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 30954 times)

Offline moko

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Re: Dave Ramsey Plan
« Reply #80 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

Offline moko

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Re: Dave Ramsey Plan
« Reply #81 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.

Offline farmbochur

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Re: Dave Ramsey Plan
« Reply #82 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.
Risk is opportunity

Offline moko

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Re: Dave Ramsey Plan
« Reply #83 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) :)

Offline farmbochur

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Re: Dave Ramsey Plan
« Reply #84 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.
Risk is opportunity

Offline Kobe Bryant

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Re: Dave Ramsey Plan
« Reply #85 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.

Offline Kobe Bryant

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Re: Dave Ramsey Plan
« Reply #86 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.

Offline whYME

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Re: Dave Ramsey Plan
« Reply #87 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

Offline Kobe Bryant

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Re: Dave Ramsey Plan
« Reply #88 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.

Offline ExGingi

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Re: Dave Ramsey Plan
« Reply #89 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
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline zh cohen

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Re: Dave Ramsey Plan
« Reply #90 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).
« Last Edit: July 23, 2020, 11:47:41 PM by zh cohen »

Offline Mordyk

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Re: Dave Ramsey Plan
« Reply #91 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.
« Last Edit: July 24, 2020, 12:00:14 AM by Mordyk »
#TYH

Offline thaber

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Re: Dave Ramsey Plan
« Reply #92 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.

Offline 12HRS

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Re: Dave Ramsey Plan
« Reply #93 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?

Offline avromie7

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Re: Dave Ramsey Plan
« Reply #94 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.
I wonder what people who type "u" instead of "you" do with all their free time.

Offline ExGingi

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Re: Dave Ramsey Plan
« Reply #95 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?
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Online aygart

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Re: Dave Ramsey Plan
« Reply #96 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?
Feelings don't care about your facts

Online aygart

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Re: Dave Ramsey Plan
« Reply #97 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.
Feelings don't care about your facts

Offline CountValentine

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Re: Dave Ramsey Plan
« Reply #98 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?
You're so far up Trump's a** you can see Giuliani's feet.  HT Baruch

Offline CountValentine

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Re: Dave Ramsey Plan
« Reply #99 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.  :)
You're so far up Trump's a** you can see Giuliani's feet.  HT Baruch