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Author Topic: Dave Ramsey Plan  (Read 106185 times)

Online ExGingi

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Re: Dave Ramsey Plan
« Reply #500 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?
I've been waiting over 5 years with bated breath for someone to say that!
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Re: Dave Ramsey Plan
« Reply #501 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.
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Offline Lurker

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Re: Dave Ramsey Plan
« Reply #502 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.
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Re: Dave Ramsey Plan
« Reply #503 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.

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Re: Dave Ramsey Plan
« Reply #504 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
Feelings don't care about your facts

Offline CountValentine

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Re: Dave Ramsey Plan
« Reply #505 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.
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Offline CountValentine

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Re: Dave Ramsey Plan
« Reply #506 on: November 16, 2020, 05:41:59 PM »
That is around what banks look for.
Exactly and that is the problem.
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Re: Dave Ramsey Plan
« Reply #507 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.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline Mordyk

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Re: Dave Ramsey Plan
« Reply #508 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?
#TYH

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Re: Dave Ramsey Plan
« Reply #509 on: November 24, 2020, 09:18:20 PM »
You should really think twice about taking financial advice from DR.
Only on DDF does 24/6 mean 24/5/half/half

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Re: Dave Ramsey Plan
« Reply #510 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.
#TYH

Offline Kobe Bryant

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Re: Dave Ramsey Plan
« Reply #511 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.

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Re: Dave Ramsey Plan
« Reply #512 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?
Feelings don't care about your facts

Offline CountValentine

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Re: Dave Ramsey Plan
« Reply #513 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.
Only on DDF does 24/6 mean 24/5/half/half

Offline Mordyk

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Re: Dave Ramsey Plan
« Reply #514 on: November 24, 2020, 09:54:52 PM »
What are his categories?
Growth.
Growth and Income.
Aggressive Growth.
International.
#TYH

Offline Yehuda57

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Re: Dave Ramsey Plan
« Reply #515 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.

Offline CountValentine

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Re: Dave Ramsey Plan
« Reply #516 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?
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Offline Yehuda57

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Re: Dave Ramsey Plan
« Reply #517 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.

Offline Mordyk

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Re: Dave Ramsey Plan
« Reply #518 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.
#TYH

Offline CountValentine

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Re: Dave Ramsey Plan
« Reply #519 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.
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