Chavez Posted February 24, 2008 Share Posted February 24, 2008 Why do people need to pay money to be told the blazingly obvious? Value. Quote Link to comment Share on other sites More sharing options...
polksalet Posted February 24, 2008 Author Share Posted February 24, 2008 Dave Ramsey vs. The Shiznit See how The Shiznit reacts to Dave's disciplines http://www.youtube.com/watch?v=6zu0l7RGqb0 Quote Link to comment Share on other sites More sharing options...
Double Agent Posted February 24, 2008 Share Posted February 24, 2008 What, you mean stuff like "Don't spend more than you earn", "Pay off your credit cards every month", "If you do take out a loan, make sure you can definitely afford the repayments", etc? Complicated stuff like that? Why do people need to pay money to be told the blazingly obvious? Ursa, what world do you live in? How many self-help books are actually new theories? They're just recycled to appeal to a new generation. It's hard to take your point seriously since you haven't read the book. There is some good info in there that I wouldn't call obvious. Nevertheless, some people need to be held accountable. I think that's what Ramsey does to his fans. Why would someone pay good money to join weight watchers? You know the plan and the food...why pay the money for the meetings? Accountability. Quote Link to comment Share on other sites More sharing options...
Chavez Posted February 24, 2008 Share Posted February 24, 2008 Why would someone pay good money to join weight watchers? You know the plan and the food...why pay the money for the meetings? Accountability. That works for Weight Watchers and AA. Dave Ramsey doesn't give a crap if you follow his advice or not, so long as you buy his book. Quote Link to comment Share on other sites More sharing options...
Skippy Posted February 25, 2008 Share Posted February 25, 2008 Jimmy Neutron – since you teach this Ramsey discipline in a informal setting, would you be willing to sort of summarize this thing for us? I know, as I have looked at his website, that there are 13 chapters so I am assuming there are thirteen lessons. I am not asking you to totally go into the entire thing but could you maybe walk us through the chapters with a summary? If this is asking to much then I understand but if it is something that you could do and are willing to do, I for one would be interested. I am always willing to explore an avenue that might help me out. Step one for me would be giving up my golf habit that pretty much has me paying for two of us each time I go. Quote Link to comment Share on other sites More sharing options...
Furd Posted February 25, 2008 Share Posted February 25, 2008 I've never heard of the guy. Quote Link to comment Share on other sites More sharing options...
Furd Posted February 25, 2008 Share Posted February 25, 2008 From wikipedia: One notable difference between his and other financial shows was that Ramsey attempts to go beyond the mathematical mechanics and reach his callers through an emotional and spiritual level.[9] No thank you. Quote Link to comment Share on other sites More sharing options...
polksalet Posted February 25, 2008 Author Share Posted February 25, 2008 Jimmy Neutron – since you teach this Ramsey discipline in a informal setting, would you be willing to sort of summarize this thing for us? I know, as I have looked at his website, that there are 13 chapters so I am assuming there are thirteen lessons. I am not asking you to totally go into the entire thing but could you maybe walk us through the chapters with a summary? If this is asking to much then I understand but if it is something that you could do and are willing to do, I for one would be interested. I am always willing to explore an avenue that might help me out. Step one for me would be giving up my golf habit that pretty much has me paying for two of us each time I go. I teach it as well. The condensed version is sell your rides and buy beaters. Get rid of you credit cards, destroy them physically. Cut your standard of living back to college levels and exist on the cheapest foods possible. Pino beans and rice are yor friends. Realize that if you have debt, every time you go golfing you are effectively financing the golf trip at whatever your interest rate s because you are wasting the money and not putting it on the debt itself. I can imagine very few scenarios that would preclude someone from paying off all of their debt in five years and 90% of time it can be done in 3. Quote Link to comment Share on other sites More sharing options...
polksalet Posted February 25, 2008 Author Share Posted February 25, 2008 From wikipedia:No thank you. Why not? Your lenders have. Quote Link to comment Share on other sites More sharing options...
