Dave Ramsey--The Way to Go ! ! !

[horns]

Hi all

Ive been hanging out in this forum for over 5 years. I've learned a lot and love all of the info that I got from here. In fact, if it wasnt for this site, I wouldnt have gotten my home loan that I pulled thru 3 years ago.

I must say I started listening to Dave Ramsey about 2.5 years ago after I got the house. I know a lot of people on this forum think that credit is sexy and is the way to go, but if you listen to this guy you will quickly learn why "credit" is not so good. What is so great about having a First Premier credit card with all of the monthly and annual fees when your credit limit is only "300 dollars"?

His philosphy is quite impressive. In fact, he calls the "credit score" the "I love debt score" and if you listen to him for a while you'll realize why he calls it that.

Check him out: www.daveramsey.com

He is a millionaire 100 times over but has a credit score of "0" b/c he doesnt borrow money. He was actually bankrupt at one point but has grown to a point where he is by far one of america's most influential financial TV personalities.

http://en.wikipedia.org/wiki/Dave_ramsey

He actually has a slot on the new FOX news Financial network and is also on CBS morning show once a week. A great man with a great philosphy that is working for me...FYI for all of you. In fact I dont even own or want to have any credit cards anymore. He taught me a lot by listenting to him. Funny thing is that is website only accepts "debit cards" b/c he hates the credit cards so much. He is awesome. If you havent heard of him, check him out. It is the best to hear his callers call in and scream at the top of their lungs "IM DEBT FREE"

FYI for all of my ole pals on here. I know that a lot of you might think that this is a joke, but if you follow his "baby steps" and "financial peace university" program it will work...Just listen on sirius or xm or find a station locally that broadcasts his shows daily and you will see. This is not a scam, he is not a scam, he changed my world in about 2 years.

Thanks all

FYI

horns

[ShortBus]

I listen to his show on occasion and agree with a lot of his advice. However, I'm very skeptical of anyone who claims to have all the answers, which is the air he has because he frequently gives very simple answers to complex financial matters. He is also heavily tied to his advertisers (Identity theft insurance? Come on...)

Swearing off all credit is also foolish advice--assuming that you have the knowledge and self-control to properly use it. You aren't going to have much luck getting a mortgage unless you can find someone willing to manually underwrite the loan. It's even harder to find someone to manually underwrite a car note. With almost all credit cards giving you at least a 25 day grace period, that's an interest fee loan. The better cards sometimes offer 0% APR for 6+ months. I've known people who've charged $20k on such cards and deposited the money in a high-interest rate savings account. Etc, etc... Everything in moderation. Learn to properly manage your credit and it can really work to your advantage.

[chucksnee]

Is this the second or third post that is making him out to be the all mighty king of debt reduction?

****He is a millionaire 100 times over but has a credit score of "0" b/c he doesnt borrow money. He was actually bankrupt at one point but has grown to a point where he is by far one of america's most influential financial TV personalities****

He had to borrow money to get to that point.

[debtmamma]

OK I missed it what is wrong with credit? I thought that is how companies grow?

[ShortBus]

OK I missed it what is wrong with credit? I thought that is how companies grow?

Ramsey has a problem with personal credit, not business credit (as far as I can tell).

I can see both sides of the argument. This country is absolutely drowning in consumer debt. Telling people to break the credit addiction is a great first step. But as I said before, his advice is too simplistic. The reason it's simplistic is that people are drawn to easy-to-understand sound bites. Think about all the self-help books out there--everyone seems to be selling a "simple, sure fire" way to solve any problem you have. Unfortunately life rarely adheres to a series of bullet points and when things don't go quite according to plan, the advice breaks down and isn't as valuable as it originally seemed.

What Ramsey ought to be doing is educating people how to properly use credit rather than telling them to not use it at all. But that's a lot harder to teach and a lot harder to sell. People need to learn to control their habits of overconsumption. Their credit woes are just a symptom of their spending addictions, it's not the actual disease. Once a person learns how to live within their means, rationally manage their money, and how to reconcile their needs vs. wants, their credit problems begin to solve themselves and their good credit magically begins to work to their advantage.

[gypsie]

THis is not the first Dave Cheerleader to "rah rah" Dave on this forum.

I like him too, He offers some wonderful advice for the most part....but to live without a credit score is also a gamble, one never knows when they will actually NEED credit, life's to unpredictable.

[zfire]

gypsie is correct.

It is nice to know it is there.

[razr]

Plus us non-millionaires need things like car insurance. And houses.

-r

[PCS]

My newly acquired in laws just finished up his get out of debt course and all I keep hearing about is no one should have credit or any debt. Who cares about your credit score!

