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 106383 times)

Offline CountValentine

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Re: Dave Ramsey Plan
« Reply #480 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?
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Offline avromie7

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Re: Dave Ramsey Plan
« Reply #481 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.
I wonder what people who type "u" instead of "you" do with all their free time.

Offline aygart

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Re: Dave Ramsey Plan
« Reply #482 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
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Offline CountValentine

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Re: Dave Ramsey Plan
« Reply #483 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.
Only on DDF does 24/6 mean 24/5/half/half

Offline aygart

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Re: Dave Ramsey Plan
« Reply #484 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.
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Offline CountValentine

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Re: Dave Ramsey Plan
« Reply #485 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.
Only on DDF does 24/6 mean 24/5/half/half

Offline Lurker

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Re: Dave Ramsey Plan
« Reply #486 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.
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Offline aygart

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Re: Dave Ramsey Plan
« Reply #487 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.
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Offline CountValentine

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Re: Dave Ramsey Plan
« Reply #488 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.
Only on DDF does 24/6 mean 24/5/half/half

Offline Lurker

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Re: Dave Ramsey Plan
« Reply #489 on: November 16, 2020, 04:34:17 PM »
How much was the house? I would bet most houses 95k salary is just fine.
https://twitter.com/PATreasury/status/1327665292101738497?s=20

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.
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Offline CountValentine

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Re: Dave Ramsey Plan
« Reply #490 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.
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Offline aygart

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Re: Dave Ramsey Plan
« Reply #491 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.
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Offline avromie7

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Re: Dave Ramsey Plan
« Reply #492 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.
I wonder what people who type "u" instead of "you" do with all their free time.

Offline aygart

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Re: Dave Ramsey Plan
« Reply #493 on: November 16, 2020, 04:45:28 PM »
You forgot income tax.
true, but some of the expenses are deductible
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Offline CountValentine

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Re: Dave Ramsey Plan
« Reply #494 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?  :)
Only on DDF does 24/6 mean 24/5/half/half

Offline aygart

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Re: Dave Ramsey Plan
« Reply #495 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.
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Re: Dave Ramsey Plan
« Reply #496 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.
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Offline aygart

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Re: Dave Ramsey Plan
« Reply #497 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.
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Offline CountValentine

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Re: Dave Ramsey Plan
« Reply #498 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.
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Offline aygart

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Re: Dave Ramsey Plan
« Reply #499 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.
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