: avromie7 on July 26, 2020, 10:00:21 AM
I am not going to waste my money. I have seen his method many times.

My point is your car example can easily be over 1k and then you will have to borrow. Most Americans live pay check to pay check.
Even if you agree with step #1 it should be moved to at least #3.
The reason it's at #1 is to be able to separate old debt from current expenses, if every time something comes up you need to put it back on the CC you're continuing the cycle. As with everything in life nothing is foolproof, but the $1k covers most surprises.

Another big part of his method is the budgeting which includes putting money away every month for anticipated expenses like car or home repairs, so even if something big breaks there should be money in the car expense fund to cover at least part of it with the $1k filling in.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 10:05:18 AM
I will stop arguing with you here.  I see that you will argue every point I make.  A fair argument is when both have the same knowledge yet different point of views.  I think in this case you don't really want to understand what he is saying because it takes away from the thrill of just saying "he is wrong because i decided so"

I will answer one last time. Pay check to paycheck means you dont have a dollar for any small issues that can be bigger issues.  You need to pay a dentist, car repair, etc.  This gives you a little more needed flexibility.   Does it cover everything? No. But will it help many situations? Yes.  Therefore its the start.  And when all debt is paid off you focus on full emergency fund.
I have a different position than what DR teaches. So if you believe DR then of course we will see it differently.

I will try to explain one more time. You can use that 1k to pay off debt and save money. If an emergency arrives you can borrow against that debt to pay the emergency. Once you are out of debt you can work on your emergency fund. That is why I said it should not be #1. You are financial better off this way.

Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 10:08:45 AM
The reason it's at #1 is to be able to separate old debt from current expenses, if every time something comes up you need to put it back on the CC you're continuing the cycle. As with everything in life nothing is foolproof, but the $1k covers most surprises.

Another big part of his method is the budgeting which includes putting money away every month for anticipated expenses like car or home repairs, so even if something big breaks there should be money in the car expense fund to cover at least part of it with the $1k filling in.
I understand what he is saying and disagree.
From a financial stand point it is wrong.
We can run the numbers if you want.  :)

Lets move on. Does he use a 12% return for investments?
Title: Re: Dave Ramsey Plan
Post by: YoelFried on July 26, 2020, 10:12:32 AM
I have a different position than what DR teaches. So if you believe DR then of course we will see it differently.

I will try to explain one more time. You can use that 1k to pay off debt and save money. If an emergency arrives you can borrow against that debt to pay the emergency. Once you are out of debt you can work on your emergency fund. That is why I said it should not be #1. You are financial better off this way.
I see that you know so much about financial advise. How much is your net worth?

Quote from Warren buffet.

"Leverage is like Russian Roulette; 99% of the time it works, but neither 83.3% or 99% is good enough when there is no gain to offset the risk of loss,"

https://www.thewealthadvisor.com/article/why-warren-buffett-wont-play-leverage
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 10:15:09 AM
But for example now with covid, anyone that stuck to his method should have been ok to weather 6 months...
If you did my method you would have been good for at least 12 months.  :)
I have excel break all household expenses down to the day, bi-weekly and yearly.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 10:18:03 AM
I see that you know so much about financial advise. How much is your net worth?
Enough to retire and never have to worry about money.
Title: Re: Dave Ramsey Plan
Post by: YoelFried on July 26, 2020, 10:21:48 AM
That can be 500k-50mm it's a very big ballpark to throw. Did you have financial freedom or at least now? I'm not sure your age. DR plan is about having a freedom plan from the twenties up until 120
Title: Re: Dave Ramsey Plan
Post by: YoelFried on July 26, 2020, 10:24:57 AM
I understand what he is saying and disagree.
From a financial stand point it is wrong.
We can run the numbers if you want.  :)

Lets move on. Does he use a 12% return for investments?
I think to measure the market
10% conservative
12% 30 year period or longer (it probably could be 40 years as well).
12%+ mutual funds that outpreferm I would give it 13-14%
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 10:29:20 AM
That can be 500k-50mm it's a very big ballpark to throw. Did you have financial freedom or at least now? I'm not sure your age. DR plan is about having a freedom plan from the twenties up until 120
I have had financial freedom from day one.
Look, what his plan wants you to achieve is great. I and many other disagree with things in the plan. 
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 10:30:36 AM
I think to measure the market
10% conservative
12% 30 year period or longer (it probably could be 40 years as well).
12%+ mutual funds that outpreferm I would give it 13-14%
This is totally unrealistic. Past performance is no guarantee of future performance.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on July 26, 2020, 10:31:06 AM
I understand what he is saying and disagree.
From a financial stand point it is wrong.
We can run the numbers if you want.  :)

Lets move on. Does he use a 12% return for investments?
Financial decisions are behavioral based.  So if you look at dollar signs he may be wrong. But end result he may be right.   I did not say that he is right, I said he may be.  Fully understand his program and then everyone has to decide for themselves
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 10:37:38 AM
Financial decisions are behavioral based.  Some if you look at dollar signs he may be wrong. But end result he may be right.   Judt a thought
Financial many of the things he does is wrong. Don't fool yourself. Now factoring in motivation that is a different story and is beneficial to some.
I never believed the end justified the means.
With that being said of course others and I could be wrong.
Do we have any verifiable figures on his success rate? 
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 26, 2020, 10:52:15 AM
I think to measure the market
10% conservative
12% 30 year period or longer (it probably could be 40 years as well).
12%+ mutual funds that outpreferm I would give it 13-14%

What are you basing this on?
Title: Re: Dave Ramsey Plan
Post by: YoelFried on July 26, 2020, 11:15:45 AM
What are you basing this on?
Past performance.

I’m my experience people that are busy saying that the market gives less, don't invest at all.
Title: Re: Dave Ramsey Plan
Post by: YoelFried on July 26, 2020, 11:16:14 AM
This is totally unrealistic. Past performance is no guarantee of future performance.
True. But Is a good data starting point
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 26, 2020, 11:32:01 AM
Do we have any verifiable figures on his success rate?

What type of figures would you accept as verification that his way works?
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 26, 2020, 11:32:51 AM
Past performance.

I’m my experience people that are busy saying that the market gives less, don't invest at all.

Should I share with you my investment accounts?

With all due respect, how long is your experience? Were you invested in the market in 2008? in 1999? in 1987?

Let's go back to the questions I've asked earlier. What's the definition of "conservative"? (and let me add, what do you base that definition on?)

Also are you suggesting any type of diversified portfolio allocation, or are you suggesting 100% in the S&P500 (though which vehicle?) If you're suggesting diversified allocation, what's the allocation you're suggesting? Are you suggesting any allocation shift at any time? How about any periodic rebalancing?
Title: Re: Dave Ramsey Plan
Post by: YoelFried on July 26, 2020, 11:46:07 AM
Should I share with you my investment accounts?

With all due respect, how long is your experience? Were you invested in the market in 2008? in 1999? in 1987?

Let's go back to the questions I've asked earlier. What's the definition of "conservative"? (and let me add, what do you base that definition on?)

Also are you suggesting any type of diversified portfolio allocation, or are you suggesting 100% in the S&P500 (though which vehicle?) If you're suggesting diversified allocation, what's the allocation you're suggesting? Are you suggesting any allocation shift at any time? How about any periodic rebalancing?
Always staying in equity
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 11:56:15 AM
What type of figures would you accept as verification that his way works?
Is there an independent study that was done? I think you agree we can't go by DR figures, correct?
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 26, 2020, 11:57:38 AM

Also are you suggesting any type of diversified portfolio allocation, or are you suggesting 100% in the S&P500 (though which vehicle?) If you're suggesting diversified allocation, what's the allocation you're suggesting? Are you suggesting any allocation shift at any time? How about any periodic rebalancing?

If you are asking about Dave Ramsey's advice, here is the outline - https://www.daveramsey.com/blog/daves-investing-philosophy

I think the most important part of what he teaches is to never invest in anything you don't understand. He often says that if you meet with an investment advisor and you come out feeling stupid, run the other way.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 12:00:31 PM
True. But Is a good data starting point
Let me tell you a real life story. When I took out my first WL policy the selling point was the dividends were never cut in the history of this very old company. Based on that I would have millions when I retired. Needless to say dividends were cut the next year and several times the following years. If I relied on that to retire I would now need DR course.  :)
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 12:04:40 PM
Would it be fair to say his course is mostly motivation and not financial advice?
I mean debt is one of the greatest financial tools you have to be very successful.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on July 26, 2020, 12:16:29 PM
Our grandparents that came to the u.s. after the war and became very rich here I don't think they became rich through having debt. It was more about saving and investing. You can become very rich without debt.  At times obviously you need it, but its not a prerequisite to being rich
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 26, 2020, 12:17:35 PM
Would it be fair to say his course is mostly motivation and not financial advice?

The course, yes. The plan no.

I mean debt is one of the greatest financial tools you have to be very successful.

Sure, it's a faster way to get rich, but it's also a dangerous way.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 12:30:12 PM
Our grandparents that came to the u.s. after the war and became very rich here I don't think they became rich through having debt. It was more about saving and investing. You can become very rich without debt.  At times obviously you need it, but its not a prerequisite to being rich
There are exceptions to the rules. You think major companies were built without debt.
DR knows 99.9% of those who take his course would never own a house without debt. So is this debt OK?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 12:31:47 PM
The course, yes. The plan no.
The plan is what I have a problem with. No one has yet to dispute what I said was wrong with the plan on a financial basis.
Title: Re: Dave Ramsey Plan
Post by: YoelFried on July 26, 2020, 12:32:08 PM
The course, yes. The plan no.

Sure, it's a faster way to get rich, but it's also a dangerous way.
100% there not too many buffets or ramsey that have wealth steady for decades. In the heimiaha society rich means someone has nice house, car, few business and lots of workers. In the real world it's about what your net worth is about. It's not about how much money you turn around or money you have in your bank when it's funded from sba, LOC, heloc, these people are broke. And quote again Warren buffet "Whenever a bright person, a really bright person, goes broke that has a lot of money, it's because of leverage. It -- you simply -- you basically can't -- it would be almost impossible to go broke without borrowed money being in the equation."

Link to the article
https://www.thewealthadvisor.com/article/why-warren-buffett-wont-play-leverage
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 12:35:00 PM
100% there not too many buffets or ramsey that have wealth steady for decades. In the heimiaha society rich means someone has nice house, car, few business and lots of workers. In the real world it's about what your net worth is about. It's not about how much money you turn around or money you have in your bank when it's funded from sba, LOC, heloc, these people are broke. And quote again Warren buffet "Whenever a bright person, a really bright person, goes broke that has a lot of money, it's because of leverage. It -- you simply -- you basically can't -- it would be almost impossible to go broke without borrowed money being in the equation."

Link to the article
https://www.thewealthadvisor.com/article/why-warren-buffett-wont-play-leverage
How did leverage get into this? Leverage and debt are not the same.
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 26, 2020, 12:35:18 PM
No one has yet to dispute what I said was wrong with the plan on a financial basis.

Many people have, you just disagree. If people were machines, your way would work. People are not machines.

ETA: If CV were an AI, that would actually explain a lot of things...
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 12:38:17 PM
Many people have, you just disagree. If people were machines, your way would work. People are not machines.
No one has financially.
That is where motivation comes in. Financially paying off smaller debts and not high interest debt first is just wrong. Simple math explains this.
Now you want to bring in motivation then that is a different story for those who need motivation.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 12:40:59 PM
ETA: If CV were an AI, that would actually explain a lot of things...
Totally unfair. The overwhelming members on this forum I will bet payoff high interest CC's first if they have them. They will also BT to zero interest CC's. Does DR teach that?
Title: Re: Dave Ramsey Plan
Post by: Mordyk on July 26, 2020, 12:46:04 PM
There are exceptions to the rules. You think major companies were built without debt.
DR knows 99.9% of those who take his course would never own a house without debt. So is this debt OK?
Do you know his stance in buying a house?  Because he ok's a 15 year mortgage. 

Again, another point to prove you don't know what he stands for yet your don't like something.   Its like me disagreeing with the president of Madagascar.  I have no clue who it even is
Title: Re: Dave Ramsey Plan
Post by: Mordyk on July 26, 2020, 12:47:04 PM
Totally unfair. The overwhelming members on this forum I will bet payoff high interest CC's first if they have them. They will also BT to zero interest CC's. Does DR teach that?
He says transferring balances are a band aid. And it makes you feel better temporarily,  but you need a long term solution,  and not a temporary fix
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 26, 2020, 12:49:32 PM
They will also BT to zero interest CC's. Does DR teach that?

Not usually, because most of the people he talks to who suggest that are using it as an excuse to avoid changing the behaviors that led them into debt in the first place.

I have heard him endorse things like this for people who have shown (through their actions) that they are serious about changing the way they do things.
Title: Re: Dave Ramsey Plan
Post by: YoelFried on July 26, 2020, 12:49:51 PM
How did leverage get into this? Leverage and debt are not the same.
Please explain.

Debt = borrow money with not reward
Leverage = borrow money that will generate bigger return than borrowing cost.

If leverage could make someone rich and the real wealthy people stand away from it than consumer debt for sure.

Quote buffet "If I owed any money at 18%, the first thing I'd do with any money I had would be to pay it off," Buffett told her. "It's going to be way better than any investment idea I've got."

https://www.google.com/amp/s/www.cnbc.com/amp/2020/05/13/warren-buffett-cautions-against-carrying-a-credit-card-balance.html
Title: Re: Dave Ramsey Plan
Post by: YoelFried on July 26, 2020, 12:51:26 PM
Final point = don't be so busy which way of paying of debt is better, just start paying it off.
Title: Re: Dave Ramsey Plan
Post by: avromie7 on July 26, 2020, 12:52:02 PM
No one has financially.
That is where motivation comes in. Financially paying off smaller debts and not high interest debt first is just wrong. Simple math explains this.
Now you want to bring in motivation then that is a different story for those who need motivation.
If 100 people started the DR plan and on the same day 100 people in the exact same position started your plan, what would it look like 5, 10, or 30 years later? I would bet the overall combined wealth would be greater following the DR plan than yours. Sure the ones who stick to your plan would have a little more than the ones sticking to the DR plan, but more of the ones taking the DR plan would stick with it and continue with it many years later. You're entitled to disagree with this premise if you have evidence to back it up.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 12:52:54 PM
Do you know his stance in buying a house?  Because he ok's a 15 year mortgage. 
I know his stance from 20 years ago and it seems nothing changed.
A 15 year mortgage is massive debt. This is why a say he is a hypocrite. Now I am not arguing with you. Just stating my position.
Title: Re: Dave Ramsey Plan
Post by: farmbochur on July 26, 2020, 12:53:24 PM
DR knows 99.9% of those who take his course would never own a house without debt. So is this debt OK?

He wouldn't personally do it, but debt on a primary residence is within the guidelines of what he teaches (provided down payment is 20%+ and monthly payment is <25% take-home pay).

see 3:10 on the sound clip
https://www.daveramsey.com/askdave/home-buying/pay-cash-or-borrow#
Title: Re: Dave Ramsey Plan
Post by: avromie7 on July 26, 2020, 12:55:20 PM
Not usually, because most of the people he talks to who suggest that are using it as an excuse to avoid changing the behaviors that led them into debt in the first place.

I have heard him endorse things like this for people who have shown (through their actions) that they are serious about changing the way they do things.
Another important part of the equation is how much you'll actually save by transferring, most people he speaks to will be debt free within 2 years, and generally don't have 20% interest credit cards just waiting years until they pay it off.
Title: Re: Dave Ramsey Plan
Post by: YoelFried on July 26, 2020, 12:55:30 PM
https://sndup.net/4rq8

For those who know Yiddish.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 12:57:14 PM
He says transferring balances are a band aid. And it makes you feel better temporarily,  but you need a long term solution,  and not a temporary fix
WOW.
Paying off low balances also makes you feel better and is a temporary fix.
Transferring to a zero % card will get you out of debt sooner. I am not saying adding new debt but making it easier to pay off existent debt.
Title: Re: Dave Ramsey Plan
Post by: YoelFried on July 26, 2020, 12:59:50 PM
WOW.
Paying off low balances also makes you feel better and is a temporary fix.
Transferring to a zero % card will get you out of debt sooner. I am not saying adding new debt but making it easier to pay off existent debt.
Alot ot the zero apr have a transfer fee as well.
I am in the financial service business, I have seen people that had it all written out, zero apr etc. But life is always not as planned. Banks are money making companies.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 01:06:52 PM
Alot ot the zero apr have a transfer fee as well.
I am in the financial service business, I have seen people that had it all written out, zero apr etc. But life is always not as planned. Banks are money making companies.
Of course you want 0 transfer fees and 0 or low interest.
The point I am making is it is valuable tool that he dismisses.
If you can't pay it off at 0% interest then DR himself will not be able to pay it off at 18%. This is simple math.
This is what I am talking about, common financial sense.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 01:09:12 PM
If you want to talk about his motivation on the plan that is fine. When you say it all makes sense on a financial level I will tear it apart.
Now when you put the two together then who knows.
Title: Re: Dave Ramsey Plan
Post by: YoelFried on July 26, 2020, 01:12:07 PM
Of course you want 0 transfer fees and 0 or low interest.
The point I am making is it is valuable tool that he dismisses.
If you can't pay it off at 0% interest then DR himself will not be able to pay it off at 18%. This is simple math.
This is what I am talking about, common financial sense.
You are like someone who is saying.

