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Dave Ramsey - Smart or Stupid?

I got really into Dave Ramsey content and saving/spending principles within the last year. I follow his plan pretty religiously. Wanted to hear everyone's thoughts. Pro? Anti? Too boring? Too safe? He's had a positive impact on my money habits. My family, friends, or colleagues hear me talk about the principles I've adopted and they think I'm crazy (and boring).


Basic principles:

- No credit cards, no debt (other than a mortgage)

- Budget every dollar, every month

- 3-6 months emergency fund

- Invest 15% (in mutual funds)


Some of his ideas are a bit much for me, for example, he says don't buy a house unless it's a 15-year fixed, 20% down, mortgage no more than 25% of your take-home pay. Unrealistic in my opinion.


Thoughts?

💸 Investing
💡 Education/Resources
💴 Money Management
20
Avon
Politicker
+7
Account Executive
His advice is solid for the 70% of Americans who are not very financially savvy or even responsible. I think he does good work. If you’re trying to go more of a FIRE route, I’d recommend someone like Graham Stephan. Very punchable face, but he makes good content
UserNotFound
Politicker
+10
Mid Market Manager
Very punchable face… I can’t wait to google this guy! 😆
CuriousFox
WR Officer
+13
Senior Account Executive
That sentence made me want to look him up immediately.
Show 1 more replies
sav
Valued Contributor
+3
Account Executive (Enterprise)
You’re so right about the punchable face!
cw95
Politicker
+6
Pricing Executive
hahah, the worst. I do feel for people like this! haha
privateryan
Politicker
+8
Director of Sales
I agree with this 100% - I wouldn’t say it works for me NOW but when I was at a lower income and more risk adverse, he was gold. Very good process for kicking bad money habits. 
funcoupons
WR Officer
+11
that's queen coups to u
He's very conservative and risk-adverse. His advice will work for some, but not everyone. He's less likely to be appealing to high income earners like many of us in the WR. 

Depends on what your financial goals are in life. If you want to own a business, create passive income such as investments/real estate, or take advantage of credit card churning Dave Ramsay is not your sage. If you want to keep things simple, avoid risk, and are willing to go slow and steady he'll be appealing. 
MrFirmHandshake
Good Citizen
+2
Recruiter
For sure. It's baffling how many callers he's had who make $250,000 and are $400,000 in debt. He's the kind of guy you value when you need it, but he's far from the sexiest plan. 
funcoupons
WR Officer
+11
that's queen coups to u
He's a good place to start for a very young person or someone who's dug themselves into a hole financially. Not so much for the highly financially literate or sophisticated investor.
jefe
Politicker
+8
Sales Director
Credit cards, used responsibly, are such a powerful tool. Especially when you've got money coming in.

Points, travel and rental card insurance? Absolutely. Might have to try out the PC Optimum card at some point... Those Optimum points are basically as good as cash.
poweredbycaffeine
WR Officer
+9
Bean Juice Drinker | Sales Savant
I am a Ramit Sethi fan. Dave is too stringent for me.
MinisterOfChaos
Politicker
+8
Commercial Account Executive
Ramit's "I Will Teach You to be Rich" has saved my marriage.

i don't care what stage of financial literacy you're at, you should read the book, and listen to his new podcast, as it provides a GREAT framework for how you can/should manage your money.
GrizzleMcThornBody
Politicker
+10
EVP - RevOps
Depends on your personal risk tolerance.

I don't like Grant Cardone but he had a line one time that I enjoyed. He mentioned debt leveraging to grow your wealth. It's the same things banks do.

Most people are terrible with money so they get a credit card or loan and instead of investing it in an option to earn more money (real estate, business growth, new revenue stream) they turn it into dead money (lunch, coffee, clothes, etc.).

But Dave is okay if that's your strategy.
AllBiteNoBark
Politicker
+9
Account Executive
Dave is for folks to dig themselves out of debt, I would look elsewhere to learn how to build generational wealth. He helped me a lot when I was younger but I wouldn't apply his principles now. 
softwaresails
Politicker
+4
Sales Manager
I love a lot of his ideas when looked at individually. But I don't like everything he talks about.

I know there are people out there who can't have a credit card because they will spend way more than they should but that advice for every single person is just dumb.