I own a mortgage bank, if you call me and you want a loan I care about your credit score!!!! The insurance company insuring the house cares about your credit score, when you open a bank account, get employment and so on. He has some very insightful thoughts and beliefs. If you make $8 you should not have or get credit cards. 99% with be charged off and yes if it is capital one your limit will be $200 when it is charged off and in a couple years your balance will be $1900. I like capital one because I pay my credit cards off each month, but if you do not pay them they will make your credit life tough.

[secondchances]

I am a Clark Howard kinda gal myself. Dave's debt snowball works for a lot of people including me.

[poorkchop]

A "0" score and no debt sounds a lot better then a 720 score with a bunch of debt to me. I think Dave has the right idea.

[chucksnee]

A "0" score and no debt sounds a lot better then a 720 score with a bunch of debt to me. I think Dave has the right idea.

Maybe, if you had a few million in the bank. Why would you want to pay more for insurance and little things like that because you have a zero credit score? Becasue you have a high credit score does not mean you have alot of debt to go with that score.....

The biggest thing is to learn about credit and not abuse it, just becasue you have the credit to use does not mean you have to use it.

[VeVe]

I saw a bit of this guys show when I got home last night (3am - great time slot).

I didn't like him at.all. He didn't really seem to take anybody's personal situation into consideration - he was solely interested in telling them to get of their existing debt immediately no matter how they did it.

One woman had $75,000 in debt but her primary home was payed off. The debt came from her leaving her job to start her own business which didn't so so well and her previous annual income was gone (though he never really addressed any of that at all).

She had inherited a home from her in-laws worth $25k and had three car loans worth $30 (two were for her children - she has three in collage) and then some personal loans and very little CC debt. He flat out told her to sell the inherited home AND the cars. WTF? She pointed out that though her car loan is around ~20k, it's not worth that much. He didn't care and told her to buy clunkers instead (because there won't be any costly mechanic bills involved there, right? ).

He didn't take into account the loss on the cars, the taxes and costs involved in selling the home (which she could probably rent and have some income that way), etc. His suggestions were costly.

I would be scared to take his advice. He doesn't seem to be living in the real world.

[Robert Nashville/Savannah]

I love it when people who have likely had huge difficulties with credit and aren't millionairs decide that a self-made millionair who did it following the same advice he gives others that he "isn't living in the real world".

If you've got a six month emergency fund and you've started to build your investments you can do a lot of self-insurance or take very high deductables; you don't have to rely on insurance companies that only rely on credit scores.

You don't need loans (for a mortgage or anything else) if you don't go into debt and insted, save for what you need before you buy it.

As has bees said about compound interest, those who understand it receive it; those who don't, pay it.

In other words, if you want to be a millionair; start thining like they do; if you don't, keep doing what most people do and keep buying things you can't afford and sending all you money to banks and insurance companies.

[Slow Eddie]

He sounds kind of cultish to me. Anyone want to loan me enough money to buy his course?

Eddie

[2001Badyear]

I love it when people who have likely had huge difficulties with credit and aren't millionairs decide that a self-made millionair who did it following the same advice he gives others that he "isn't living in the real world".

If you've got a six month emergency fund and you've started to build your investments you can do a lot of self-insurance or take very high deductables; you don't have to rely on insurance companies that only rely on credit scores.

You don't need loans (for a mortgage or anything else) if you don't go into debt and insted, save for what you need before you buy it.

As has bees said about compound interest, those who understand it receive it; those who don't, pay it.

In other words, if you want to be a millionair; start thining like they do; if you don't, keep doing what most people do and keep buying things you can't afford and sending all you money to banks and insurance companies.

Oh please!!

Let's say your plan is to make your first million via savings. No credit, which you don't need or want. You make 100K a year and can somehow save 50K a year. Forgeting the interest that could be gained for simple claculations you'd have 1 million in 20 years.

On the other hand, put 50K down on a house each year and aquire loan on remaining balance, nothing special just a 3BR 1800 Sq. and rent it out. Do the same every year with the next 50K and so on.

Example 2 requires credit, example 1 requires no brain matter.

Which method makes the most money at the end of 20 years?

OPM is a tried and true method and requires, in nearly every case, credit.

[justincase]

Is this the second or third post that is making him out to be the all mighty king of debt reduction?

****He is a millionaire 100 times over but has a credit score of "0" b/c he doesnt borrow money. He was actually bankrupt at one point but has grown to a point where he is by far one of america's most influential financial TV personalities****

He had to borrow money to get to that point.

Yep!

[VeVe]

He sounds kind of cultish to me. Anyone want to loan me enough money to buy his course?

Eddie

Seriously, watch him sometimes. I swear he just says whatever pops into his head without really thinking it out. It's kind of scary. The odd thing is that he doesn't say anything in any type of convincing manner, but people seem to think he's so brilliant and I just don't get it.