I only have buisnees debt (that is personal guaranteed), like the business is some third party.

Maybe your fine with this as well....

It's not always about the numbers or how you name it.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 01:16:29 PM
You are like someone who is saying.

I only have buisnees debt (that is personal guaranteed), like the business is some third party.

Maybe your fine with this as well....

It's not always about the numbers or how you name it.
Sorry you lost me. I am talking personal debt.
Consolidating your CC's to the lowest possible interest rate is sound "financial" advice. Do you or anyone taking his course disagree with this?
Title: Re: Dave Ramsey Plan
Post by: YoelFried on July 26, 2020, 01:25:18 PM
Sorry you lost me. I am talking personal debt.
Consolidating your CC's to the lowest possible interest rate is sound "financial" advice. Do you or anyone taking his course disagree with this?
Btw, Dave actually recommends to consolidate debt if it will save a bigger amount of money. But to consolidate or not is not the point.


https://youtu.be/OymGGEEhlVA

https://youtu.be/f0pYRLqWIPU
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 01:38:54 PM
Btw, Dave actually recommends to consolidate debt if it will save a bigger amount of money. But to consolidate or not is not the point.
Others here say his position is no. The first video he says no. Financial he is 100% wrong and I hope everyone understands that.
He gets back to you are the problem. The problem is he treats everyone like an idiot.
Here is a way for all of you to follow his debt snowball and pay it off sooner.
BT small amounts to different cards. This way you can pay off at 0% and still get that feel good feeling.
That tip is free.  :)
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 26, 2020, 01:46:32 PM
WOW.
Paying off low balances also makes you feel better and is a temporary fix.


How is it a temporary fix?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 01:48:25 PM
How is it a temporary fix?
You still need to pay off the high balance debts and it is going to cost you more.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 01:52:12 PM
We can keep going in circles but I know you all understand what I am saying.
Do any of you feel comfortable enough were you are currently at to transfer your CC debt to a 0% card?
We can run the numbers but you all know it will save you money.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 26, 2020, 05:08:19 PM
https://sndup.net/4rq8

For those who know Yiddish.

The ending might be a little off. Might be better off with ending with זעצט מען אן.... (http://www.kaveshtiebel.com/viewtopic.php?p=44945&sid=f816634a01ab41345904e6715df3bca3#p44945)
Title: Re: Dave Ramsey Plan
Post by: moko on July 26, 2020, 05:11:22 PM
The ending might be a little off. Might be better off with ending with זעצט מען אן.... (http://www.kaveshtiebel.com/viewtopic.php?p=44945&sid=f816634a01ab41345904e6715df3bca3#p44945)
now I've learned that kaveshteibel and yen coffee room are blocked on my device by Gentech due to "safety policy"
Title: Re: Dave Ramsey Plan
Post by: aygart on July 26, 2020, 06:39:05 PM
You still need to pay off the high balance debts and it is going to cost you more.

His concept is that you can then use the payments you had been making to the smaller balance accounts towards the larger balances.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 06:44:46 PM
His concept is that you can then use the payments you had been making to the smaller balance accounts towards the larger balances.
I fully understand his concept.  ;)
Title: Re: Dave Ramsey Plan
Post by: AussieMan on July 26, 2020, 08:02:21 PM
@CountValentine I agree with you that DR pay off low balance rather than high interest debt is illogical.

Question for you,
If one is allowed to pay 100% of their tax bill in March, would you suggest regardless to pay in installments or rather to put the installments into a interest bearing account and then pay in full at year end.
If you have 0% apr card which you can pay in full each month,would you suggest to pay in full, or better don't pay until the promo is over and put $ into a savings account?

What would you do, and what would you tell others to do?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 08:20:55 PM
I always pay as late as possible.
0% cards I would pay minimum each month until BT 0% runs out.

During the BT frenzy I had over 200k @ 4.5-5% just sitting there.
I have 4 kids.
1 I would say do it and even more if you can.
2 others I would say do it and I would watch them
The other one H*LL NO!!!  :)
Title: Re: Dave Ramsey Plan
Post by: AussieMan on July 26, 2020, 08:29:09 PM
Amazing
I asked you a question and you answered it.

ממנו יראו וכן יעשו
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 08:32:23 PM
Amazing
I asked you a question and you answered it.

ממנו יראו וכן יעשו
We are not in JS.  ;)
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 26, 2020, 09:02:44 PM
I always pay as late as possible.
0% cards I would pay minimum each month until BT 0% runs out.

During the BT frenzy I had over 200k @ 4.5-5% just sitting there.
I have 4 kids.
1 I would say do it and even more if you can.
2 others I would say do it and I would watch them
The other one H*LL NO!!!  :)

But doesn't keeping balances (even at 0%) hurt your score?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 09:23:01 PM
But doesn't keeping balances (even at 0%) hurt your score?
Yes.
Title: Re: Dave Ramsey Plan
Post by: thaber on July 26, 2020, 10:00:00 PM
I always pay as late as possible.
0% cards I would pay minimum each month until BT 0% runs out.

During the BT frenzy I had over 200k @ 4.5-5% just sitting there.
I have 4 kids.
1 I would say do it and even more if you can.
2 others I would say do it and I would watch them
The other one H*LL NO!!!  :)
The reason you don't get DR, is because you're a responsible and smart person who doesn't play stupid and doesn't borrow money unless they are certain they can pay back.
You are an exception to the rule, which is why 40-60% of American I have revolving credit card debt, and 70% have nothing in savings put away.
All those people need hand holding, motivation, and should not have debt at all, like child #4. DR helps them, because you're not their dad.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 10:10:17 PM
The reason you don't get DR, is because you're a responsible and smart person who doesn't play stupid and doesn't borrow money unless they are certain they can pay back.
You are an exception to the rule, which is why 40-60% of American I have revolving credit card debt, and 70% have nothing in savings put away.
All those people need hand holding, motivation, and should not have debt at all, like child #4. DR helps them, because you're not their dad.
40-60% and 70% figures sound right. IMHO they all don't need hand holding.
Child #4 (second oldest) hopefully will be financially responsible soon. It isn't the DR plan but the CV plan.  :)
Title: Re: Dave Ramsey Plan
Post by: thaber on July 26, 2020, 10:13:16 PM
40-60% and 70% figures sound right. IMHO they all don't need hand holding.
Child #4 (second oldest) hopefully will be financially responsible soon. It isn't the DR plan but the CV plan.  :)
All don't or don't all?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 10:19:43 PM
All don't or don't all?
I would say many of them do not need hand holding.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 26, 2020, 10:26:48 PM
I would say many of them do not need hand holding.

So what do they need?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 26, 2020, 10:35:07 PM
So what do they need?
Many of them, better paying jobs.  :)
Probably basic financial skills, learning a budget and the like.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 26, 2020, 11:58:30 PM
Many of them, better paying jobs.  :)
Probably basic financial skills, learning a budget and the like.

Jobs or entrepreneurship?

IDK about basic financial skills. Where do you draw the line between basic and beyond? Sometimes I feel like crying for people who didn't seek guidance or help at an earlier stage, and come to me with a specific issue, when there's so many simple things that could have been done over the years to put them in a better position now. Even without changing anything about their jobs and income.

What justification is there for a person who has been in business for himself previously, and then on a company payroll for over a decade, to have $0 in retirement savings.
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 27, 2020, 08:39:08 AM
Many of them, better paying jobs.  :)
Probably basic financial skills, learning a budget and the like.

Do you believe that people who are overweight just need more information about healthy food?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 27, 2020, 09:14:41 AM
Do you believe that people who are overweight just need more information about healthy food?
A small amount might.
Title: Re: Dave Ramsey Plan
Post by: SMS331 on July 27, 2020, 11:24:16 AM
The 1st 5-6 minutes of his interview with Ben Shapiro he explains that while mathmatically it makes no sense, he found that it wasn't an issue with the math, it was a problem with the person as if it was a math problem they never would have gotten into debt in the first place.

Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 27, 2020, 12:07:11 PM
The 1st 5-6 minutes of his interview with Ben Shapiro he explains that while mathmatically it makes no sense, he found that it wasn't an issue with the math, it was a problem with the person as if it was a math problem they never would have gotten into debt in the first place.



Hence, as I said:

Finance ≠ Math
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 27, 2020, 10:05:02 PM
What happens when you lose your job and cant make payments towards your WL policy?
What happens to all other payments when you lose your job? Housing? Medical insurance? Utility Bills, etc.?

If the policy was properly overfunded, and especially if the policy is (even partially) seasoned, the policy will have enough to self support itself through the hard time. Also, if policy was set up with regular overfunding, it's easier to dial down the premium amount while keeping the coverage unaffected.
From what I gathered after sitting down with a LIA today is that in the first 4 years, one would lose everything they put in (Not so with retirement accounts.) and that the break even point would be in year 11.
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 27, 2020, 10:07:47 PM
Here is another way to look at this:

Prepaying a (presumably fixed rate) mortgage converts a guaranteed CASH LIQUID asset into non-guaranteed, illiquid HOME EQUITY.

Now I know that when home prices are rising and banks are easily giving HELOCs, many people might not realize the risks involved. But remember that HELOCs can be frozen, shut down, or simply not offerred at any time the banks don't want to lend. Also, while we've seen an outstanding increase in home values (especially in BKLN and LKWD), prices don't always go up (they are possibly a little down from their peak). And here's something many people miss - prepaying a mortgage is irrelevant to your net worth, I actually know people that were kicking themselves for not having larger mortgage balances during the Making Home Affordable loan modification days.

Also, don't forget tax ramifications.
Care to elaborate?
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 27, 2020, 10:12:39 PM
This, and its about the freedom one has when the pressure of paying monthly bills is removed. (not in the sense of freedom to stop working but the freedom to be able to search for the right opportunities without the pressure on your head of making ends meet)

obviously there are some expenses that will never disappear.

So now that we agree on that. What's there to argue about? Based on that argument, the Dave Ramsey Plan should be instructing people to purchase heavily overfunded Whole Life insurance in a way that it's either fully paid off or self sustaining in 10 years or less. No more life insurance bills to worry about. And peace of mind of having coverage that will never expire.
Do you market WL as life insurance or an investment?
Title: Re: Dave Ramsey Plan
Post by: aygart on July 27, 2020, 10:14:19 PM
Care to elaborate?
You are paying off pricipal dollar for dollar.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 27, 2020, 10:15:06 PM
Do you market WL as life insurance or an investment?
I would guess as an investment with a side benefit of free LI included.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 27, 2020, 10:21:20 PM
Probably basic financial skills, learning a budget and the like.
Just understanding some of the basics will help many.
You are paying off pricipal dollar for dollar.
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 27, 2020, 10:34:33 PM
You are paying off pricipal dollar for dollar.
Because you greatly reduced your risk of foreclosure when you don't have a mortgage.

Also, is the choice between paying off your mortgage vs investing, or paying off your mortgage vs buying a nicer car?
well said.
Here's something many people miss-for the vast majority of people ( I would be comfortable saying well over 90%) the other choice wouldn't be "wow, we saved an extra $450 this month, let's invest it" rather at the end of the month they ask "WTH is that extra money?" So paying towards one house is relevant to one's net worth, and is one of the tools to build wealth and retire with dignity. 
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 27, 2020, 10:37:29 PM
Here's something many people miss-for the vast majority of people ( I would be comfortable saying well over 90%) the other choice wouldn't be "wow, we saved an extra $450 this month, let's invest it" rather at the end of the month they ask "WTH is that extra money?" So paying towards one house is relevant to one's net worth, and is one of the tools to build wealth and retire with dignity.
Does paying off your house really build wealth?
Title: Re: Dave Ramsey Plan
Post by: aygart on July 27, 2020, 10:38:49 PM
Here's something many people miss-for the vast majority of people ( I would be comfortable saying well over 90%) the other choice wouldn't be "wow, we saved an extra $450 this month, let's invest it" rather at the end of the month they ask "WTH is that extra money?" So paying towards one house is relevant to one's net worth, and is one of the tools to build wealth and retire with dignity. 
That comes down to the behavioral aspect of it not which makes more financial sense. If someone is otherwise blowing it on stupidity then they are better off paying down their mortgage. If they have the disipline to invest it that would be better.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 27, 2020, 10:39:50 PM
Does paying off your house really build wealth?
Not one penny more than the saved interest. THe appreciation was yours before paying off the mortgage as well.
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on July 27, 2020, 10:40:51 PM
Not one penny more than the saved interest. THe appreciation was yours before paying off the mortgage as well.
There is always a risk of foreclosure.
For the record I would never count appreciation on a net worth statement, solely the equity. 
That comes down to the behavioral aspect of it not which makes more financial sense. If someone is otherwise blowing it on stupidity then they are better off paying down their mortgage. If they have the disipline to invest it that would be better.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 27, 2020, 10:41:45 PM
Not one penny more than the saved interest. THe appreciation was yours before paying off the mortgage as well.
Keep the financial basics coming!
Title: Re: Dave Ramsey Plan
Post by: aygart on July 27, 2020, 10:45:36 PM
There is always a risk of foreclosure.
For the record I would never count appreciation on a net worth statement, solely the equity. 
WHat is the equity? It is the CURRENT value of the house minus the amount owed.

That it makes financial sense to do over blowing it does not mean it builds wealth it means it is preserving wealth. Preventing foreclosure is also not building wealth but preserving wealth.

Building>preserving>losing
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 27, 2020, 10:49:00 PM
For the record I would never count appreciation on a net worth statement, solely the equity.
How do you figure the value of a house when it is paid off for your net worth?
Title: Re: Dave Ramsey Plan
Post by: aygart on July 27, 2020, 10:49:39 PM
Keep the financial basics coming!
Why would you think that people who have a difficult time keeping to facts regarding other things would do any better when it comes to finance? We can talk about financial basics until we are blue in the face and it won't help any more than talking about science regarding other topics.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 27, 2020, 10:51:29 PM
Why would you think that people who have a difficult time keeping to facts regarding other things would do any better when it comes to finance?
Hopefully they will understand it is in their best interest to learn.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 27, 2020, 10:52:49 PM
We can talk about financial basics until we are blue in the face and it won't help any more than talking about science regarding other topics.
I disagree. Lets see if anyone disputes the dollar for dollar when paying off early.
Title: Re: Dave Ramsey Plan
Post by: aygart on July 27, 2020, 10:56:24 PM
Hopefully they will understand it is in their best interest to learn.
Just like they all do regarding health?
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 27, 2020, 10:56:59 PM
Lets see if anyone disputes the dollar for dollar when paying off early.

No one who had listened to any DR would dispute that.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 27, 2020, 10:59:58 PM
No one who had listened to any DR would dispute that.
DR or not if you didn't understand this hopefully after you give it some thought it would be clear.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 27, 2020, 11:14:58 PM
Paying off a mortgage, other than the interest saved, is exchanging one type of asset (guaranteed, liquid cash) for another type (illiquid, non-guaranteed equity in real estate).
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 27, 2020, 11:20:03 PM
From what I gathered after sitting down with a LIA today is that in the first 4 years, one would lose everything they put in (Not so with retirement accounts.) and that the break even point would be in year 11.

