Poll

What baby step are you up to?

$1,000 Rainy day fund
Pay off all debt using the debt snowball
3 to 6 months of expenses in savings
Invest 15% of household income into Roth IRAs and pre-tax retirement (401k Etc.)
College /Simcha fund for children
Pay off home early (prepay mortgage)
Build wealth and give!

Author Topic: Dave Ramsey Plan  (Read 11687 times)

Offline Kobe bryent

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Re: Dave Ramsey Plan
« Reply #30 on: July 23, 2020, 01:48:00 PM »








Offline avromie7

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Re: Dave Ramsey Plan
« Reply #31 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.
I wonder what people who type "u" instead of "you" do with all their free time.

Offline Pad18

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Re: Dave Ramsey Plan
« Reply #32 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 !

Offline yos9694

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Re: Dave Ramsey Plan
« Reply #33 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)
  • Liquid assets are better than illiquid (and yes, WL is liquid)
  • Net cost of borrowing is government subsidized if you itemize (obviously not everyone, especially after TCJA)
  • The big one that most people don't factor in - Risk sharing. If you own your house outright all the risk of loss is on you (/HO insurance). Having a mortgage means that part of your home's value is the bank's risk. If you had to walk away from the house for any reason, they can never touch any of your other assets

Offline Kobe bryent

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Re: Dave Ramsey Plan
« Reply #34 on: July 23, 2020, 05:36:04 PM »

Offline Kobe bryent

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Re: Dave Ramsey Plan
« Reply #35 on: July 23, 2020, 05:37:45 PM »
"Whole life insurance is the payday loans of the middle class" DR

Offline Kobe bryent

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Re: Dave Ramsey Plan
« Reply #36 on: July 23, 2020, 05:38:20 PM »

Offline Kobe bryent

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Re: Dave Ramsey Plan
« Reply #37 on: July 23, 2020, 05:38:42 PM »

Offline Kobe bryent

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Re: Dave Ramsey Plan
« Reply #38 on: July 23, 2020, 05:39:19 PM »

Offline ExGingi

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Re: Dave Ramsey Plan
« Reply #39 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?
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline CountValentine

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Re: Dave Ramsey Plan
« Reply #40 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.  ::)
You're so far up Trump's a** you can see Giuliani's feet.  HT Baruch

Offline gozalim

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Re: Dave Ramsey Plan
« Reply #41 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

Offline zh cohen

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Re: Dave Ramsey Plan
« Reply #42 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.

Offline zh cohen

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Re: Dave Ramsey Plan
« Reply #43 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?
« Last Edit: July 23, 2020, 06:44:15 PM by zh cohen »

Offline zh cohen

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Re: Dave Ramsey Plan
« Reply #44 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