Use a credit card, and get cash back / points and be smart and pay off your balances at the end of every month.
MrFirmHandshake
Good Citizen
+2
Recruiter
Totally agree. I actually don't follow the credit card philosophy, it creates more issues down the road with a "N/A" credit score. 

I do roll my eyes at the fact that I need a credit card (debt), to build a credit score (debt score) to establish credibility to pay back more debts..
ju
justatopproducer
Politicker
+4
National Consultant
Mmmm. I wouldn’t say boring but usually thr goal of all this is to work the minimal amount of time possible then retire. If I could change one thing that ive done over 15 year it would be buy a house as early as i could. Regardless of money down. I know many friends who lease multiple homes and really dont make a ton in their everyday 9-5. But are well off and looking to retire around 50. So when good investments stick their head out do your best to take a risk rather than wait to put down 20%. And if you have that why put it down when you can make a larger return on investing (sometimes).
TheRealVladimirPutin
Opinionated
+5
AE
Mostly good advice, some I disagree with. His attitude and some of his views rub people in the Gen Y/Z cohorts the wrong way, "If you have debt, you shouldn't see the inside of a restaurant til it's paid off" etc 
MrFirmHandshake
Good Citizen
+2
Recruiter
Have heard that comment from him many times. "The only time you'll see the inside of a restaurant is if you're working your second job" to be exact. 
rubberducky
Opinionated
+4
SAE
European here, but youtube brings you places.. I agree with @funcoupons. Followed him for a year, decided to be more responsible with my money and paid off my student loan in that year, instead of doing it in 30 years. He was the eyeopener that I needed at that moment, but now moved on to something that fits me and my financial goals better. Just like other companies, DR has a target group and his method will be beneficial to a lot of people, but is not for everyone.
Do.it.for.the.checks
Politicker
+7
Account Executive
I'm a spender, so I hate the budget every dollar concept.

I like to automate bills and goal-based savings. And then add 50% of commission into savings.

To me this gives you the best of both worlds. I have a "budget" but roughly 25% is fuck around money. I put dates, events, vacations, etc. Into this category.

Credit cards if used correctly are amazing for free shit. Use as a debit card then payoff at end of month.

We live in 2021, use a low fee robo-advisor. Not mutual funds. Make sure its one that lets you choose goals, time frames, and level of risk.
Do.it.for.the.checks
Politicker
+7
Account Executive
Key is automation. Don't have to save when its pulled from your bank account on payday
LordBusiness
Politicker
+8
Chief Revenue Officer
I say to each their own when it comes to these things. It really all depends on what blows your hair back. I’m a “you can’t take it with you” kind of guy, so I make what most would consider poor financial decisions all the time—- and for the most part I’m solid. Having no debt is fine for some, but damn the new Escalade is beautiful…..
girheakinna
Politicker
+4
da best SDR
I’m frugal like Dave but I am a credit card freak like Graham Stephen
goose
Politicker
+12
Sales Executive
He fixes shit. He’s not for wealthy people.
sav
Valued Contributor
+3
Account Executive (Enterprise)
I love listening to his show because it’s very entertaining. I agree with all of his principles for the masses. I follow his plan for getting out of debt but I use a credit card for all purchases and pay it off every month. Also I’m a bit of a Bogle head so I think indexing is better than picking mutual funds because you can have a pretty much non existent expense ratio. I think he recommends the mutual funds so he can keep his endorsed provider program alive and more people to augment his mission.

I’m getting very aggressive about my mortgage currently so I can get my cost of living very low. If you pay your mortgage down quick enough (less than 5 years) you minimize the opportunity cost of investing that amount at a higher rate. If you pair that with a much higher savings rate once you’re house is paid for, you’ll make up the difference quickly. 
vidalSaaSoon
Opinionated
+1
Account Executive
You aren’t going to fuck up financially if you follow him. You will also be capped at market returns and it won’t be very exciting. That being said, I would recommend following him for anyone who doesn’t have the time/interest to learn the financial markets. 
Puncheur
Fire Starter
+1
Sr RevOps Manager
Debt snowball principle is solid. House buying advice is impossible. 
th
thesheriff
Good Citizen
Mid Market AE
Dave Ramsey is good for people who are bad at money. Credit cards aren't a bad thing at all, its all about how you spend your money. Credit cards protect you from fraud and protect your purchases. I broke my $800 TV within the first month of having it and they replaced it for free. 
Also not all debt is bad.
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