Highly untrue with an OVERFUNDED Whole Life policy.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 27, 2020, 11:22:25 PM
Do you market WL as life insurance or an investment?
Definitely Life Insurance. But it's difficult to ignore the benefits on the asset side of one's personal balance sheet.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 27, 2020, 11:23:40 PM
Definitely Life Insurance.
Are you allowed to market it as an investment?
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 27, 2020, 11:28:34 PM
From what I gathered after sitting down with a LIA today is that in the first 4 years, one would lose everything they put in (Not so with retirement accounts.) and that the break even point would be in year 11.

When is your break even with a home purchase/mortgage? I.e. When does your equity equal or exceed the sum of your payments (and please don't disregard closing costs)?
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 27, 2020, 11:30:23 PM
Are you allowed to market it as an investment?

I've heard of you being the Sheriff of certain DDF threads, have you now become a compliance officer?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 27, 2020, 11:31:53 PM
I've heard of you being the Sheriff of certain DDF threads, have you now become a compliance officer?
Was wondering if what I heard was true.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 27, 2020, 11:35:41 PM
Was wondering if what I heard was true.

I don't think I would ever get in trouble with compliance over what I say about products during a sales process. If anything I tend to over disclaim (which doesn't mean that the client will not selectively hear or remember, and why written notes are of utmost importance).
Title: Re: Dave Ramsey Plan
Post by: yos9694 on July 28, 2020, 02:15:19 PM
What would (or does) DR say about the US national debt? If the next stimulus bill passes we will be $27.6 Trillion in debt, which is 137.6% of GDP. If we have to do it, then we have to do it, but how do we get out of here without bankruptcy?
Title: Re: Dave Ramsey Plan
Post by: avromie7 on July 28, 2020, 02:17:25 PM
If the next stimulus bill passes we will be $27.6 Trillion in debt, which is 137.6% of GDP. If we have to do it, then we have to do it, but how do we get out of here without bankruptcy?
The answer is simple, getting it done is the hard part. Drastically scale back government spending
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 28, 2020, 02:21:06 PM
The answer is simple, getting it done is the hard part. Drastically scale back government spending

ROTFLMAO....

There's only one way out of this kind of a debt hole. It's been tried and tested for thousands of years. Hint (https://www.amazon.com/This-Time-Different-Centuries-Financial/dp/0691152640) (Though R&R don't seem to say thousands, only hundreds).
Title: Re: Dave Ramsey Plan
Post by: whYME on July 28, 2020, 02:40:00 PM
Hint (https://www.amazon.com/This-Time-Different-Centuries-Financial/dp/0691152640)
tl;dr?
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 28, 2020, 02:47:13 PM
tl;dr?

In today's day and age, there's no need to actually read the book to know what it's about. There's been enough publicity of this dissertation to the extent that just mentioning R&R brings it to mind.
Title: Re: Dave Ramsey Plan
Post by: whYME on July 28, 2020, 03:01:55 PM
There's been enough publicity of this dissertation to the extent that just mentioning R&R brings it to mind.
I'll take your word for it (https://emoji.tapatalk-cdn.com/emoji53.png)
Title: Re: Dave Ramsey Plan
Post by: David61 on July 28, 2020, 11:42:03 PM
Not one penny more than the saved interest. THe appreciation was yours before paying off the mortgage as well.

The saved interest PLUS the portion of the money you would have squandered frivolously, PLUS the habit setting practice of prioritizing long-term financial health over instant gratification.
Title: Re: Dave Ramsey Plan
Post by: AussieMan on July 29, 2020, 10:14:34 AM
Paying off a mortgage, other than the interest saved, is exchanging one type of asset (guaranteed, liquid cash) for another type (illiquid, non-guaranteed equity in real estate).
Does this apply if every dollar of principal gets added to HELOC?
Title: Re: Dave Ramsey Plan
Post by: AussieMan on July 29, 2020, 10:25:18 AM
Do behavioral aspect of financial planning ever outweigh the actual financial benefits? Do they have some value?
 
Case in point when deciding which retirement account to use, in Canada there is TFSA and RRSP - simialr to Roth IRA and 401K
Main difference between TFSA and roth IRA is that TFSA you can withdraw at any point tax free not only in retirement.

1)If TFSA makes more financial sense (based on current and future tax bracket estimates), but isn't actually forced savings, would one recommend RRSP for the forced savings, or at least give that some value.
2) If RRSP makes more financial sense but since it's locked up is highly illiquid, (is that even a word @ExGingi) would you recommend TFSA for liquidity.

 
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 29, 2020, 12:11:45 PM
The saved interest PLUS the portion of the money you would have squandered frivolously, PLUS the habit setting practice of prioritizing long-term financial health over instant gratification.

None of those have anything whatsoever to do with math.

If you would take the same amount and put it somewhere where it would grow by more than the interest saves, and would go towards building wealth and possibly provide other benefits, why would it make sense to prepay one's mortgage?
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 29, 2020, 12:16:39 PM
Do behavioral aspect of financial planning ever outweigh the actual financial benefits? Do they have some value?
 
Case in point when deciding which retirement account to use, in Canada there is TFSA and RRSP - simialr to Roth IRA and 401K
Main difference between TFSA and roth IRA is that TFSA you can withdraw at any point tax free not only in retirement.

1)If TFSA makes more financial sense (based on current and future tax bracket estimates), but isn't actually forced savings, would one recommend RRSP for the forced savings, or at least give that some value.
2) If RRSP makes more financial sense but since it's locked up is highly illiquid, (is that even a word @ExGingi) would you recommend TFSA for liquidity.

I claim total ignorance of Canadian plans, laws, and taxes.

AFAIK illiquid is a word, but I believe the ultimate arbiter for the English language 'round here is @Yehuda57.

Mathematically, if everything else remains constant (if you think that is a fact, I have a bridge to sell you) there is no difference between a ROTH IRA and a Traditional IRA. However there are even some built-in differences that make sure that things won't be constant. For example, a traditional IRA has RMDs which a ROTH IRA doesn't. Those RMDs can have a significant impact at retirement. Other types of planning which require asset transfers are easier (and won't affect taxes at that point) with ROTH IRA (after age 59.5) than with traditional IRAs.
Title: Re: Dave Ramsey Plan
Post by: AussieMan on July 29, 2020, 01:18:17 PM
I claim total ignorance of Canadian plans, laws, and taxes.


So theoretically, all other things equal - is money that is locked up until retirement
1) Good - forces less consumption
2) Bad - why make it illiquid if not needed
3) Somewhere in the middle
Title: Re: Dave Ramsey Plan
Post by: yungermanchik on July 29, 2020, 01:21:56 PM
So theoretically, all other things equal - is money that is locked up until retirement
1) Good - forces less consumption For people with NO self discipline
2) Bad - why make it illiquid if not needed For people with self discipline, who know how to would invest in better short term investments
3) Somewhere in the middle For people with self discipline, who don't know how to wouldn't invest in better short term investments
@ExGingi am I right?
Title: Re: Dave Ramsey Plan
Post by: AussieMan on July 29, 2020, 01:35:45 PM
@ExGingi am I right?
The money in the retirement account is obviously also invested, the question is, is making it untouchable good or bad.
The only way it's bad is if at some point you would need the money and have to withdraw it early, and then suffer consequences.

The thing is, people may write the "right" answer, even though they know that it's not practical. Risk tolerance is an emotional financial concern, and I'm suggesting that making funds untouchable could be be as well.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 29, 2020, 01:43:09 PM
@ExGingi am I right?

Is there a right or wrong?  Only about facts. Here you're talking about emotions and psychology.

As to the facts. Again, I don't know anything about Canadian laws or programs, but in the US a traditional IRA isn't illiquid. There are consequences such as taxes and penalties which are applicable, but in general if a request goes through before market close, the funds could be available by the next business day (or two). I don't call that illiquid, there are just some fences around it.

With a 401k there's usually easier access in the form of loans.

CARES act created huge access opportunities to almost all retirement accounts.
Title: Re: Dave Ramsey Plan
Post by: Yehuda57 on July 29, 2020, 02:51:16 PM
A little ironic that I got tagged in a thread that started after I quit DDF about a topic I got into since I quit  :)

I read some of the thread, but not all, so forgive me if I'm repeating things.

1) DR is catering to people who are stuck in debt. These are people who made mistakes and didn't know how to handle money. If they had good financial planning knowledge, they wouldn't be in the mess in the first place. Saying something like "Why would you pay off lower interest first?" and following that up with "I've always had financial freedome [and never been in debt]" shows you aren't the DR target.

Take me for example, and I'm saying this even though I'm not anonymous. I found DD and started opening up credit cards and earning miles. It was awesome. Did a whole bunch of things I could never have afforded. Paid my bills on time, had a amazing credit score without a penny to my name. Life happened. Expenses ended up being more than I was earning. One job cut my salary by 40% rather than fire me outright. I was never an extravagant spender, don't have a car, live in a small apartment, but the CC bills became unpayable. I did 0% balance transfers and was treading water for a while. Then I missed a payment on one card. Then another on a different card. Before I knew it I was 80k in the whole, with no shovel to dig out of it.

I hate to say it, but I worry that more DD(F)ers fell into this than we like to imagine. No CC farms, no swiping scams, just spending more than we can afford to on high interest CCs.

2) As such, the DR advice is not necessarily the most mathermatically sound advice. He says so himself. It's behavioral. It's about planning, budgeting, and being in control. It is absolutely beneficial for the kinds of people in point 1 above to pay off a smaller debts earlier, even if it is lower intrest. The whole point is to change behaviour, not be the most optimal mathematical plan.

3) I have learned his plan without reading his book (though I could, for free, at the library) or paying him a penny. I've listened to him on youtube and I got the picture. The fact that he has built a multi million dollar self help and media empire doesn't mean he preys on anyone. And even if it would have cost me $100 to learn his plan, it would have been the best $100 I'd have ever spent.

4) Some people have mentioned $1000 not being enough of an emergency fund. True, that's why it's called a *beginners* emergency fund. Step 3 grows that to 3-6 months of expenses.

5) All the talk of WL vs Mutual funds, etc. - once you get into step 4,5 & 6 you should be speaking to an advisor who can go through the options with you.

Thank G-d, I should be debt free within a month, and complete step 3 soon after that. Then I can come back to DDF to hear the outcome of the arguements for step 4, 5 and 6. :)
Title: Re: Dave Ramsey Plan
Post by: ExGingi on July 29, 2020, 02:58:38 PM
A little ironic that I got tagged in a thread that started after I quit DDF about a topic I got into since I quit  :)

I read some of the thread, but not all, so forgive me if I'm repeating things.

1) DR is catering to people who are stuck in debt. These are people who made mistakes and didn't know how to handle money. If they had good financial planning knowledge, they wouldn't be in the mess in the first place. Saying something like "Why would you pay off lower interest first?" and following that up with "I've always had financial freedome [and never been in debt]" shows you aren't the DR target.

Take me for example, and I'm saying this even though I'm not anonymous. I found DD and started opening up credit cards and earning miles. It was awesome. Did a whole bunch of things I could never have afforded. Paid my bills on time, had a amazing credit score without a penny to my name. Life happened. Expenses ended up being more than I was earning. One job cut my salary by 40% rather than fire me outright. I was never an extravagant spender, don't have a car, live in a small apartment, but the CC bills became unpayable. I did 0% balance transfers and was treading water for a while. Then I missed a payment on one card. Then another on a different card. Before I knew it I was 80k in the whole, with no shovel to dig out of it.

I hate to say it, but I worry that more DD(F)ers fell into this than we like to imagine. No CC farms, no swiping scams, just spending more than we can afford to on high interest CCs.

2) As such, the DR advice is not necessarily the most mathermatically sound advice. He says so himself. It's behavioral. It's about planning, budgeting, and being in control. It is absolutely beneficial for the kinds of people in point 1 above to pay off a smaller debts earlier, even if it is lower intrest. The whole point is to change behaviour, not be the most optimal mathematical plan.

3) I have learned his plan without reading his book (though I could, for free, at the library) or paying him a penny. I've listened to him on youtube and I got the picture. The fact that he has built a multi million dollar self help and media empire doesn't mean he preys on anyone. And even if it would have cost me $100 to learn his plan, it would have been the best $100 I'd have ever spent.

4) Some people have mentioned $1000 not being enough of an emergency fund. True, that's why it's called a *beginners* emergency fund. Step 3 grows that to 3-6 months of expenses.

5) All the talk of WL vs Mutual funds, etc. - once you get into step 4,5 & 6 you should be speaking to an advisor who can go through the options with you.

Thank G-d, I should be debt free within a month, and complete step 3 soon after that. Then I can come back to DDF to hear the outcome of the arguements for step 4, 5 and 6. :)

Great post, and very emotional. Kudos. You were tagged for your mastery of the English language, and ended up writing a great post which I can only agree with about the practical application of DR vs the mathematical correctness, while making some typos along the way, and ignoring the question for which you were tagged.  ;)
Title: Re: Dave Ramsey Plan
Post by: yeshivabucher on July 29, 2020, 04:58:57 PM
A little ironic that I got tagged in a thread that started after I quit DDF about a topic I got into since I quit  :)

I read some of the thread, but not all, so forgive me if I'm repeating things.

1) DR is catering to people who are stuck in debt. These are people who made mistakes and didn't know how to handle money. If they had good financial planning knowledge, they wouldn't be in the mess in the first place. Saying something like "Why would you pay off lower interest first?" and following that up with "I've always had financial freedome [and never been in debt]" shows you aren't the DR target.

Take me for example, and I'm saying this even though I'm not anonymous. I found DD and started opening up credit cards and earning miles. It was awesome. Did a whole bunch of things I could never have afforded. Paid my bills on time, had a amazing credit score without a penny to my name. Life happened. Expenses ended up being more than I was earning. One job cut my salary by 40% rather than fire me outright. I was never an extravagant spender, don't have a car, live in a small apartment, but the CC bills became unpayable. I did 0% balance transfers and was treading water for a while. Then I missed a payment on one card. Then another on a different card. Before I knew it I was 80k in the whole, with no shovel to dig out of it.

I hate to say it, but I worry that more DD(F)ers fell into this than we like to imagine. No CC farms, no swiping scams, just spending more than we can afford to on high interest CCs.

2) As such, the DR advice is not necessarily the most mathermatically sound advice. He says so himself. It's behavioral. It's about planning, budgeting, and being in control. It is absolutely beneficial for the kinds of people in point 1 above to pay off a smaller debts earlier, even if it is lower intrest. The whole point is to change behaviour, not be the most optimal mathematical plan.

3) I have learned his plan without reading his book (though I could, for free, at the library) or paying him a penny. I've listened to him on youtube and I got the picture. The fact that he has built a multi million dollar self help and media empire doesn't mean he preys on anyone. And even if it would have cost me $100 to learn his plan, it would have been the best $100 I'd have ever spent.

4) Some people have mentioned $1000 not being enough of an emergency fund. True, that's why it's called a *beginners* emergency fund. Step 3 grows that to 3-6 months of expenses.

5) All the talk of WL vs Mutual funds, etc. - once you get into step 4,5 & 6 you should be speaking to an advisor who can go through the options with you.

Thank G-d, I should be debt free within a month, and complete step 3 soon after that. Then I can come back to DDF to hear the outcome of the arguements for step 4, 5 and 6. :)
Thanks for sharing; definitely opened my eyes a lot more just by reading this
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 29, 2020, 11:20:33 PM
I hate to say it, but I worry that more DD(F)ers fell into this than we like to imagine.

If you are making a list you can add me. Similar situation, and just finished step 3. Trying to figure out 4,5 and 6 now
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 29, 2020, 11:25:56 PM

Thank G-d, I should be debt free within a month, and complete step 3 soon after that.

Let us know when to be listening for your Debt Free Scream...
Title: Re: Dave Ramsey Plan
Post by: Yehuda57 on July 30, 2020, 12:46:31 PM
If you are making a list you can add me. Similar situation, and just finished step 3. Trying to figure out 4,5 and 6 now

I think it's fair to say @zh cohen is an intelligent person. These issues are not born of a lack of IQ.

@Dan often writes disclaimers about using credit cards as one would use cash. I read them, understood them, and agreed with them. I've since wondered if reading real life stories of people who, like me, started with that intention but ended up in an uncontrollable downward spiral would have helped, or if I'd have nodded in agreement and proceeded without a plan or control.

