Dave Ramsey Doesn't Work

[GrillmasterJoe]

You get out of it...

I have not taken DR's Financial Peace University. I purchased his book "The Total Money Makeover" several years ago and applied the principles from that book, modified to meet my own situation, and was able to pay off over $40k in credit card debt in just under three years. We were blessed to have no major illnesses in our family, but we did have several $1k-plus car issues in that time. We said no to a lot of things and a lot of people, but the budget and the debt snowball worked for us. We did not sell our late-model vehicle in favor of a "beater" because my wife used it to drive to work 40 miles each way each day and we needed something dependable. I drive a 12-year-old Camry which continues to run well post-repairs. We will pay off the wife's vehicle in March.

No, DR is not for everyone, but he has stated that numerous times throughout his career. There are situations where circumstances make your finances so severe that his principles cannot help you. But I would maintain that everyone can and should do a budget, and everyone can and should speak with creditors to work out payment plans that can work for them. Having dealt with my elderly father's finances for a couple of years now, I know that most medical facilities are willing to work with you, as long as you communicate with them.

[elessar78]

I agree with your statement that a person with several million in the wrong mutual fund is better off than someone with 50k in the the most savvy funds. I'm not sure what point this makes.

If I have several million, I want to invest that money the best way I can. If I have 50k, I want to invest that money the best way I can.

If you're trying to imply that following DR's investing advice will lead to those several millions, I strongly disagree. You do not achieve maximum growth by paying high commissions and high fees.

DR's typical listener is in their 30s or 40s and has too much debt. Unless they are a very high earner, it is too late for them to amass several million. They must first pay off their debt. Then they will have perhaps 20 years to grow their nest egg? The aren't going to get to several million, the math simply does not work. (Unless the person is a high earner. If a person is able to invest 50k per year for 20 years, then sure, that could end up being several million. Not certain, but possible.)

My point is that through good behavior (i.e. saving fanatically, "gazelle intensity") you can save a lot of money. Ok, sure millions might be out of touch for late starters but if you get into the good habits and start amassing money then you'll probably (more than likely) go deeper into learning how to invest.

If DR gets you out of debt, then you'll prob. take his advice on the mutual funds too. But good point about simplicity and just taking a total stock market fund.

[elessar78]

FWIW, I contacted a Dave Ramsey Endorsed Local Provider "ELP" for advice on retirement savings. He called me back and was really willing and gave good, sound advice with no hint of a sales pitch. Out of courtesy, unprompted, I asked him if he had any info on Roth IRA funds he could send me.

The next day I got an e-mail with a pdf attachment. He prefaced the e-mail by saying here's some Roth offerings with their recent performance listed (alarm bells). I look through the funds and they resemble DR's recommendations BUT the big red flags were that all the funds were front load funds (5%) and they carried an additional, high net asset fee.

It was a disappointing turn of events.

[Petunia 100]

FWIW, I contacted a Dave Ramsey Endorsed Local Provider "ELP" for advice on retirement savings. He called me back and was really willing and gave good, sound advice with no hint of a sales pitch. Out of courtesy, unprompted, I asked him if he had any info on Roth IRA funds he could send me.

The next day I got an e-mail with a pdf attachment. He prefaced the e-mail by saying here's some Roth offerings with their recent performance listed (alarm bells). I look through the funds and they resemble DR's recommendations BUT the big red flags were that all the funds were front load funds (5%) and they carried an additional, high net asset fee.

It was a disappointing turn of events.

DR states plainly he recommends you work with a commissioned salesperson. Then he lists some "preferred" ones for you to contact. So, it shouldn't be too much of a surprise that a commissioned salesperson intends to charge you a commission.

Fortunately, you were knowledgeable enough to realize you didn't need to lose so much of your money to commissions and high fees. Unfortunately, many people aren't.

[elessar78]

DR states plainly he recommends you work with a commissioned salesperson. Then he lists some "preferred" ones for you to contact. So, it shouldn't be too much of a surprise that a commissioned salesperson intends to charge you a commission.

Fortunately, you were knowledgeable enough to realize you didn't need to lose so much of your money to commissions and high fees. Unfortunately, many people aren't.

BTW, not that you implied it, but I actually contacted him for the sake of this discussion. I really was just curios. I don't follow DR closely, but never realized that he recommends a commissioned sales person. It seems out of character and creates a conflict of interest right off the bat.

[Petunia 100]

BTW, not that you implied it, but I actually contacted him for the sake of this discussion. I really was just curios. I don't follow DR closely, but never realized that he recommends a commissioned sales person. It seems out of character and creates a conflict of interest right off the bat.

Oh, you just recently did this? I was thinking it was something you had done at some point in the past. Gotcha, thanks for clarifying.

[cedarchick]

Disney Steve?

Disney Steve - I'm a single mom, with a great job at a large bank. I've used DR's envelope system from time to time, Tried to map out the debt snowball etc. I'm doing alright mapping out my life but feel I'm missing some big steps somewhere. Spending too much even though I think I'm not? things like that. I like your philosophies and your comments/advice to the gentlement who is clearly struggling (and I felt for you sir). Are you an investment advisor? It seems like you know your stuff and if you are indeed, I'd like to get more info from you. incidentally i'm not "saving preschooler." how did that populate?

[bigdaddybus]

"savings preschooler" means you are new to the forum...ie you only have 1 post. DisneySteve is a physican, and I agree he has his head screwed on right from what I have read Maybe he will see this reply and jump in.

[lorraineb]

Disney Steve - I'm a single mom, with a great job at a large bank. I've used DR's envelope system from time to time, Tried to map out the debt snowball etc. I'm doing alright mapping out my life but feel I'm missing some big steps somewhere. Spending too much even though I think I'm not? things like that. I like your philosophies and your comments/advice to the gentlement who is clearly struggling (and I felt for you sir). Are you an investment advisor? It seems like you know your stuff and if you are indeed, I'd like to get more info from you. incidentally i'm not "saving preschooler." how did that populate?

I would encourage you to lay out your budget here and have the entire forum take a look at it. The more eyes, the more input you'll get to figure out what is the best approach for you. For example, if you still have debt, you shouldn't be looking for investment advice -- you should be seeking advice to pay down that debt asap.

[Petunia 100]

I would encourage you to lay out your budget here and have the entire forum take a look at it. The more eyes, the more input you'll get to figure out what is the best approach for you. For example, if you still have debt, you shouldn't be looking for investment advice -- you should be seeking advice to pay down that debt asap.

Yes, but please start a new thread. You will get more views and response that way.

[disneysteve]

Disney Steve - I'm a single mom, with a great job at a large bank. I've used DR's envelope system from time to time, Tried to map out the debt snowball etc. I'm doing alright mapping out my life but feel I'm missing some big steps somewhere. Spending too much even though I think I'm not? things like that. I like your philosophies and your comments/advice to the gentlement who is clearly struggling (and I felt for you sir). Are you an investment advisor? It seems like you know your stuff and if you are indeed, I'd like to get more info from you. incidentally i'm not "saving preschooler." how did that populate?

Welcome to the site. I agree with the others. Start a new thread. Tell your story and post your budget. Plenty here will be happy to help pick through it with you.