Dave Ramsey fans read this

[Geraldg6]

As an investment advisor for 30 years I talk to people about this every day. One of the saddest things about my job is when I have people come in who are within 5-10 years of retirement and finally decide to do some planning. They have had a 6 figure income for decades and have lived well, but when we run the numbers in the planning software, including social security, pension, 401k - whatever they have - it looks very bleak. I see an awakening and a lot of regret. Look at it this way - if you start saving when you are 30 you have to save enough in 30 years to live another 25+ years in retirement. When you adjust for inflation that is a huge number. For example at an inflation rate of only 2.5% to get a $75k annual income in today's dollars = $157k 30 years from now.

I’m in the same boat. I work people everyday that have been living a great life for years, but never saved a dime or used retirement monies for something other than retirement. It’s always very enlightening for those people, some take the advice I give them and other shy away because they don’t want to believe they have done anything wrong. Numbers do not lie, but most importantly is to remember that no every one person is the same and each person’s situation is different.

Teach them to save young and lead by example.


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[bowhuntertex]

I have never read any financial help books in my entire life and when I was younger I spent money and had credit card bills out the wazoo. At some point I decided to pay everything off and start living within my means and I much happier for it. Everything I own is paid off except for my house and I am good with that. The biggest thing I have learned over the years is that cash is king and you can get a much better deal on something if you are paying cash. I doubt I will be able to retire early, but I can enjoy my life now without having to worry about paying any bills and I will be comfortable when I do retire. I always keep enough money in my account to pay at least 6 months worth of bills in case I end up out of a job and if I want something I only buy if I have cash in hand.

[Christianhuff]

Was In a 160K of revolving debt when i married my wife, i leveraged it and never paid more than 2% interest over a 10 yr. period. I also managed to buy and sell 10 properties over that period of time. There is always such a thing as good debt, as long as you have assets to cover it.

[35remington]

Dave Ramsey has some good financial advice that has helped a lot of people get out of debt, live within their means, and as a result, he has even saved some lives and marriages. Basically, he simplifies finance with a proven method. I applaud him for that and I'm really happy for the people he has helped.

However, his financial advice is not the only sound advice out there. Different financial strategies work for different people with different tolerances for risk, financial knowledge, income, and age. There are ways to safely use leverage, take advantage of credit cards, and invest "other people's money" to your advantage.

I'm not so sure why so many people act like his advice is the only advice out there or why some judge others for taking Dave's advice. To each there own. Happy finances.

This is a solid post.

OP's article is garbage. Good luck implementing a plan based on what "makes you feel good."

[Murph]

Yea, folks who followed this advice and plowed money in to their home loan shouldn't do the math to see what they gave up by not investing the money wisely...

My house has gone up about 50% in value over the last 7 years. That is the type of investment I want to put my cash in. The risk is very low compared to the market.
Just another way to think of it.

[CTR0022]

My house has gone up about 50% in value over the last 7 years. That is the type of investment I want to put my cash in. The risk is very low compared to the market.
Just another way to think of it.

Your house would have gone 50% if you continued to make the minimum payments. Think how much money you could have made by buying rental property with the extra principal you were pumping into your house.

That's were Dave Ramsey misses the boat imho. Calculated debt is not a bad thing.

[B&C]

Managing debt requires great discipline.... Today's instant gratification society puts a lot of pressure on that discipline. If I can't pay cash I don't buy it. I prefer the security of owning it vs. what if something happens to my cash flow. "Debt free" allows time for the family to make good decisions.

[bowhuntvideo]

How may of you are looking at retirement of within 5 years are looking at over 1 million $'s in retirement savings for this, plus SS! Just wondering.

Way over if you wish to hunt, fish and travel, even modestly


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[JeffJ]

My house has gone up about 50% in value over the last 7 years. That is the type of investment I want to put my cash in. The risk is very low compared to the market.
Just another way to think of it.

...and the S&P is up 225% over the last 7 years.

[Murph]

Your house would have gone 50% if you continued to make the minimum payments. Think how much money you could have made by buying rental property with the extra principal you were pumping into your house.

That's were Dave Ramsey misses the boat imho. Calculated debt is not a bad thing.

I have looked at amortization tables and total payoffs for a mortgages. They are all front loaded with interest. Like 40% interest at the beginning. I am pretty sure that would be impossible to make up by investing. I used to think that if i can make more than the interest rate , then I am winning, but that does not turn out to be the case with mortgages.

Some of you guys are advising getting 2 mortgages, which means in the first 2 years I am paying double the amortization %%%%. Not for me.

[CaptainDave]

Dave has some great things to say, but I sometimes cringe at his constant push to "pay off the mortgage". Yes, it's good to own your home, but for many folks, rushing to pay off a debt that may only be at 2.5-3% interest (1/3 of which you may get back on taxes, so really 1.5-2% or so), rather than ploughing that money into retirement, which might return 8-12%, is silly.

What is NOT silly is avoiding six figure school loans to train for jobs making $50k a year, and avoiding the urge to buy a $60k F250 Powerstroke every 4-5 years to tow your $20k Ranger or $50k fifth-wheel.

X3

As crazy as it sounds, Dave really teaches more financial common sense. What's crazy is that sort of common sense is never taught in school, or even in a lot of college programs for that matter.

I do believe in some of Dave's principles, but not all of them. However, I really do believe that most people get into trouble with the intense marketing that occurs in our society. It's the buy it now attitude that is all over the place. In reality, there are a lot of things that people could pay cash for if they simply saved up for several months as compared to putting it on the credit card. There's also tons of people that never seem to own a vehicle, but rather pay on a loan a few years and just get another; same with toys. This is not just a poor people thing either. There's plenty of 6 figure income families that fall under this same umbrella.

[Murph]

...and the S&P is up 225% over the last 7 years.

What is the risk factor? What happens if we have a 9/11 again. If you have 600,000 in the market vs 600,000 in your house. My house is my biggest asset.
Dont get me wrong, I put money in the market, but I am not putting a large percent in it.

[35remington]

Think how much money you could have made by buying rental property with the extra principal you were pumping into your house.

Those rental house mortgage payments sure are fun to make after you lose your job.

[Kdog]

I am not ready to retire, but I am ready to stop working. Just can't figure out how to get paid that way!

[Capt.Brown]

Those rental house mortgage payments sure are fun to make after you lose your job.

This^^^