What definitely has not helped is the mocking and scolding the few who have posted questions about their debt on this forum have received.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 30, 2020, 01:10:06 PM
I think it's fair to say @zh cohen is an intelligent person. These issues are not born of a lack of IQ.
IQ was never a question when it came to this issue.
What definitely has not helped is the mocking and scolding the few who have posted questions about their debt on this forum have received.
If anything I said has come off as mocking or scolding I apologize in advance.
My beef is with the person (DR) and some of the financial part of his course, not any member taking his course.
@Dan often writes disclaimers about using credit cards as one would use cash. I read them, understood them, and agreed with them. I've since wondered if reading real life stories of people who, like me, started with that intention but ended up in an uncontrollable downward spiral would have helped, or if I'd have nodded in agreement and proceeded without a plan or control.
Your story and others will/would help.
I think the problem is we never know beforehand how it (CC game) effects an individual.

Great to see you posting again even if it is short lived.
Title: Re: Dave Ramsey Plan
Post by: zh cohen on July 30, 2020, 01:18:41 PM
I think it's fair to say @zh cohen is an intelligent person.

Thanks for the compliment

I think the problem is we never know beforehand how it (CC game) effects an individual.

Even someone who manages well for many years, can get in trouble when their life circumstances change (as was in @Yehuda57 and my case).
Title: Re: Dave Ramsey Plan
Post by: Dan on July 30, 2020, 01:21:05 PM
I haven't been following this thread at all, but thanks for the tag and thanks for sharing @Yehuda57.

LMK if you want to write a post for DDMS of the steps you took to climb out of debt and what (if anything?) you could have done differently when falling into debt.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on July 30, 2020, 01:24:16 PM
LMK if you want to write a post for DDMS of the steps you took to climb out of debt and what (if anything?) you could have done differently when falling into debt.
The pitfalls to look out for would be helpful.
Title: Re: Dave Ramsey Plan
Post by: Yehuda57 on July 30, 2020, 02:01:11 PM
If anything I said has come off as mocking or scolding I apologize in advance.
My beef is with the person (DR) and some of the financial part of his course, not any member taking his course. Your story and others will/would help.
I think the problem is we never know beforehand how it (CC game) effects an individual.

Great to see you posting again even if it is short lived.

I didn't have you in mind with the mocking and scolding, and it wasn't in this thread.

I did have you in mind with my comments about DR. I think your "beef" stems from a fundamental misunderstanding of it being an emotional/behavioral answer to what you see as a mathematical problem.

I haven't been following this thread at all, but thanks for the tag and thanks for sharing @Yehuda57.

LMK if you want to write a post for DDMS of the steps you took to climb out of debt and what (if anything?) you could have done differently when falling into debt.

I'll try put something together, bl"n.

One thing I think is commendable is that you have always posted warnings about the pitfalls of credit cards, even though it's something you make money off.
Title: Re: Dave Ramsey Plan
Post by: Dan on July 30, 2020, 02:11:08 PM
One thing I think is commendable is that you have always posted warnings about the pitfalls of credit cards, even though it's something you make money off.
I never saw that as mutually exclusive.
Title: Re: Dave Ramsey Plan
Post by: Joe4007 on August 02, 2020, 03:03:59 AM
IRA limit increased to 6k, or 12k per couple.

Many people in this situation have access to a 401k, with a contribution limit of 19.5k. You can lower income by up to 31.5k, that should be more than enough to get off of programs.
CMIIW, but I believe NY State of Health uses MAGI which includes IRA contributions.
Title: Re: Dave Ramsey Plan
Post by: gozalim on August 02, 2020, 09:53:09 AM
CMIIW, but I believe NY State of Health uses MAGI which includes IRA contributions.
IINM IRA (not Roth) deducts from MAGI
Title: Re: Dave Ramsey Plan
Post by: avromie7 on August 02, 2020, 10:11:53 AM
IINM IRA (not Roth) deducts from MAGI
I thought so too, but it looks like not. 401k deductions do lower MAGI.

Not all programs use MAGI, for example EITC is based on AGI. Health insurance tax credits are based on MAGI, but you don't take out IRA deductions.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on August 02, 2020, 10:43:29 AM
I thought so too, but it looks like not. 401k deductions do lower MAGI.

Not all programs use MAGI, for example EITC is based on AGI. Health insurance tax credits are based on MAGI, but you don't take out IRA deductions.

Based on https://www.healthcare.gov/glossary/modified-adjusted-gross-income-magi/

IRA contributions do not get added back to AGI to arrive at MAGI for ACA.
Title: Re: Dave Ramsey Plan
Post by: Joe4007 on August 02, 2020, 10:57:49 AM


Based on https://www.healthcare.gov/glossary/modified-adjusted-gross-income-magi/

IRA contributions do not get added back to AGI to arrive at MAGI for ACA.

That seems to be a fairly basic description of MAGI. If you dig a little deeper, you get to https://www.healthcare.gov/reporting-deductions/ which suggests you do have to include IRA contributions as income.
Title: Re: Dave Ramsey Plan
Post by: avromie7 on August 02, 2020, 11:07:21 AM

That seems to be a fairly basic description of MAGI. If you dig a little deeper, you get to https://www.healthcare.gov/reporting-deductions/ which suggests you do have to include IRA contributions as income.
The healthcare.gov website is really confusing, I believe it's saying 2 things
1) Report IRA deductions
2) Don't report child or dependant care expenses.
Title: Re: Dave Ramsey Plan
Post by: gozalim on August 02, 2020, 11:41:55 AM
To simplify:
Which line in the tax return do they ask for?
And how does turbo tax compute that line ?
Title: Re: Dave Ramsey Plan
Post by: ExGingi on August 02, 2020, 01:52:51 PM
The healthcare.gov website is really confusing, I believe it's saying 2 things
1) Report IRA deductions
2) Don't report child or dependant care expenses.

It looks somewhat confusing when viewing on a mobile browser, but looking at it on a desktop browser there is no confusion whatsoever in my mind.

And

Based on https://www.healthcare.gov/glossary/modified-adjusted-gross-income-magi/

IRA contributions do not get added back to AGI to arrive at MAGI for ACA.

is accurate.

https://www.healthcare.gov/reporting-deductions/

(https://i.imgur.com/P41g4S2.png)

Also see:
http://laborcenter.berkeley.edu/pdf/2019/magi.pdf (attached to this post)
Title: Re: Dave Ramsey Plan
Post by: Joe4007 on August 02, 2020, 06:28:57 PM
It looks somewhat confusing when viewing on a mobile browser, but looking at it on a desktop browser there is no confusion whatsoever in my mind.

And

is accurate.

https://www.healthcare.gov/reporting-deductions/

(https://i.imgur.com/P41g4S2.png)

Also see:
http://laborcenter.berkeley.edu/pdf/2019/magi.pdf (attached to this post)
According to what you highlighted, you can only deduct IRA contributions if you don't have a work retirement account, so again no 401k AND IRA.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on August 02, 2020, 06:36:34 PM
According to what you highlighted, you can only deduct IRA contributions if you don't have a work retirement account, so again no 401k AND IRA.

That's pretty obvious. That is also how it works on the taxation end.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on August 02, 2020, 06:41:32 PM
According to what you highlighted, you can only deduct IRA contributions if you don't have a work retirement account, so again no 401k AND IRA.

I just now went back to the post that triggered the current discussion, and it is obviously mistaken.

IRA limit increased to 6k, or 12k per couple.

Many people in this situation have access to a 401k, with a contribution limit of 19.5k. You can lower income by up to 31.5k, that should be more than enough to get off of programs.

If contributing 19.5k to a 401k one cannot contribute an additional deductible 12k per couple into IRAs, except if total household income for married filing jointly is under $104,000
Title: Re: Dave Ramsey Plan
Post by: Joe4007 on August 02, 2020, 06:42:07 PM
That's pretty obvious. That is also how it works on the taxation end.
That depends on your income. You could do both up to a certain threshold.
Title: Re: Dave Ramsey Plan
Post by: avromie7 on August 02, 2020, 06:44:54 PM
I just now went back to the post that triggered the current discussion, and it is obviously mistaken.

If contributing 19.5k to a 401k one cannot contribute an additional deductible 12k per couple into IRAs.
You're correct, I made a mistake. The second spouse can still contribute $6k to an IRA.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on August 02, 2020, 06:45:24 PM
That depends on your income. You could do both up to a certain threshold.

Not as far as I can recall, unless things changed.

Source?
Title: Re: Dave Ramsey Plan
Post by: Joe4007 on August 02, 2020, 06:46:20 PM
Not as far as I can recall, unless things changed.

Source?
https://www.investopedia.com/ask/answers/07/401(k)_ira.asp
Title: Re: Dave Ramsey Plan
Post by: ExGingi on August 02, 2020, 06:52:35 PM
https://www.investopedia.com/ask/answers/07/401(k)_ira.asp

I stand corrected. It does depend on income

https://www.irs.gov/retirement-plans/plan-participant-employee/2020-ira-contribution-and-deduction-limits-effect-of-modified-agi-on-deductible-contributions-if-you-are-covered-by-a-retirement-plan-at-work

Household income would need to be under $104,000 to make it fully deductible.

But now going back to ACA eligibility, I am not sure that it would be treated any different than on the tax side.
Title: Re: Dave Ramsey Plan
Post by: Joe4007 on August 02, 2020, 07:03:20 PM
I stand corrected. It does depend on income

https://www.irs.gov/retirement-plans/plan-participant-employee/2020-ira-contribution-and-deduction-limits-effect-of-modified-agi-on-deductible-contributions-if-you-are-covered-by-a-retirement-plan-at-work

Household income would need to be under $104,000 to make it fully deductible.

But now going back to ACA eligibility, I am not sure that it would be treated any different than on the tax side.
Well, it explicitly says no work retirement account and they're pretty much talking about households earning less than 104k.
Title: Re: Dave Ramsey Plan
Post by: 12HRS on August 03, 2020, 01:01:14 AM
You're correct, I made a mistake. The second spouse can still contribute $6k to an IRA.

how many spouses are there?
Title: Re: Dave Ramsey Plan
Post by: avromie7 on August 03, 2020, 09:22:18 AM
how many spouses are there?
Whoops, I meant "the spouse".
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on November 11, 2020, 12:53:05 PM
A little ironic that I got tagged in a thread that started after I quit DDF about a topic I got into since I quit  :)

I read some of the thread, but not all, so forgive me if I'm repeating things.

1) DR is catering to people who are stuck in debt. These are people who made mistakes and didn't know how to handle money. If they had good financial planning knowledge, they wouldn't be in the mess in the first place. Saying something like "Why would you pay off lower interest first?" and following that up with "I've always had financial freedome [and never been in debt]" shows you aren't the DR target.

Take me for example, and I'm saying this even though I'm not anonymous. I found DD and started opening up credit cards and earning miles. It was awesome. Did a whole bunch of things I could never have afforded. Paid my bills on time, had a amazing credit score without a penny to my name. Life happened. Expenses ended up being more than I was earning. One job cut my salary by 40% rather than fire me outright. I was never an extravagant spender, don't have a car, live in a small apartment, but the CC bills became unpayable. I did 0% balance transfers and was treading water for a while. Then I missed a payment on one card. Then another on a different card. Before I knew it I was 80k in the whole, with no shovel to dig out of it.

I hate to say it, but I worry that more DD(F)ers fell into this than we like to imagine. No CC farms, no swiping scams, just spending more than we can afford to on high interest CCs.

2) As such, the DR advice is not necessarily the most mathermatically sound advice. He says so himself. It's behavioral. It's about planning, budgeting, and being in control. It is absolutely beneficial for the kinds of people in point 1 above to pay off a smaller debts earlier, even if it is lower intrest. The whole point is to change behaviour, not be the most optimal mathematical plan.

3) I have learned his plan without reading his book (though I could, for free, at the library) or paying him a penny. I've listened to him on youtube and I got the picture. The fact that he has built a multi million dollar self help and media empire doesn't mean he preys on anyone. And even if it would have cost me $100 to learn his plan, it would have been the best $100 I'd have ever spent.

4) Some people have mentioned $1000 not being enough of an emergency fund. True, that's why it's called a *beginners* emergency fund. Step 3 grows that to 3-6 months of expenses.

5) All the talk of WL vs Mutual funds, etc. - once you get into step 4,5 & 6 you should be speaking to an advisor who can go through the options with you.

Thank G-d, I should be debt free within a month, and complete step 3 soon after that. Then I can come back to DDF to hear the outcome of the arguements for step 4, 5 and 6. :)
What a great post.
Title: Re: Dave Ramsey Plan
Post by: zh cohen on November 11, 2020, 08:31:36 PM
I'll try put something together, bl"n.

Any chance we get this?

(And thanks @Kobe Bryant for bumping this thread)
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on November 12, 2020, 12:01:08 AM
@Yehuda57 embodies this quote from DR “A man with an experience is not at the mercy of a man with an opinion.”
Title: Re: Dave Ramsey Plan
Post by: Yehuda57 on November 12, 2020, 11:46:25 AM
Any chance we get this?


I wrote a draft, but as I am not anonymous, it's a little tougher than I thought
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on November 12, 2020, 11:52:22 AM
I wrote a draft, but as I am not anonymous, it's a little tougher than I thought
If I were in your shoes, I wouldn’t.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 12, 2020, 03:33:54 PM
I wrote a draft, but as I am not anonymous, it's a little tougher than I thought
Go for it. It might inspire others that need a push.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 12, 2020, 03:44:22 PM
If I were in your shoes, I wouldn’t.
why not?
Title: Re: Dave Ramsey Plan
Post by: JACKBLUE on November 12, 2020, 03:47:57 PM
I wrote a draft, but as I am not anonymous, it's a little tougher than I thought
Smart, maybe PM if anyone needs it as Chizuk.....
Title: Re: Dave Ramsey Plan
Post by: yuneeq on November 12, 2020, 04:15:40 PM
I wrote a draft, but as I am not anonymous, it's a little tougher than I thought

Put it on a password-protected website, and charge membership to get access :)
Title: Re: Dave Ramsey Plan
Post by: Yehuda57 on November 12, 2020, 04:20:10 PM
Put it on a password-protected website, and charge membership to get access :)

But if I'm not accepting credit cards, how will I get paid?
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 12, 2020, 04:21:17 PM
But if I'm not accepting credit cards, how will I get paid?
he doesn't say don't accept credit cards, he says don't use them. ;)
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on November 12, 2020, 04:21:45 PM
But if I'm not accepting credit cards, how will I get paid?
Debit cards.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 12, 2020, 04:26:06 PM
But if I'm not accepting credit cards, how will I get paid?
I will collect for you.  ;)
Title: Re: Dave Ramsey Plan
Post by: yesitsme on November 12, 2020, 10:03:11 PM
Just post what a friend asked you to post, or can post in my name
Title: Re: Dave Ramsey Plan
Post by: Yehuda57 on November 12, 2020, 11:11:43 PM
Just post what a friend asked you to post, or can post in my name

why not?

Suffice it to say that getting into that much debt impacts many people and aspects in and of your life. An honest telling of my story, which is what a compelling DDMS would require, would mean publicizing details I didn't include in my DDF post, and which I wouldn't want public.
וד"ל
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 13, 2020, 06:58:25 AM
What about how you are progressing? Which step are you tackling now?
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 13, 2020, 07:38:14 AM
Suffice it to say that getting into that much debt impacts many people and aspects in and of your life. An honest telling of my story, which is what a compelling DDMS would require, would mean publicizing details I didn't include in my DDF post, and which I wouldn't want public.
וד"ל
I understand.   When I discuss it with family or people that I'm close with (and I guess now with DDF) I say that yes I messed up, but I messed up early on BH!  This gives me the wisdom and knowledge never to make that same mistake again!
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on November 13, 2020, 07:47:35 AM
“I have a Ph.D in D.U.M.B” DR
Title: Re: Dave Ramsey Plan
Post by: aygart on November 13, 2020, 08:32:06 AM
I understand.   When I discuss it with family or people that I'm close with (and I guess now with DDF) I say that yes I messed up, but I messed up early on BH!  This gives me the wisdom and knowledge never to make that same mistake again!
This is an amazing lesson in life. People mess up, but as long as you are self aware you can recover and end up stronger than you were before! Chazak vematz!
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 13, 2020, 11:31:17 AM
This is an amazing lesson in life. People mess up, but as long as you are self aware you can recover and end up stronger than you were before! Chazak vematz!
:)Thanks! especially when it comes to debt, I see so many people in despair that they continue and make matters worse.
Title: Re: Dave Ramsey Plan
Post by: aygart on November 13, 2020, 01:49:54 PM
:)Thanks! especially when it comes to debt, I see so many people in despair that they continue and make matters worse.
Oh yes! And this is one of the big parts of the DR system-that the user sees a path to get out of their hole. This is also part of the purpose in paying the lowest balance first. What kind of motivator did you find it to be when you got that account down to zero?
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 13, 2020, 01:56:52 PM
Oh yes! And this is one of the big parts of the DR system-that the user sees a path to get out of their hole. This is also part of the purpose in paying the lowest balance first. What kind of motivator did you find it to be when you got that account down to zero?