I certainly don't think people should live on credit cards or live beyond their means, but I think it's foolish to think credit is a non-necessity in life. Everyone needs a security blanket, regardless of how wealthy they are.

Anyway, he's on the Fox Business channel (or something like that). Looks like he's on at 8pm tonight. Check him out.

[razr]

You don't need loans (for a mortgage or anything else) if you don't go into debt and insted, save for what you need before you buy it.

That's stupid. I need a house now, not in 20 years when I save up for it.

-r

[VeVe]

What is his opinion on student loans? If you can't pay cash for college, then don't go? Seriously I would love to know this.

Student loans are my biggest debt, and college is the reason I had credit cards (and problems paying them). I didn't expect, or want, my parents or anyone else to finance my education. I did it all myself. Twice. Yes, I'm still paying for it, but the thing is that I am paying for it.

[Robert Nashville/Savannah]

That's stupid. I need a house now, not in 20 years when I save up for it.

-r

Of course; it's stupid...every advertisement on TV tells us so!

It's stupid to live on 1/2 your salary for three to five years and pay cash for (or at least a huge down payment on) a home when you can just get a mortgage and pay for it three times over.

No one NEEDS to buy a house, they do need a place to live but owning a house is not always the best solution. While most people, me included, don't have a big problem with a reasonable home mortgage, all it takes is some sacrifice to do it without a mortage (sacrifice is yet another word that few people like to here today).

Of course, we have lots of people today who don't even have a down payment - they finance 100% of the purchase, plus PMI; probably while buying more home than they either need or should buy and then wonder why they don't have any money to save for retirement.

[Robert Nashville/Savannah]

What is his opinion on student loans? If you can't pay cash for college, then don't go? Seriously I would love to know this.

Student loans are my biggest debt, and college is the reason I had credit cards (and problems paying them). I didn't expect, or want, my parents or anyone else to finance my education. I did it all myself. Twice. Yes, I'm still paying for it, but the thing is that I am paying for it.

He woldn't say don't go; he'd say do it without debt.

I've done two bachelor degrees and a masters without any student loans and I'm currently working on another masters. Consequently, it's difficult for me to buy into the notion that that it can't be done without student loan debt.

All I did was work while going to school; none of my employeers, until my current one, reimbursed for educational expenses (and this one doesn't reimbursement at 100% unfortunately)...I didn't go to Harvard or Yale but I didn't go to cheap schools either.

[VeVe]

No one NEEDS to buy a house, they do need a place to live but owning a house is not always the best solution. While most people, me included, don't have a big problem with a reasonable home mortgage, all it takes is some sacrifice to do it without a mortage (sacrifice is yet another word that few people like to here today).

A one bedroom apartment here is $800/month minimum. Plus utilities. Plus paying for student loans, car (which is a reasonable amount), and basic necessities. I make a decent living, but after taxes, 401K contributions, etc, there is very, very, little left. For me to save to buy a house (which would be minimum $150k) would take me well over 20 years, and by that time that the housing prices will be far above what they are now.

Now you tell me how to buy a house without a mortgage.

[VeVe]

He woldn't say don't go; he'd say do it without debt.

I've done two bachelor degrees and a masters without any student loans and I'm currently working on another masters. Consequently, it's difficult for me to buy into the notion that that it can't be done without student loan debt.

All I did was work while going to school; none of my employeers, until my current one, reimbursed for educational expenses (and this one doesn't reimbursement at 100% unfortunately)...I didn't go to Harvard or Yale but I didn't go to cheap schools either.

But you're not telling me HOW to do it.

I went to Penn State. Not expensive, but there was absolutely no way I could pay cash while attending. I tried and was held back a semester for being delinquent in my tuition payments. That's why I had to get loans. It was the only way. And I worked full time while attending school (also full time).

[Robert Nashville/Savannah]

But you're not telling me HOW to do it.

I went to Penn State. Not expensive, but there was absolutely no way I could pay cash while attending. I tried and was held back a semester for being delinquent in my tuition payments. That's why I had to get loans. It was the only way. And I worked full time while attending school (also full time).

I don't know what to tell you then...I worked full time and paid my tuition/books out of my salary...I had no debt so all I had to pay outside of tuition was my housing, utilities, food, etc. I have to admit, during my two bachelor degree programs, I didn't do much else but work and go to school which is why I finished two degrees in three years.

I certainly make more money now than I did then but except for a significantly better lifestyle, that's pretty much the way it is for me now.

Obviously if you have a spouse, young children, etc. it gets progressively more difficult but there are literally thousands of scholorships out there and if you make a part-time job out of applying for several hudred each year, you'll very likely end up with enough scholorship money to cover your tuition and books. Most people don't do that which is why millions of dollars of scholorship money goes unclaimed each year but it is there.