Dave Ramsey Plan

[zh cohen]

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.

[CountValentine]

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?

[CountValentine]

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.

[YoelFried]

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

[CountValentine]

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.

[zh cohen]

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...

[CountValentine]

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.

[CountValentine]

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?

[Mordyk]

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

[Mordyk]

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

[zh cohen]

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.

[YoelFried]

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

[YoelFried]

Final point = don't be so busy which way of paying of debt is better, just start paying it off.

[avromie7]

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.

[CountValentine]

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.

[farmbochur]

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#

[avromie7]

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.

[YoelFried]

https://sndup.net/4rq8

For those who know Yiddish.

[CountValentine]

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.

[YoelFried]

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.