Just another piece of evidence that finance ≠ math.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 13, 2020, 02:00:04 PM
Oh yes! And this is one of the big parts of the DR system-that the user sees a path to get out of their hole. This is also part of the purpose in paying the lowest balance first. What kind of motivator did you find it to be when you got that account down to zero?
Oh yeah. My spreadsheet is almost done.  Planning the kiddush already ;)

The kiddush is not for out of debt, Its for financial freedom that i gained
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 13, 2020, 02:26:45 PM
Just another piece of evidence that finance ≠ math.
I teach my kids both.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 13, 2020, 02:38:33 PM
I teach my kids both.
Exactly.   If they would equal each other then you would only have to teach one  ;)
Title: Re: Dave Ramsey Plan
Post by: yesitsme on November 13, 2020, 02:40:16 PM
I'm not good at math
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 13, 2020, 02:43:27 PM
Exactly.   If they would equal each other then you would only have to teach one  ;)
...but they go hand in hand. You have to question finance that doesn't make sense math wise.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 13, 2020, 03:16:41 PM
...but they go hand in hand. You have to question finance that doesn't make sense math wise.
Long discussion for a Friday afternoon.  Remind me Monday at lunch time :D
Title: Re: Dave Ramsey Plan
Post by: aygart on November 13, 2020, 04:03:08 PM
...but they go hand in hand. You have to question finance that doesn't make sense math wise.
Otherwise known as behavioral finance
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 13, 2020, 04:09:16 PM
Otherwise known as behavioral finance
...and extremely dangerous.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 14, 2020, 06:48:22 PM
...and extremely dangerous.

6ft under is danger free.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 14, 2020, 10:09:15 PM
...but they go hand in hand. You have to question finance that doesn't make sense math wise.

So are you saying psychology should be questioned?
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on November 14, 2020, 10:26:33 PM
Title: Re: Dave Ramsey Plan
Post by: aygart on November 14, 2020, 11:06:45 PM
So are you saying psychology should be questioned?
...and extremely dangerous.
Title: Re: Dave Ramsey Plan
Post by: Lurker on November 14, 2020, 11:08:09 PM
So are you saying psychology should be questioned?

Always.
Title: Re: Dave Ramsey Plan
Post by: daybyday on November 15, 2020, 12:28:10 AM
I love listening to Dave Ramsey, but i feel like he's better suited for people with lower income. Personally I carry two mortgages and they both generate income b"h.
Why should i hurry to pay off these mortgages instead of searching for more opportunities for income generating properties?
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 15, 2020, 01:00:23 AM
I love listening to Dave Ramsey, but i feel like he's better suited for people with lower income. Personally I carry two mortgages and they both generate income b"h.
Why should i hurry to pay off these mortgages instead of searching for more opportunities for income generating properties?
Paid up property owners were able to weather covid.  People with mortgages had a harder time.  If you build a real estate portfolio on cash, then you can weather every downturn.  Just think of people that lost it all in '08. Etc.   Its a slower growth, but a steady growth. And as your portfolio gets bigger thats when the fun starts because its like a Boulder going downhill as you pick up more rental income without sharing with the bank
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 15, 2020, 01:01:45 AM
I love listening to Dave Ramsey, but i feel like he's better suited for people with lower income. Personally I carry two mortgages and they both generate income b"h.
Why should i hurry to pay off these mortgages instead of searching for more opportunities for income generating properties?

I don't think he's talking about paying off mortgages on investment properties. He's talking about personal residence (I don't think that should necessarily be paid off given today's low interest rates, but some people have a psychological need for it).

I can tell you from the days I was helping people with mortgage modifications, there were a few instances where my best advice for people would be to go 90 days delinquent and then get a modification. Some were afraid at first, but were reassured when I explained the process and the ramifications (and it worked well for them) while one comes to mind that wouldn't do it (but was paying late fees and overdraft fees every month, and had a mortgage with an interest rate over 8%!). 
Title: Re: Dave Ramsey Plan
Post by: aygart on November 15, 2020, 01:04:49 AM
I love listening to Dave Ramsey, but i feel like he's better suited for people with lower income. Personally I carry two mortgages and they both generate income b"h.
Why should i hurry to pay off these mortgages instead of searching for more opportunities for income generating properties?
No plan is for everyone. If you are able to manage debt to be a useful tool then that is great.
Title: Re: Dave Ramsey Plan
Post by: drosenberg88429 on November 15, 2020, 01:15:41 AM
Paid up property owners were able to weather covid.  People with mortgages had a harder time.  If you build a real estate portfolio on cash, then you can weather every downturn.  Just think of people that lost it all in '08. Etc.   Its a slower growth, but a steady growth. And as your portfolio gets bigger thats when the fun starts because its like a Boulder going downhill as you pick up more rental income without sharing with the bank

Leverage gets you more cash on cash returns. What difference does what the bank is making make to you? You're making more money than you would without the leverage.

The ability to float the payments in case of vacancies and a downturn is a different story. Having a contingency plan and not being stretched too tight as to be wiped out by a couple of bad months is key. Paradoxically, you're likely better off taking a bigger mortgage and putting the extra cash in an emergency fund than you are putting in all in initially and keeping mortgage balance as low as possible.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 15, 2020, 01:33:25 AM
Leverage gets you more cash on cash returns. What difference does what the bank is making make to you? You're making more money than you would without the leverage.

The ability to float the payments in case of vacancies and a downturn is a different story. Having a contingency plan and not being stretched too tight as to be wiped out by a couple of bad months is key. Paradoxically, you're likely better off taking a bigger mortgage and putting the extra cash in an emergency fund than you are putting in all in initially and keeping mortgage balance as low as possible.

There's a right balance for everything.

Paying down a mortgage is essentially converting one asset (cash) into another (equity in real estate) while saving the interest cost.

High leverage runs the risk of a wipeout in case the asset value falls. But having the (balance sheet)  equity tied into real estate rather than fully liquid and safe, won't always be advantageous.

Take two hypothetical homeowners. A used his cash to prepay his mortgage, while the B built up cash reserves (possibly in a life insurance policy) and just made his mortgage payments as they came due. In 2008 property values went down by 50%. A had a small 125,000 balance left on his mortgage, but no cash war chest, while B still owed 500,000 on his mortgage but also had a liquid war chest of 200,000. B was able to deploy his war chest opportunisticly and buy a neighboring property out of foreclosure, and was also able to modify his own mortgage, slashing his monthly payments by 40%, while A just felt bad for all the people who could lose their homes to a foreclosure (though he knew of none in his community).
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 15, 2020, 01:42:10 AM
I don't think he's talking about paying off mortgages on investment properties. He's talking about personal residence (I don't think that should necessarily be paid off given today's low interest rates, but some people have a psychological need for it).

I can tell you from the days I was helping people with mortgage modifications, there were a few instances where my best advice for people would be to go 90 days delinquent and then get a modification. Some were afraid at first, but were reassured when I explained the process and the ramifications (and it worked well for them) while one comes to mind that wouldn't do it (but was paying late fees and overdraft fees every month, and had a mortgage with an interest rate over 8%!).
Dave Ramsey says that paying off personal home mortgage is the last step after investments etc. So thats why I assumed he was talking about mortgages in investment properties .
Title: Re: Dave Ramsey Plan
Post by: farmbochur on November 15, 2020, 02:21:33 AM
Dave's opinion on how to invest in real estate

https://www.daveramsey.com/blog/how-to-invest-in-real-estate
Title: Re: Dave Ramsey Plan
Post by: farmbochur on November 15, 2020, 02:30:10 AM
And while we're at it, here's Dave's opinion on cash value insurance.

https://www.daveramsey.com/blog/cash-value-life-insurance
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 15, 2020, 08:01:28 AM
You can argue for the psychological benefit of DR plan. After that you are whistling Dixie!!!
Title: Re: Dave Ramsey Plan
Post by: zh cohen on November 15, 2020, 08:21:57 AM
There's a right balance for everything.

Paying down a mortgage is essentially converting one asset (cash) into another (equity in real estate) while saving the interest cost.

High leverage runs the risk of a wipeout in case the asset value falls. But having the (balance sheet)  equity tied into real estate rather than fully liquid and safe, won't always be advantageous.

Take two hypothetical homeowners. A used his cash to prepay his mortgage, while the B built up cash reserves (possibly in a life insurance policy) and just made his mortgage payments as they came due. In 2008 property values went down by 50%. A had a small 125,000 balance left on his mortgage, but no cash war chest, while B still owed 500,000 on his mortgage but also had a liquid war chest of 200,000. B was able to deploy his war chest opportunisticly and buy a neighboring property out of foreclosure, and was also able to modify his own mortgage, slashing his monthly payments by 40%, while A just felt bad for all the people who could lose their homes to a foreclosure (though he knew of none in his community).

Where did B's other $175,000 go?
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 15, 2020, 12:19:44 PM
Where did B's other $175,000 go?

Could have gone many places, and possibly even spent on lifestyle. But most likely went to pay tuition at Yeshivos and Girls Schools.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 15, 2020, 12:26:16 PM
Dave's opinion on how to invest in real estate

https://www.daveramsey.com/blog/how-to-invest-in-real-estate

He should definitely stick to motivating people to get out of, and stay out of personal debt, and creating a rainy day fund and saving 15% of their income.

I think most successful real-estate investors would agree that buying a property without a mortgage makes sense when there's a significant discount and a bargain to be found due to the availability of an all-cash purchase. Otherwise most real-estate investors tend to leverage their properties, as it is a cheap source of liquidity and can enhance returns.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 15, 2020, 12:27:49 PM
And while we're at it, here's Dave's opinion on cash value insurance.

https://www.daveramsey.com/blog/cash-value-life-insurance

It's pointless to argue about this. He (and Suze Orman) have built themselves a brand with Buy Term and Invest the Difference. No matter what proof one will show otherwise (or in specific cases), they will not concede or it will tarnish their brand.
Title: Re: Dave Ramsey Plan
Post by: drosenberg88429 on November 15, 2020, 12:33:08 PM
Ramsey works with debt addicts. Debt addicts have to avoid leveraged acquisitions the way recovering alcoholics have to avoid a glass of wine with their dinner. For all non addicts, though, there's nothing inherently evil about debt. As long as there's an arbitrage between the amount the debt costs you and the amount of revenue you can generate with that capital, go for it. Just make sure you have contingency plans for debt servicing in case the forecasted revenue stream that is being counted upon to repay the debt dries up.
Title: Re: Dave Ramsey Plan
Post by: avromie7 on November 15, 2020, 12:46:43 PM
Ramsey works with debt addicts. Debt addicts have to avoid leveraged acquisitions the way recovering alcoholics have to avoid a glass of wine with their dinner. For all non addicts, though, there's nothing inherently evil about debt. As long as there's an arbitrage between the amount the debt costs you and the amount of revenue you can generate with that capital, go for it. Just make sure you have contingency plans for debt servicing in case the forecasted revenue stream that is being counted upon to repay the debt dries up.
Most of the anti Dave Ramsey responses here are akin to "but a glass of wine with dinner is healthy"
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 15, 2020, 02:18:06 PM
Ramsey works with debt addicts. Debt addicts have to avoid leveraged acquisitions the way recovering alcoholics have to avoid a glass of wine with their dinner. For all non addicts, though, there's nothing inherently evil about debt. As long as there's an arbitrage between the amount the debt costs you and the amount of revenue you can generate with that capital, go for it. Just make sure you have contingency plans for debt servicing in case the forecasted revenue stream that is being counted upon to repay the debt dries up.
go learn his program and then come back to discuss.

i know people that were never in debt following his advice and method.


and regarding the second part about a contingency plan, I was in that place. Some weird stuff had to happen to my contingency plans to go sour and they did. never got into debt for no reason.
Title: Re: Dave Ramsey Plan
Post by: yesitsme on November 15, 2020, 02:20:03 PM
go learn his program and then come back to discuss.

i know people that were never in debt following his advice and method.
Motivated by?  Are they better off?
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 15, 2020, 02:23:46 PM
Motivated by?  Are they better off?
motivated by seeing family members struggle financially(not with debt) and they want to feel set.

way better off. small salary yet big savings account somehow.  its by being intentional with money.  (now please don't start telling me that people that don't budget properly are intentional with every dollar.)
Title: Re: Dave Ramsey Plan
Post by: yesitsme on November 15, 2020, 02:30:01 PM
Ok fair enough, link please, ok I'll Google it
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 15, 2020, 02:34:40 PM
go learn his program and then come back to discuss.

i know people that were never in debt following his advice and method.
His program has been discussed in depth. If you don't have a problem controlling your finances I would not recommended his flawed program.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 15, 2020, 02:40:23 PM
motivated by seeing family members struggle financially(not with debt) and they want to feel set.

way better off. small salary yet big savings account somehow.  its by being intentional with money.  (now please don't start telling me that people that don't budget properly are intentional with every dollar.)

Being intentional is very important. No-one plans to fail, people fail to plan (and to pay attention to what they are doing). It is true with any resource one has, not only with money.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 15, 2020, 02:41:28 PM
His program has been discussed in depth. If you don't have a problem controlling your finances I would not recommended his flawed program.
you don't control covid,
you dont control a layoff,
you dont control an emergency.

i agree there are many methods and if one doesn't work for you then try the next. and if you want to find flaws you can find flaws in any method
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 15, 2020, 02:42:20 PM
Being intentional is very important. No-one plans to fail, people fail to plan (and to pay attention to what they are doing). It is true with any resource one has, not only with money.
I like that line
Title: Re: Dave Ramsey Plan
Post by: Lurker on November 15, 2020, 02:45:28 PM
Ramsey works with debt addicts. Debt addicts have to avoid leveraged acquisitions the way recovering alcoholics have to avoid a glass of wine with their dinner. For all non addicts, though, there's nothing inherently evil about debt.

This is the best way I've seen DR describe to date.

Most of the anti Dave Ramsey responses here are akin to "but a glass of wine with dinner is healthy"

That's because most responses are from people who, like many non-alcoholics, have no concept of the issue at hand. If I can have a drink, or smoke a joint, or do a line, or do whatever without it completely ruining my life, why should anyone else be different?
Title: Re: Dave Ramsey Plan
Post by: Lurker on November 15, 2020, 02:47:39 PM
you don't control covid,
you dont control a layoff,
you dont control an emergency.

i agree there are many methods and if one doesn't work for you then try the next. and if you want to find flaws you can find flaws in any method

Covid is a bad comparison to the issue of financial management. Just like AA, there are parts of the program that are good for everyone, but a large part of it is tailored for a specific type of person.

(Edited)
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 15, 2020, 02:50:09 PM
you don't control covid,
you dont control a layoff,
you dont control an emergency.

i agree there are many methods and if one doesn't work for you then try the next. and if you want to find flaws you can find flaws in any method
Controlling your finances does not mean you are debt free. I have been through all three of what you listed.
Title: Re: Dave Ramsey Plan
Post by: aygart on November 15, 2020, 03:12:35 PM
you don't control covid,
you dont control a layoff,
you dont control an emergency.

i agree there are many methods and if one doesn't work for you then try the next. and if you want to find flaws you can find flaws in any method
His plan and method is mainly tailored to those having difficulty controlling debt. Someone who does not fit that profile is likely better off with a different plan to fit his profile.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 15, 2020, 04:43:06 PM
His plan and method is mainly tailored to those having difficulty controlling debt. Someone who does not fit that profile is likely better off with a different plan to fit his profile.
I have never tried different plans, and might be interested in learning about others. Im ok with common sense. If something makes sense,  then I can listen. 
Title: Re: Dave Ramsey Plan
Post by: Pad18 on November 15, 2020, 05:11:15 PM
So witch plan you guys will recommend for someone that wants to start learning the basic of investing in general, and in property specifically... ??

