Issue with advice Dave Ramsey gave yestereday

[maat55]

I'm surprised he didn't advocate to stop both savings. But I agree, that if you have extra funds other than those needed to go to college yourself, the rest should go towards your retirement first.

[disneysteve]

I'm surprised he didn't advocate to stop both savings. But I agree, that if you have extra funds other than those needed to go to college yourself, the rest should go towards your retirement first.

There was no reason to stop both. The guy had enough money to pay for his own college and put money away for either his kid or retirement but not both. I just think retirement should be the higher priority, even if it is only for a couple of years.

[maat55]

There was no reason to stop both. The guy had enough money to pay for his own college and put money away for either his kid or retirement but not both. I just think retirement should be the higher priority, even if it is only for a couple of years.

I rarely listen to him these days, I spend more time listening to political talk. After a few years you get the jest of it. But I'm glad to see you have come around somewhat.

[disneysteve]

I rarely listen to him these days, I spend more time listening to political talk. After a few years you get the jest of it. But I'm glad to see you have come around somewhat.

I had often read or heard his advice but had never actually heard his show. Although I still disagree with certain aspects of his advice, I could say the same about pretty much any financial guru out there. There isn't one perfect talking head with whom I agree 100% of the time.

I've been enjoying listening to the DR podcasts. I have definitely noticed a difference between his show and Suze Orman's show: demographics. Callers to DR tend to be from rural areas with household incomes below national median. Not all, for sure, but an awful lot. I'm surprised by how many callers earn 20K or 25K or so. No wonder they are having financial troubles. On Suze's show, a great many callers earn 6 figures and sometimes mid-6s. While callers to Dave are trying to figure out how to pay off credit card debt, callers to Suze are trying to figure out if they can afford a 28-foot sailboat.

That's not to say that one show is better than the other. I think financial advice is financial advice. The rules are the same no matter how much you earn: spend less than you make, save 15% for retirement, get out and stay out of debt.

[maat55]

I had often read or heard his advice but had never actually heard his show. Although I still disagree with certain aspects of his advice, I could say the same about pretty much any financial guru out there. There isn't one perfect talking head with whom I agree 100% of the time.

I've been enjoying listening to the DR podcasts. I have definitely noticed a difference between his show and Suze Orman's show: demographics. Callers to DR tend to be from rural areas with household incomes below national median. Not all, for sure, but an awful lot. I'm surprised by how many callers earn 20K or 25K or so. No wonder they are having financial troubles. On Suze's show, a great many callers earn 6 figures and sometimes mid-6s. While callers to Dave are trying to figure out how to pay off credit card debt, callers to Suze are trying to figure out if they can afford a 28-foot sailboat.

That's not to say that one show is better than the other. I think financial advice is financial advice. The rules are the same no matter how much you earn: spend less than you make, save 15% for retirement, get out and stay out of debt.

DR's advice is great for those who need an boot camp approach to finances. What I like most about his method is that it is meant to be intense. IMO, most people do not want to be sophisticated with their finances and need an simple approach, this is where DR's method works well. With time, some people will advance if they choose, I'm not the hardcore follower I used to be, but I appreciate his method. People may be able to improve on it, but not hurt from it.

[disneysteve]

DR's advice is great for those who need an boot camp approach to finances. What I like most about his method is that it is meant to be intense. IMO, most people do not want to be sophisticated with their finances and need an simple approach, this is where DR's method works well. With time, some people will advance if they choose, I'm not the hardcore follower I used to be, but I appreciate his method. People may be able to improve on it, but not hurt from it.

In most cases, there is not one "best" answer to how to deal with a financial problem. I was recently part of a committee that selected a new financial management firm for a non-profit I'm part of. After intense review of multiple proposals, we all agreed that any one of them would be a vast improvement over our current system, so there truly was no wrong answer. The same is true for personal finances. Is snowballing by smallest to largest debt that much worse than doing it by highest to lowest interest rate? In the grand scheme of things, it really doesn't make much difference. Yes, the interest rate method will save you a few extra bucks, but either way will get you debt-free pretty quickly if you stick to the plan. I'm a numbers guy so I prefer the cheapest method but I recognize that some people are more emotion-driven so the other way works better. Different strokes...

[maat55]

In most cases, there is not one "best" answer to how to deal with a financial problem. I was recently part of a committee that selected a new financial management firm for a non-profit I'm part of. After intense review of multiple proposals, we all agreed that any one of them would be a vast improvement over our current system, so there truly was no wrong answer. The same is true for personal finances. Is snowballing by smallest to largest debt that much worse than doing it by highest to lowest interest rate? In the grand scheme of things, it really doesn't make much difference. Yes, the interest rate method will save you a few extra bucks, but either way will get you debt-free pretty quickly if you stick to the plan. I'm a numbers guy so I prefer the cheapest method but I recognize that some people are more emotion-driven so the other way works better. Different strokes...

Agreed.

[elessar78]

How much did the caller have in his retirement account? Maybe DR deemed that he was ahead of the curve in terms of funding his retirement, so funding the 529 wasn't such a bad idea at this point?