Title: Re: Dave Ramsey Plan
Post by: Yehuda57 on November 15, 2020, 06:29:07 PM
Is it DR's moshul? Leveraging is like skinny dipping in high tide. It's all fun and games until the tide recedes and you're caught without pants.
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on November 15, 2020, 06:48:28 PM
Is it DR's moshul? Leveraging is like skinny dipping in high tide. It's all fun and games until the tide recedes and you're caught without pants.
“Only when the tide goes out do you discover who's been swimming naked.“ Warren Buffett
Title: Re: Dave Ramsey Plan
Post by: YoelFried on November 15, 2020, 06:51:52 PM
For all those people that keep on countering the DR plan.

Please try to live three months without any monthly payments, you'll tell me if the plan is right for you.

Debt could sweet up RE purchase, but when you buy with cash and you know you can't borrow not in business and not personal for anything, for some reason you start to think out of the box how to actually create more income or in Re to buy better as the return needs to make sense.

Living a life of feeling good and putting in effort to brainstorm which cc bonus to get to afford a vacation doesn't fit your actual income, I'll rather take my time and figure out how to raise my income and be able to afford it. And geuss what, when you start paying for STUFF with actual money debit card you get decide if the you truly need it or not.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 15, 2020, 06:52:18 PM
Is it DR's moshul? Leveraging is like skinny dipping in high tide. It's all fun and games until the tide recedes and you're caught without pants.

Or like peeing in one's pants, it's warm and cozy at the beginning, but after a while, it's just wet and stinky.

That being said, none of these are good משלים for leverage. (Though they both are good משלים for tax deferral, IMHO, except if there's a clear tax-free exit path).

Leverage can be a very good thing if used properly. I am not going to argue whether homeownership is good or not, but most people think it is good, and leverage is what allows it for the overwhelming majority of people. Countries with no proper functioning mortgage market don't have a high percentage of homeownership. It also enables upward class mobility.

And while I think there are definitely some good points to DR, if leverage is bad, and paying off a mortgage ASAP is the right thing to do, why is it right to buy a house with a mortgage in the first place?
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 15, 2020, 06:55:32 PM
For all those people that keep on countering the DR plan.

Please try to live three months without any monthly payments, you'll tell me if the plan is right for you.

Could you please explain how anyone is able to live without any "monthly payments" (except if someone else is paying for their expenses)?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 15, 2020, 06:57:28 PM
For all those people that keep on countering the DR plan.

Please try to live three months without any monthly payments, you'll tell me if the plan is right for you.
Not sure I follow. I have no debt but have monthly payments.
Before the credit crash I had 500k in CC debt from 0% BT's. That was earning 5%. Debt is not the problem.
Title: Re: Dave Ramsey Plan
Post by: YoelFried on November 15, 2020, 06:58:33 PM
Could you please explain how anyone is able to live without any "monthly payments" (except if someone else is paying for their expenses)?
Seriously, you don't understand.

Think of it like purchase that you buy once and you can't afford to py it in full.
Title: Re: Dave Ramsey Plan
Post by: YoelFried on November 15, 2020, 07:00:06 PM
Not sure I follow. I have no debt but have monthly payments.
Before the credit crash I had 500k in CC debt from 0% BT's. That was earning 5%. Debt is not the problem.
Put in the same effort to raise your income and make some real money.
Title: Re: Dave Ramsey Plan
Post by: Lurker on November 15, 2020, 07:04:09 PM
Another way DR is like AA: if you're in, you think everyone needs to be in.
Title: Re: Dave Ramsey Plan
Post by: YoelFried on November 15, 2020, 07:06:46 PM
Another way DR is like AA: if you're in, you think everyone needs to be in.
You mean the debt lovers plan, most posts on this forum is to make it feel good.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 15, 2020, 07:06:53 PM
Seriously, you don't understand.

Think of it like purchase that you buy once and you can't afford to py it in full.

Now I really don't understand what you're trying to say.

Let me try to understand, are you trying to say that you make one payment to prepay for all the food, energy (electricity, gas, etc), water & sewer bills, taxes, and other consumables that you will use, consume, or otherwise be obligated to pay in the following three months? And that is somehow called "living without monthly expenses"? OK. I get that, so the expenses aren't monthly, but they are quarterly (you said 3 months)?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 15, 2020, 07:08:22 PM
Put in the same effort to raise your income and make some real money.
Ouch!
Let me let you in on a little secret. Since I was in my teens I always had side hustles. Not once did I ever use those profits for everyday bills. I did the same with overtime income. So I made real money.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 15, 2020, 07:09:04 PM
Another way DR is like AA: if you're in, you think everyone needs to be in.
The worse part about programs is they believe no one can be cured.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 15, 2020, 07:09:18 PM
Put in the same effort to raise your income and make some real money.

If you think $25,000/yr isn't real money, then "Huston, we've got a problem". Just because it was produced with mental energy and smarts, doesn't make it not real. I don't believe @CountValentine is talking about any situation where there was a risk of losing money.
Title: Re: Dave Ramsey Plan
Post by: YoelFried on November 15, 2020, 07:09:41 PM
People these days finance couches and expensive winter coats, this is what it means
Title: Re: Dave Ramsey Plan
Post by: YoelFried on November 15, 2020, 07:10:10 PM
People these days finance couches and expensive winter coats, this is what it means
Iphone purchase you can't pay upfront
Car payment
Title: Re: Dave Ramsey Plan
Post by: YoelFried on November 15, 2020, 07:11:20 PM
If you think $25,000/yr isn't real money, then "Huston, we've got a problem". Just because it was produced with mental energy and smarts, doesn't make it not real. I don't believe @CountValentine is talking about any situation where there was a risk of losing money.
In my experience spending on credit doesn't have the same emotional feeling as paying with cash
Title: Re: Dave Ramsey Plan
Post by: Lurker on November 15, 2020, 07:12:37 PM
People these days finance couches and expensive winter coats, this is what it means
Iphone purchase you can't pay upfront
Car payment

Like all things in life, there is a lot of middle ground. Life isn't black or white.
Title: Re: Dave Ramsey Plan
Post by: YoelFried on November 15, 2020, 07:15:20 PM
Like all things in life, there is a lot of middle ground. Life isn't black or white.
Everyones middle ground is somewhere else and everyone thinks they have it right.

From my side everyone could do whatever they feel like, people just asked why someone should follow the DR plan, on that was.y original post.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 15, 2020, 07:16:59 PM
In my experience spending on credit doesn't have the same emotional feeling as paying with cash
How about a 25 year old getting married and moving into their own house? That is one hell of a feeling.
Title: Re: Dave Ramsey Plan
Post by: YoelFried on November 15, 2020, 07:20:56 PM
How about a 25 year old getting married and moving into their own house? That is one hell of a feeling.
[mention]Lurker [/mention] This what I mean when people just don't have any reason on what they saying. They just want to push a agenda
Title: Re: Dave Ramsey Plan
Post by: YoelFried on November 15, 2020, 07:28:15 PM
How about a 25 year old getting married and moving into their own house? That is one hell of a feeling.
מה ענין שמיטה אצל הר סיני?
Title: Re: Dave Ramsey Plan
Post by: yungermanchik on November 15, 2020, 07:34:11 PM
מה ענין שמיטה אצל הר סיני?
It's an expression that means, what does that have to do with this? (lit. what is the sabbatical year doing by Mt. Sinai)

(Not commenting on the content just giving a definition) 
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 15, 2020, 07:39:58 PM
מה ענין שמיטה אצל הר סיני?
As much as this:
In my experience spending on credit doesn't have the same emotional feeling as paying with cash
Knowing you can afford something is a great feeling. Doesn't matter if you pay with credit or cash.
Title: Re: Dave Ramsey Plan
Post by: YoelFried on November 15, 2020, 07:43:52 PM
Did you try it out? I did
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 15, 2020, 07:51:55 PM
You got the wrong guy. Just had heating and air replaced and paid cash because of the discount. If there was no discount why wouldn't I put it on a CC so I can get the rewards.
Title: Re: Dave Ramsey Plan
Post by: YoelFried on November 15, 2020, 07:58:21 PM
You got the wrong guy. Just had heating and air replaced and paid cash because of the discount. If there was no discount why wouldn't I put it on a CC so I can get the rewards.
Yes or no, I was the same like you. Until I decided to try it out and my spending was down minimum with 10%. I get a more rewards in my cash cc.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 15, 2020, 08:02:19 PM
Yes or no, I was the same like you. Until I decided to try it out and my spending was down minimum with 10%. I get a more rewards in my cash cc.
Sorry I am not understanding.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 15, 2020, 08:09:59 PM
Sorry I am not understanding.

Let me attempt (I am not sure I got it right) to decipher this in English:

"Regardless, I used to do things just like you describe. Until I decided to pay cash for everything, and my overall spending was down by at least 10%."

I couldn't decipher the last sentence.
Title: Re: Dave Ramsey Plan
Post by: Lurker on November 15, 2020, 08:14:28 PM
Let me attempt (I am not sure I got it right) to decipher this in English:

"Regardless, I used to do things just like you describe. Until I decided to pay cash for everything, and my overall spending was down by at least 10%."

I couldn't decipher the last sentence.

The 10% "rewards" for paying cash was more than any CC rewards.
Title: Re: Dave Ramsey Plan
Post by: good sam on November 15, 2020, 08:22:16 PM
Lately I have been having guilt about using credit cards, especially Amex, at local stores. Like why should they pay for my couple of rewards points? Is there any known cure for this condition?
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 15, 2020, 08:24:03 PM
Lately I have been having guilt about using credit cards, especially Amex, at local stores. Like why should they pay for my couple of rewards points? Is there any known cure for this condition?

Yes. Ask them for a cash discount (check with you LOR regarding any possible Ribbis issues).
Title: Re: Dave Ramsey Plan
Post by: good sam on November 15, 2020, 08:26:12 PM
Yes. Ask them for a cash discount (check with you LOR regarding any possible Ribbis issues).
But that's my point, why would I be entitled to a refund?
Title: Re: Dave Ramsey Plan
Post by: avromie7 on November 15, 2020, 08:27:30 PM
Lately I have been having guilt about using credit cards, especially Amex, at local stores. Like why should they pay for my couple of rewards points? Is there any known cure for this condition?
The store gains that the cashiers can't steal if you pay by CC.
Title: Re: Dave Ramsey Plan
Post by: Lurker on November 15, 2020, 08:27:57 PM
But that's my point, why would I be entitled to a refund?

Because CC processing fees are baked into the retail price, along with other overhead expenses.
Title: Re: Dave Ramsey Plan
Post by: AsherO on November 15, 2020, 08:32:59 PM
Lately I have been having guilt about using credit cards, especially Amex, at local stores. Like why should they pay for my couple of rewards points? Is there any known cure for this condition?

Cost of doing business, don’t feel guilty if they’re a business with reasonable margins (not that you’d necessarily know, but if you’re paying full retail then they likely are making a decent profit margin).
Title: Re: Dave Ramsey Plan
Post by: AsherO on November 15, 2020, 08:36:21 PM
The store gains that the cashiers can't steal if you pay by CC.

If the theft risk is higher than the 2-3% total cost of CC processing then they likely have other, more serious, operational issues.
Title: Re: Dave Ramsey Plan
Post by: yesitsme on November 15, 2020, 09:12:04 PM
Cost of doing business, don’t feel guilty if they’re a business with reasonable margins (not that you’d necessarily know, but if you’re paying full retail then they likely are making a decent profit margin).
Correct unless you're shopping in rousners where they don't charge you for the convenience of using a cc, cash snap, only
Title: Re: Dave Ramsey Plan
Post by: Yehuda57 on November 15, 2020, 09:15:26 PM
..

Of course you are correct. Warren Buffet uses leverage, and DR doesn't discourage mortgages, although he does say it's best to pay cash and never advises longer and less than 15 years and 20% down.

The key, again, is attitude. Plenty of people, and I'm sure you know a bunch, are leveraged up the wazoo. They think they're real estate moguls, but it's a matter of time until it comes crashing down. Those are the ones who need to be smashed over the head and only buy using cash. Someone like CV, who clearly knows how to leverage successfully, need not concern himself with DR's extremism.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 15, 2020, 09:39:12 PM
When I first started posting in the this thread I trashed DR and his plan. After hearing from members how it helped them my thoughts about some portions of his plan have evolved. If they helped you were others failed then stick with his plan.
My opinion of him has not changed.  :)
Title: Re: Dave Ramsey Plan
Post by: shmaya on November 16, 2020, 02:36:26 AM
Lately I have been having guilt about using credit cards, especially Amex, at local stores. Like why should they pay for my couple of rewards points? Is there any known cure for this condition?


The owner wants you to use a credit card.

Amongst other reasons, the probability of you spending more in the store by not using cash is very high.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 16, 2020, 08:18:55 AM
When I first started posting in the this thread I trashed DR and his plan. After hearing from members how it helped them my thoughts about some portions of his plan have evolved. If they helped you were others failed then stick with his plan.
My opinion of him has not changed.  :)
I would have liked your comment if you had not added that last line. Your afraid to give a whole acknowledgement :P
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 16, 2020, 08:52:26 AM
I would have liked your comment if you had not added that last line. Your afraid to give a whole acknowledgement :P
Fair and balanced.  :)
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 16, 2020, 09:10:52 AM
I would have liked your comment if you had not added that last line. Your afraid to give a whole acknowledgement :P

At least @CountValentine is honest (intellectually and otherwise so) to acknowledge places where he has seen a different point of view and (in this case) the value of DR in some cases. Have you ever seen the same level of honesty from DR? Would DR (or did he) ever acknowledge that in certain situations (לשיטתו) a 30 year mortgage makes more sense? Or that an well funded Whole Life makes sense?
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on November 16, 2020, 10:05:19 AM
When I first started posting on this thread, I trashed DR and his plan. After hearing from members how it helped them, my thoughts about some portions of his plan have evolved. If they helped you where others failed then stick with his plan.
My opinion of him has not changed.  :)
FTFY
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 16, 2020, 10:41:13 AM
FTFY
  :P
https://forums.dansdeals.com/index.php?topic=18685.msg2358525#msg2358525
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on November 16, 2020, 11:08:13 AM
  :P
https://forums.dansdeals.com/index.php?topic=18685.msg2358525#msg2358525
That was my inspiration.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 16, 2020, 11:56:36 AM
At least @CountValentine is honest (intellectually and otherwise so) to acknowledge places where he has seen a different point of view and (in this case) the value of DR in some cases. Have you ever seen the same level of honesty from DR? Would DR (or did he) ever acknowledge that in certain situations (לשיטתו) a 30 year mortgage makes more sense? Or that an well funded Whole Life makes sense?
I have seen sometimes that he has to tread carefully when answering these type of questions because people will take it as a statement instead of an answer to a specific scenario.

and I like to discuss overall rules and details to his method. If you want to breakdown a specific situation we can have an open discussion here.

In regard to whole life I have yet to find why a good funded one makes sense. but I'm here and ready to listen if you can share specific numbers to prove how it makes sense.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 16, 2020, 03:06:53 PM
I have seen sometimes that he has to tread carefully when answering these type of questions because people will take it as a statement instead of an answer to a specific scenario.

and I like to discuss overall rules and details to his method. If you want to breakdown a specific situation we can have an open discussion here.

In regard to whole life I have yet to find why a good funded one makes sense. but I'm here and ready to listen if you can share specific numbers to prove how it makes sense.

I honestly haven't studied his rules, am just responding to what gets reported here.

Since you responded to my post of the 15 vs 30 year mortgage, I will respond to that one. While there is a slight interest rate difference between a 15yr and a 30yr mortgage, the biggest difference is in the required cash flow. A 15 year mortgage will require a person to convert more cash into equity in their home. While a 30 year mortgage will have a smaller required payment. If a person were to take a 30 year mortgage, they could usually still make the same payments that a 15 year mortgage would require, and pay off the mortgage early (though it would take a little longer than 15 years due to the slightly higher interest rate), but they would have the flexibility to fall back onto a lower payment if their cash flow falls short, or if they had an opportunity to put that cash to better use than earning the equivalent of the interest rate on their mortgage.

I don't think this is the appropriate place for me to show you specifics of what a well funded Whole Life can do for you (or for others), I would gladly take that conversation privately.
Title: Re: Dave Ramsey Plan
Post by: avromie7 on November 16, 2020, 03:21:51 PM
I honestly haven't studied his rules, am just responding to what gets reported here.

Since you responded to my post of the 15 vs 30 year mortgage, I will respond to that one. While there is a slight interest rate difference between a 15yr and a 30yr mortgage, the biggest difference is in the required cash flow. A 15 year mortgage will require a person to convert more cash into equity in their home. While a 30 year mortgage will have a smaller required payment. If a person were to take a 30 year mortgage, they could usually still make the same payments that a 15 year mortgage would require, and pay off the mortgage early (though it would take a little longer than 15 years due to the slightly higher interest rate), but they would have the flexibility to fall back onto a lower payment if their cash flow falls short, or if they had an opportunity to put that cash to better use than earning the equivalent of the interest rate on their mortgage.

I don't think this is the appropriate place for me to show you specifics of what a well funded Whole Life can do for you (or for others), I would gladly take that conversation privately.
The idea behind the 15 year mortgage is to buy a house that you can afford with a 15 year mortgage.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 16, 2020, 03:38:44 PM
I honestly haven't studied his rules, am just responding to what gets reported here.

Since you responded to my post of the 15 vs 30 year mortgage, I will respond to that one. While there is a slight interest rate difference between a 15yr and a 30yr mortgage, the biggest difference is in the required cash flow. A 15 year mortgage will require a person to convert more cash into equity in their home. While a 30 year mortgage will have a smaller required payment. If a person were to take a 30 year mortgage, they could usually still make the same payments that a 15 year mortgage would require, and pay off the mortgage early (though it would take a little longer than 15 years due to the slightly higher interest rate), but they would have the flexibility to fall back onto a lower payment if their cash flow falls short, or if they had an opportunity to put that cash to better use than earning the equivalent of the interest rate on their mortgage.

I don't think this is the appropriate place for me to show you specifics of what a well funded Whole Life can do for you (or for others), I would gladly take that conversation privately.
I dont think most people finish a 30 year mortgage in 15 years. besides if they are obligated to. Between lower mortgage interest rate usually, and a bit larger principal payment the monthly payment is not such a huge difference compared to the interest savings.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 16, 2020, 04:00:36 PM
The idea behind the 15 year mortgage is to buy a house that you can afford with a 15 year mortgage.
If you can afford it with a 15 year mortgage then you can more than afford it with a 30 year mortgage, no?
Title: Re: Dave Ramsey Plan
Post by: avromie7 on November 16, 2020, 04:03:41 PM
If you can afford it with a 15 year mortgage then you can more than afford it with a 30 year mortgage, no?
Yes, but if you limit yourself to a 15 year mortgage you're making sure to only buy a house you can afford with a 15 year mortgage.
Title: Re: Dave Ramsey Plan
Post by: aygart on November 16, 2020, 04:09:08 PM
I dont think most people finish a 30 year mortgage in 15 years. besides if they are obligated to. Between lower mortgage interest rate usually, and a bit larger principal payment the monthly payment is not such a huge difference compared to the interest savings.
They shouldn't
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 16, 2020, 04:26:04 PM
Yes, but if you limit yourself to a 15 year mortgage you're making sure to only buy a house you can afford with a 15 year mortgage.
Using that logic then why not a 10 or 5 year mortgage. Pretty soon you will be paying cash. That is exactly what he wants you to do but it is not possible and he knows it. This is the part of his plan that is flawed.
Title: Re: Dave Ramsey Plan
Post by: aygart on November 16, 2020, 04:27:05 PM
Using that logic then why not a 10 or 5 year mortgage. Pretty soon you will be paying cash. That is exactly what he wants you to do but it is not possible and he knows it. This is the part of his plan that is flawed.
Unless it is for someone who needs this type of plan.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 16, 2020, 04:28:53 PM
Unless it is for someone who needs this type of plan.
I am going to assume if they are this far along that part is behind them.
Title: Re: Dave Ramsey Plan
Post by: Lurker on November 16, 2020, 04:30:16 PM
I am going to assume if they are this far along that part is behind them.

I wouldn't. The CNBC article on the woman who bought a house with a $95k salary comes to mind as a perfect DR candidate.
Title: Re: Dave Ramsey Plan
Post by: aygart on November 16, 2020, 04:31:06 PM
I am going to assume if they are this far along that part is behind them.
While it is not everyone, there are definitely some who need to remain on his plan for the rest of their life.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 16, 2020, 04:32:15 PM
I wouldn't. The CNBC article on the woman who bought a house with a $95k salary comes to mind as a perfect DR candidate.
How much was the house? I would bet most houses 95k salary is just fine.
Title: Re: Dave Ramsey Plan
Post by: Lurker on November 16, 2020, 04:34:17 PM
How much was the house? I would bet most houses 95k salary is just fine.
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Quote
Anyang-Kusi bought her 1,850-square-foot, three-bedroom, two-and-a-half-bathroom new build for $252,275, with a down payment of $4,570, or about 1.8%. She was sold on the property after seeing an online video tour of the townhome model and visiting the lot. Because the down payment was less than 20%, she pays for private mortgage insurance (PMI), which costs her an additional $171 per month on top of her mortgage payment of $1,461.

Anyang-Kusi also has about $78,000 in outstanding debt: $25,000 in student loans, $5,600 in credit card debt and $47,000 on her car note. Each month, she spends about $1,279 repaying the debt for all three: $250 for her student loan, $300 for her credit card debt and $729 for her car loan.

This shouldn't happen.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 16, 2020, 04:36:54 PM
This shouldn't happen.
You didn't mention the other debt. 95k salary can support that house. The other debt kills her.
Title: Re: Dave Ramsey Plan
Post by: aygart on November 16, 2020, 04:40:46 PM
This shouldn't happen.
What is bothering you about that? That means 35% of her income is towards paying debt. With housing and transport taken care to the remaining 5000 should be enough.
Title: Re: Dave Ramsey Plan
Post by: avromie7 on November 16, 2020, 04:44:52 PM
What is bothering you about that? That means 35% of her income is towards paying debt. With housing and transport taken care to the remaining 5000 should be enough.
You forgot income tax.
Title: Re: Dave Ramsey Plan
Post by: aygart on November 16, 2020, 04:45:28 PM
You forgot income tax.
true, but some of the expenses are deductible
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 16, 2020, 04:47:41 PM
That means 35% of her income is towards paying debt.
This shouldn't happen.
Am I in the DR camp?  :)
Title: Re: Dave Ramsey Plan
Post by: aygart on November 16, 2020, 04:49:36 PM
Am I in the DR camp?  :)
She shouldn't have so much debt but the mortgage is not the part which is the problem. The car is the problem.
Title: Re: Dave Ramsey Plan
Post by: Lurker on November 16, 2020, 04:53:23 PM
What is bothering you about that? That means 35% of her income is towards paying debt. With housing and transport taken care to the remaining 5000 should be enough.

She shouldn't have so much debt but the mortgage is not the part which is the problem. The car is the problem.

If you have high interest debt (CC), then saddle yourself with a $50k car, and then still have to stretch to come up with $10k savings to buy a house with 1.8% down, you're doing it wrong.
Title: Re: Dave Ramsey Plan
Post by: aygart on November 16, 2020, 05:01:22 PM
If you have high interest debt (CC), then saddle yourself with a $50k car, and then still have to stretch to come up with $10k savings to buy a house with 1.8% down, you're doing it wrong.
Yup the 95k house is fine the CC debt and $50k car is not.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 16, 2020, 05:02:57 PM
Yup the 95k house is fine the CC debt and $50k car is not.
Not sure what is wrong with a 50k car.
Title: Re: Dave Ramsey Plan
Post by: aygart on November 16, 2020, 05:05:04 PM
Not sure what is wrong with a 50k car.
Paying half an annual salary for a car is a problem. But I don't think it is so terrible to have 1/3 monthly going towards debt. That is around what banks look for.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 16, 2020, 05:15:10 PM
She shouldn't have so much debt but the mortgage is not the part which is the problem. The car is the problem.

I agree that the mortgage isn't the problem, and on the surface it does seem like the car is an issue, but I am not willing to pass judgment based on the article alone.

FTR, when I bought my house I put 10% down and paid PMI for a while, I renovated it on credit cards, and had some personal interest free loans to help me. I obviously didn't have the life experience back then that I have now, and while I do regret certain things (mostly the renovations I did at the time, before actually living in a house, and while piling on lots of CC debt), I can't say that some of those moves weren't right for their time.

I can definitely relate to the following quote from the article:

Quote
After the down payment and closing costs, “I only had about $2,000 left at that time to furnish the home,” she says. “I wish that I would have saved an additional $10,000 before moving in.”

Throughout the process, she also encountered a few unexpected upfront costs: For construction to begin on her home, she spent $3,000 on a deposit. Then, she spent $1,500 to move her belongings and car. And although some appliances, like the microwave, dishwasher and stove, were included in the price of the home, she paid an additional $2,060 for a washer, dryer and refrigerator.

I find it so common that people ignore or overlook the actual cost of things, which goes beyond the purchase price and the financing cost.

Given her income level and seemingly excessive lifestyle (bases solely on the car debt), it should be rather easy for her to get onto a solid footing using the DR plan or other methods.

@CountValentine do you think some racial profiling might be involved in passing judgment on this young lady, without actually hearing the full story?
Title: Re: Dave Ramsey Plan
Post by: Lurker on November 16, 2020, 05:17:06 PM
Yup the 95k house is fine the CC debt and $50k car is not.

The point wasn't to not buy a $250k house with a $95k salary. The woman lived with her parents, had the debt she had, and struggled to save $10k for a house. The point was that you shouldn't assume someone who is ready to / capable of buying a house shouldn't be in the DR program.
Title: Re: Dave Ramsey Plan
Post by: Lurker on November 16, 2020, 05:18:33 PM
Paying half an annual salary for a car is a problem. But I don't think it is so terrible to have 1/3 monthly going towards debt. That is around what banks look for.

Banks look for it because it means their chances of not getting paid are lower. That doesn't mean it's a smart move on the consumer's part.
Title: Re: Dave Ramsey Plan
Post by: skyguy918 on November 16, 2020, 05:22:53 PM
Since you responded to my post of the 15 vs 30 year mortgage, I will respond to that one. While there is a slight interest rate difference between a 15yr and a 30yr mortgage, the biggest difference is in the required cash flow. A 15 year mortgage will require a person to convert more cash into equity in their home. While a 30 year mortgage will have a smaller required payment. If a person were to take a 30 year mortgage, they could usually still make the same payments that a 15 year mortgage would require, and pay off the mortgage early (though it would take a little longer than 15 years due to the slightly higher interest rate), but they would have the flexibility to fall back onto a lower payment if their cash flow falls short, or if they had an opportunity to put that cash to better use than earning the equivalent of the interest rate on their mortgage.
+1. Just made this exact cheshbon on my refi. 15yr would've been a stretch, but I had a 20yr option for 1/8 lower rate. The interest savings is so minimal it didn't make much sense to remove the fallback of the lower payment over 30yrs. Set my auto-payment high enough to pay off just before 20yr mark.
Title: Re: Dave Ramsey Plan
Post by: aygart on November 16, 2020, 05:23:01 PM
The point wasn't to not buy a $250k house with a $95k salary. The woman lived with her parents, had the debt she had, and struggled to save $10k for a house. The point was that you shouldn't assume someone who is ready to / capable of buying a house shouldn't be in the DR program.
She definitely does belong on a financial plan
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 16, 2020, 05:41:00 PM
@CountValentine do you think some racial profiling might be involved in passing judgment on this young lady, without actually hearing the full story?
Never crossed my mind.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 16, 2020, 05:41:59 PM
That is around what banks look for.
Exactly and that is the problem.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 16, 2020, 05:57:34 PM
+1. Just made this exact cheshbon on my refi. 15yr would've been a stretch, but I had a 20yr option for 1/8 lower rate. The interest savings is so minimal it didn't make much sense to remove the fallback of the lower payment over 30yrs. Set my auto-payment high enough to pay off just before 20yr mark.

Back in the Making Home Affordable modification days, I helped several people modify their loans on extremely favorable terms to 40 year loans (usually with an interest-free forbearance). Some people asked me about prepaying it sooner. In almost all cases I've shown people better options than prepaying that mortgage.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 24, 2020, 09:16:09 PM
for someone following dave ramseys retirement investment strategies, what are some good mutual funds that fit his categories?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 24, 2020, 09:18:20 PM
You should really think twice about taking financial advice from DR.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 24, 2020, 09:41:48 PM
You should really think twice about taking financial advice from DR.
K. ::)

I asked a question, try to answer if you can. I did not ask opinions regarding his strategy. although his retirement strategy is pretty basic, but I'm not in the mood of an argument.
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on November 24, 2020, 09:43:42 PM
You should really think twice about taking financial advice from DR.
If you have a substantive argument on something specific with DRP, feel free to voice your opinion. Otherwise
Lets keep that crap to JS.
Title: Re: Dave Ramsey Plan
Post by: aygart on November 24, 2020, 09:45:03 PM
for someone following dave ramseys retirement investment strategies, what are some good mutual funds that fit his categories?
What are his categories?
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 24, 2020, 09:53:02 PM
K. ::)

I asked a question, try to answer if you can. I did not ask opinions regarding his strategy. although his retirement strategy is pretty basic, but I'm not in the mood of an argument.
If you have a substantive argument on something specific with DRP, feel free to voice your opinion. Otherwise
His financial strategies are not the best to put it mildly. We discussed interest, life insurance, home buying and others at length. I don't think you want to go over them again.
The strong point of his plan is motivation.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 24, 2020, 09:54:52 PM
What are his categories?
Growth.
Growth and Income.
Aggressive Growth.
International.
Title: Re: Dave Ramsey Plan
Post by: Yehuda57 on November 24, 2020, 09:59:43 PM
His financial strategies are not the best to put it mildly. We discussed interest, life insurance, home buying and others at length. I don't think you want to go over them again.
The strong point of his plan is motivation.

None of these points were in OP's question.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 24, 2020, 10:02:05 PM
None of these points were in OP's question.
Correct. If you feel someone is going wrong somewhere you don't feel it is helpful to voice your opinion?
ETA: He didn't ask about DCA but wouldn't that be helpful?
Title: Re: Dave Ramsey Plan
Post by: Yehuda57 on November 24, 2020, 10:04:38 PM
Correct. If you feel someone is going wrong somewhere you don't feel it is helpful to voice your opinion?

You didn't do that. If that was your motivation, you would have given at least a brief primer on why investing solely in mutual funds in those 4 categories is unwise.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 24, 2020, 10:04:56 PM
Correct. If you feel someone is going wrong somewhere you don't feel it is helpful to voice your opinion?
not if you mentioned it a gazillion times.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 24, 2020, 10:12:04 PM
Why is everyone so touchy?
If someone has flawed financial advice in one area it is good bet it is flawed in other areas. That is my opinion on parts of his plan that I mentioned a "gazillion" times.
No need to go into attack mode.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 24, 2020, 10:13:38 PM
Why is everyone so touchy?
If someone has flawed financial advice in one area it is good bet it is flawed in other areas. That is my opinion on parts of his plan that I mentioned a "gazillion" times.
No need to go into attack mode.
Growth.
Growth and Income.
Aggressive Growth.
International.

can you answer recommendations for these categories? because that was the question
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 24, 2020, 10:21:56 PM
can you answer recommendations for these categories? because that was the question
I am not big on mutual funds. I would stay away from international funds at this time since the US should outperform others.
Also with the market at an all time high I would highly recommend DCA (dollar cost average). Tons on articles explaining it if you are not familiar with it.
The bottom line is you need to do your research. If not just put it in a major S&P fund.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 24, 2020, 10:24:19 PM
Growth.
Growth and Income.
Aggressive Growth.
International.

Could you rationalize those categories?

What about periodic rebalancing?

What's the strategy?

Where's the asset class diversification?
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 24, 2020, 10:33:17 PM
Could you rationalize those categories?

What about periodic rebalancing?

What's the strategy?

Where's the asset class diversification?
https://www.daveramsey.com/blog/daves-investing-philosophy
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 24, 2020, 10:38:51 PM
https://www.daveramsey.com/blog/daves-investing-philosophy
Does he bring up DCA at all? I didn't see it glancing over the link.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 24, 2020, 10:40:04 PM
https://www.daveramsey.com/blog/daves-investing-philosophy
How about you write in your words what you understand to be the answers to my questions/queries?

I strongly believe one should not be following an investment strategy they don't understand.
Title: Re: Dave Ramsey Plan
Post by: aygart on November 24, 2020, 10:41:11 PM
https://www.daveramsey.com/blog/daves-investing-philosophy (https://www.daveramsey.com/blog/daves-investing-philosophy)
Note that in that link he repeatedly shies away from saying that this is a recommendation of a strategy for you. He writes at the beginning


Quote
Knowing how to deal with debt is easy—pay it off! Investing, however, isn’t quite so simple. Most people have questions about when and how to invest their money, so here’s an inside look at Dave Ramsey’s investing philosophy. Just remember, investing is personal. A financial advisor or investment professional can help you create a retirement plan that’s right for you.....


....Don’t copy Dave’s plan simply because that’s what Dave does. Work with an investment professional to compare all your options before choosing your investments.[/size]



Take his advice and work on a plan that takes into account YOUR situation and goals as well as your stage in life. This is how you will get the best results according to him. The main part of hos plan is how to make sure you actually put the money away. Once it is put away then it becomes much more personalized.

Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 24, 2020, 10:42:07 PM
How about you write in your words what you understand to be the answers to my questions/queries?

I strongly believe one should not be following an investment strategy they don't understand.
he agrees with you. This is the last paragraph
Quote
A good financial advisor or investment professional provides insight and direction based on years of investing experience, but they know you’re the decision-maker. Look for a pro who takes time to answer your questions and gives you all the information you need to make good investing choices.

in my words:

Im a novice because as I said upthread I'm BH just getting to this point now. I came hear for Ideas, I will then research and decide on my own if it works for me.
Title: Re: Dave Ramsey Plan
Post by: aygart on November 24, 2020, 10:43:36 PM
his last paragraph
You don't seem to be following that when asking for advice on how to mirror what he does for his situation.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 24, 2020, 10:45:25 PM
You don't seem to be following that when asking for advice on how to mirror what he does for his situation.
see my updated post above
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 24, 2020, 10:47:10 PM
see my updated post above
Are you looking long term? Is this for 401k, IRA or the likes?
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 24, 2020, 10:47:55 PM
he agrees with you. This is the last paragraph
in my words:

Im a novice because as I said upthread I'm BH just getting to this point now. I came hear for Ideas, I will then research and decide on my own if it works for me.

So here's my idea for you. Look into the questions I asked above. Make sure you understand the questions and the rationale behind them. Then move to the next step. In the meantime keep your money where you can understand and explain where it is.
Title: Re: Dave Ramsey Plan
Post by: aygart on November 24, 2020, 10:48:05 PM
see my updated post above
The facts are that you came asking for recommendations on his categories. I advise you to work on a more comprehensive plan together with an advisor who will ensure that your accounts remain properly balanced and that you take advantage of the tax-advantaged options available to you. Choosing the actual fund or other investment is the last step not the first.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 24, 2020, 10:49:16 PM
Are you looking long term? Is this for 401k, IRA or the likes?

That's another major question to ask. What's the current tax situation, what's the personal outlook, as well as personal belief regarding future tax environment.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 24, 2020, 10:53:25 PM
So here's my idea for you. Look into the questions I asked above. Make sure you understand the questions and the rationale behind them. Then move to the next step. In the meantime keep your money where you can understand and explain where it is.
this discussion here is pretty fast paced. but I will take the time to respond to the best of my current knowledge. I'm not afraid to say that I'm still constantly learning regarding long term investment strategies.

The facts are that you came asking for recommendations on his categories. I advise you to work on a more comprehensive plan together with an advisor who will ensure that your accounts remain properly balanced and that you take advantage of the tax-advantaged options available to you. Choosing the actual fund or other investment is the last step not the first.
I actually had the discussion with my accountant regarding Tax advantaged Account. and I am still in the planning stages. One of a few stops was here. Believe it or not I have found that sometimes people give good advice here :D. so I'm all ears to see what others are doing and why.

Are you looking long term? Is this for 401k, IRA or the likes?
yes Long term IRA
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 24, 2020, 11:01:09 PM
this discussion here is pretty fast paced. but I will take the time to respond to the best of my current knowledge. I'm not afraid to say that I'm still constantly learning regarding long term investment strategies.
I actually had the discussion with my accountant regarding Tax advantaged Account. and I am still in the planning stages. One of a few stops was here. Believe it or not I have found that sometimes people give good advice here :D. so I'm all ears to see what others are doing and why.
yes Long term IRA

I didn't mean for you to come up with instant answers. I hope you take the time to learn an understand what I wrote, so you can do better for yourself.

In my personal experience, most accountants are NOT the right people to advise you on what type of tax qualified account (IRA, Roth IRA, 401k, HSA, etc) is best for you. They usually barely know the rules for those, except if that's their speciality.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 24, 2020, 11:05:52 PM
yes Long term IRA
I would just store it in a S&P 500 fund. This would just be temporary until you figure out a long term plan. There is a lot involved so take your time.

My government plan offered me options based on ones age. Aggressive when young, then decreasing as you got older. 
Title: Re: Dave Ramsey Plan
Post by: aygart on November 24, 2020, 11:10:08 PM



My government plan offered me options based on ones age. Aggressive when young, then decreasing as you got older.
The major mutual fund companies have funds that do this as well.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 24, 2020, 11:10:30 PM
I would just store it in a S&P 500 fund. This would just be temporary until you figure out a long term plan. There is a lot involved so take your time.

My government plan offered me options based on ones age. Aggressive when young, then decreasing as you got older.
Thats my goal. Thank G-d Im starting pretty young. so current actions can make a huge difference over time.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 24, 2020, 11:11:27 PM
The major mutual fund companies have funds that do this as well.
Absolutely.
Title: Re: Dave Ramsey Plan
Post by: aygart on November 24, 2020, 11:12:12 PM
Thats my goal. Thank G-d Im starting pretty young. so current actions can make a huge difference over time.
In which case his equal split between categories is probably not the best plan for you.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 24, 2020, 11:14:08 PM
In which case his equal split between categories is probably not the best plan for you.
I agree that probably equally split is not the best. but the overall categories itself might make sense for me.
Title: Re: Dave Ramsey Plan
Post by: aygart on November 24, 2020, 11:16:26 PM
A large part of the equation is how much time you will be able to spend on managing it and how consistent you will be in doing so. Another part is how well will you be able to stick to your plan in the face of losses or gains from a portion of your portfolio. Just for this it is often worth paying an advisor.
Title: Re: Dave Ramsey Plan
Post by: ExGingi on November 24, 2020, 11:20:27 PM
A large part of the equation is how much time you will be able to spend on managing it and how consistent you will be in doing so. Another part is how well will you be able to stick to your plan in the face of losses or gains from a portion of your portfolio. Just for this it is often worth paying an advisor.

Quite a few of the online brokers currently offer robo-advisors. I have no experience, but I would assume they can't be too bad in this competitive market. The regulatory environment doesn't really lend to a human advisor unless it's a large account. A good advisor needs to make a living.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 24, 2020, 11:20:46 PM
A large part of the equation is how much time you will be able to spend on managing it and how consistent you will be in doing so. Another part is how well will you be able to stick to your plan in the face of losses or gains from a portion of your portfolio. Just for this it is often worth paying an advisor.
valid points. current and near future portfolio size is difficult to have an advisor. I do have one lined up that told me to come back when its a bit larger.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 24, 2020, 11:23:25 PM
Another part is how well will you be able to stick to your plan in the face of losses or gains from a portion of your portfolio.
This is a big concern for everyone.
I have my youngest daughter in set it and forget it mode. She gets matching funds from employer. Contribute the max and don't even look at it.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 24, 2020, 11:24:34 PM
valid points. current and near future portfolio size is difficult to have an advisor. I do have one lined up that told me to come back when its a bit larger.
You are the point of getting your feet wet and being comfortable in what you are doing.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 24, 2020, 11:25:31 PM
You are the point of getting your feet wet and being comfortable in what you are doing.
Finally.  after all these posts tonight you finally figured out where I am at ;D
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 24, 2020, 11:28:09 PM
Finally.  after all these posts tonight you finally figured out where I am at ;D
I knew where you were at with my first post on this.
I was trying to help and I either didn't make it clear or ...
Title: Re: Dave Ramsey Plan
Post by: avromie7 on November 24, 2020, 11:31:16 PM
I am not big on mutual funds. I would stay away from international funds at this time since the US should outperform others.
Also with the market at an all time high I would highly recommend DCA (dollar cost average). Tons on articles explaining it if you are not familiar with it.
The bottom line is you need to do your research. If not just put it in a major S&P fund.
Based on his current situation, he will be doing something close to DCA by default.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 24, 2020, 11:36:32 PM
Based on his current situation, he will be doing something close to DCA by default.
I have no idea. He might have 5k he is thinking of investing.
Either way it is good to understand this basic principal.
Title: Re: Dave Ramsey Plan
Post by: Yehuda57 on November 24, 2020, 11:41:40 PM
Does he bring up DCA at all? I didn't see it glancing over the link.

He does speak about this. Googling dca Dave Ramsey will produce results.

I knew where you were at with my first post on this.
I was trying to help and I either didn't make it clear or ...

Definitely wasn't clear. Just looked like you were using it to take shots at DR. That's why a little explanation would have gone a long way.

Like I said in my initial post on this thread, once you get to the investing stage, you should be getting an advisor, even according to DR.
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 24, 2020, 11:45:07 PM
Like I said in my initial post on this thread, once you get to the investing stage, you should be getting an advisor, even according to DR.
I strongly disagree. Most people will never need an advisor.
Definitely wasn't clear. Just looked like you were using it to take shots at DR. That's why a little explanation would have gone a long way.
I try to be short and to the point.
Title: Re: Dave Ramsey Plan
Post by: yitzgar on November 24, 2020, 11:48:16 PM
Was hoping for some real popcorn here now that certain people were banned on other threads.....don't stand down so quickly CV!
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 24, 2020, 11:50:15 PM
Was hoping for some real popcorn here now that certain people were banned on other threads.....don't stand down so quickly CV!
This isn't JS so no popcorn from me. I try and help in these threads even if it is not taken that way.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 24, 2020, 11:50:26 PM
I strongly disagree. Most people will never need an advisor.

 I try to be short and to the point.
To your first point, I disagree.   I can be the best at what I do. I can't be the best at everything.  But I can sure hire the best of each field that I need. If I build a house I can technically learn how to do everything, but I'm better off hiring the person that knows it best and can tell me which sheetrock will be best and then I will understand. Same with a financial advisor.


To your second point,
You were short and to the point. But your point came across as just another one of your shots against DR. So perhaps it was a bit too short ;)
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 24, 2020, 11:54:15 PM
To your first point, I disagree.   I can be the best at what I do. I can't be the best at everything.  But I can sure hire the best of each field that I need. If I build a house I can technically learn how to do everything, but I'm better off hiring the person that knows it best and can tell me which sheetrock will be best and then I will understand. Same with a financial advisor.
What's the difference between a financial advisor and the S&P 500? S&P 500 will out preform most of them. Now before anyone gets their panties in a knot, yes a FA will do more than just recommend stocks.
Title: Re: Dave Ramsey Plan
Post by: neveryou on November 25, 2020, 12:10:23 AM
What's the difference between a financial advisor and the S&P 500? S&P 500 will out preform most of them. Now before anyone gets their panties in a knot, yes a FA will do more than just recommend stocks.
Difference is that I'm up 375% in the past 5 years with a financial advisor
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 25, 2020, 12:13:54 AM
Difference is that I'm up 375% in the past 5 years with a financial advisor
...and TSLA blows that out of the water. What's your point?
Title: Re: Dave Ramsey Plan
Post by: neveryou on November 25, 2020, 12:14:33 AM
...and TSLA blows that out of the water. What's your point?
Compared to sp500
Title: Re: Dave Ramsey Plan
Post by: CountValentine on November 25, 2020, 12:20:08 AM
Compared to sp500
TSLA blew your FA out of the water.
The point is yes there will be a FA that outperforms here and there, just like individual stocks. But overall they won't.
Title: Re: Dave Ramsey Plan
Post by: yesitsme on November 26, 2020, 12:10:19 AM
Dave Ramsey alternative
https://rsk.org/#how_it_works (https://rsk.org/#how_it_works)

https://player.vimeo.com/video/334591927
Title: Re: Dave Ramsey Plan
Post by: zh cohen on November 26, 2020, 12:38:55 PM
I would just store it in a S&P 500 fund.

Dave often recommends this for certain situations.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on November 26, 2020, 12:46:43 PM
Dave Ramsey alternative
https://rsk.org/#how_it_works (https://rsk.org/#how_it_works)

https://player.vimeo.com/video/334591927
how is this an alternative?
Title: Re: Dave Ramsey Plan
Post by: good sam on November 26, 2020, 10:10:32 PM
Whenever I turn on the radio to the Dave Ramsey opening I'm expecting to hear "Now introducing, for the very first time..."
Title: Re: Dave Ramsey Plan
Post by: yesitsme on December 03, 2020, 12:45:42 AM
how is this an alternative?
financial coaching
FC@RSK.ORG
Title: Re: Dave Ramsey Plan
Post by: R.A.T. on December 14, 2020, 12:38:25 PM
Thoughts?
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on December 20, 2020, 10:24:18 AM
 “Don’t buy things you can’t afford, with money you don’t have, to impress people you don’t like.” - DR
Title: Re: Dave Ramsey Plan
Post by: ExGingi on December 20, 2020, 01:33:27 PM
“Don’t buy things you can’t afford, with money you don’t have, to impress people you don’t like.” - DR

That can (and probably should) be broken up into three distinct statements, every one of them can stand on its own merits.
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on December 22, 2020, 08:28:59 AM
“typical millionaire lives in a middle-class home, drives a two-year-old or older paid-for car, and buys blue jeans at Wal-Mart.“ DR
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on February 17, 2021, 06:34:39 PM
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on February 18, 2021, 08:54:06 PM
According to bankrate.com fewer than 4 in 10 Americans are on Baby Step #1

https://www.bankrate.com/banking/savings/financial-security-january-2021/
Title: Re: Dave Ramsey Plan
Post by: Lurker on February 18, 2021, 08:56:03 PM
According to bankrate.com fewer than 4 in 10 Americans are on Baby Step #1

https://www.bankrate.com/banking/savings/financial-security-january-2021/

3 of the remaining 6 are holding fractions of GME and Dogecoin.
Title: Re: Dave Ramsey Plan
Post by: Mordyk on February 18, 2021, 08:57:27 PM
According to bankrate.com fewer than 4 in 10 Americans are on Baby Step #1

https://www.bankrate.com/banking/savings/financial-security-january-2021/
That's exactly why it's baby step 1.  Dave gives the example of not being able to fix your car therefore not being able to get to work...
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on March 15, 2021, 08:59:00 AM
Title: Re: Dave Ramsey Plan
Post by: zh cohen on May 08, 2021, 11:39:25 PM
Mishpacha magazine had new diary serial called "Baby steps"

Week 1 - https://mishpacha.com/baby-steps-chatper-1/
Week 2 - https://mishpacha.com/baby-steps-part-2-of-10/
Title: Re: Dave Ramsey Plan
Post by: Mordyk on May 09, 2021, 01:06:56 AM
Mishpacha magazine had new diary serial called "Baby steps"

Week 1 - https://mishpacha.com/baby-steps-chatper-1/
Week 2 - https://mishpacha.com/baby-steps-part-2-of-10/
Are they at least giving credit to DR?
Title: Re: Dave Ramsey Plan
Post by: Euclid on May 09, 2021, 01:13:35 AM
Are they at least giving credit to DR?
Did you read it?
Title: Re: Dave Ramsey Plan
Post by: Mordyk on May 09, 2021, 02:57:42 AM
Did you read it?
Now I did. And I see they did. 
Title: Re: Dave Ramsey Plan
Post by: AussieMan on May 09, 2021, 07:02:11 AM
I find it quite amusing that this thread is not in the finance section of DDF
Title: Re: Dave Ramsey Plan
Post by: zh cohen on May 09, 2021, 08:10:55 AM
I find it quite amusing that this thread is not in the finance section of DDF

It was started before there was a finance section.
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on May 11, 2021, 06:24:25 AM
I find it quite amusing that this thread is not in the finance section of DDF
Done.
Title: Re: Dave Ramsey Plan
Post by: Kobe Bryant on June 16, 2021, 09:04:26 AM
Title: Re: Dave Ramsey Plan
Post by: Iz on June 16, 2021, 10:02:33 AM

Anything new or interesting here?