Jimmy Neutron Posted February 25, 2008 Share Posted February 25, 2008 From Ramsey's website - the 13 lessons: Super SavingIn this lesson, Dave explains the Seven Baby Steps that will guide you throughout FPU. You will also learn the three key reasons why you should save money—and why you must start now! Relating With Money This lesson will teach spouses how to communicate and work together toward success. Also, singles will learn the importance of teamwork and parents will find out how to teach their kids about money. Cash Flow Planning Unlock the secret of developing a monthly spending plan that really works. Dumping Debt It’s time to debunk the myths that most people believe about debt! In this lesson, Dave Ramsey reveals the truth about the credit lies and gives you a plan for walking out of debt with confidence. Credit Sharks in Suits What is a credit score, anyway? Join Dave as he unpacks your credit rating and shows you how to handle collectors when they call. Buyer Beware Dave Ramsey draws on decades of experience to reveal the power and influence that marketing has on your everyday buying decisions. Let the buyer beware! Clause and Effect In this lesson, Dave walks you through the world of insurance, carefully explaining what you need—and what you need to avoid. That's Not Good Enough! Discover the seldom-used secrets of buying only big, big bargains—every time! Before you know it, you’ll be saying “That’s not good enough!” Of Mice and Mutual Funds Dave breaks through the jargon surrounding long-term investing and empowers you to make your own decisions about your investments! From Fruition to Tuition Dave walks you through the maze of retirement options and helps you figure out the right path for you. You will also learn how to plan for college so your kids can graduate debt free! Working in Your Strengths This lesson will show you how to avoid dead-end or mind-numbing jobs and provide tips for job hunting, writing a résumé, and acing an interview. Plus, you’ll learn tips for finding extra jobs if you need cash to attack your debt snowball. Real Estate and Mortgages Dave draws on over 20 years of real estate experience to teach you how to win when buying or selling your home. Plus, he’ll dissect all of the common mortgage options available today, showing you what to choose—and what to avoid. The Great Misunderstanding Warning! This lesson will challenge the way you think about money. Dave will show you how generous giving can completely revolutionize your attitude and improve your finances, business and relationships. Polks summary is extreme, but generally on target. Ramsey may say something like, "If you're going out to eat on credit, stay home and eat beans and rice." Quote Link to comment Share on other sites More sharing options...
polksalet Posted February 25, 2008 Author Share Posted February 25, 2008 From Ramsey's website - the 13 lessons: Polks summary is extreme, but generally on target. Ramsey may say something like, "If you're going out to eat on credit, stay home and eat beans and rice." That's how we are getting it done. Tomorrow is pinto beans and ham scraps. The next day I will add rice and maybe a couple of fish heads. It is extreme indded but in a couple of years< God willing, I will be debt free. Quote Link to comment Share on other sites More sharing options...
Furd Posted February 25, 2008 Share Posted February 25, 2008 Why not? Your lenders have. My lenders have reached me on an emotional and spiritual level? Those sneaky bastards. Quote Link to comment Share on other sites More sharing options...
Jimmy Neutron Posted February 25, 2008 Share Posted February 25, 2008 My lenders have reached me on an emotional and spiritual level? I have not seen Ramsey in person, but he doesn't go all spiritual in his DVDs. He does quote the Bible and he is emotional. Frankly, he's an excellent speaker - ethos, pathos, logos - it's all in there, baby. Quote Link to comment Share on other sites More sharing options...
polksalet Posted February 25, 2008 Author Share Posted February 25, 2008 My lenders have reached me on an emotional and spiritual level? Those sneaky bastards. Why do we get over our heads in debt? I is called materialism. Now you do not have to believe in a supreme being to believe in materialism. It is a human hunger to keep up with the Joneses and live beyond our means. Therefore, you have been reached on an emotional or spiritual level. Quote Link to comment Share on other sites More sharing options...
wiegie Posted February 25, 2008 Share Posted February 25, 2008 I listen to Dave Ramsey--I find him amusing (if I am honest, likely because it makes me feel smart and superior when somebody calls in and says that they have racked up $100K in credit card debt when their annual income is $20K--and it is nice to actually here somebody tell another person that they have been acting stupidly when in fact they have been actiing stupidly). I personally would not pay to go to one of his talks--I probably wouldn't go to one of his talks even if I could go for free. However, I know a number of people that probably would benefit from hearing what he has to say (mostly from hearing him tell them that what they are doing is stupid). I also disagree with his "snowball" plan for paying off debt (whereby you pay off your debts smallest to lowest regardless of the interest rate you are paying on each individual debt--that is just plain dumb and doesn't make any financial sense at all. It is a gimmick, but perhaps it appeals to people who have gotten themselves into big-time debt problems for no good reason are better off having a gimmick to rely on than the optimal plan. Who knows. Ramsey well admits that what he is saying is nothing new; in fact, he often describes his advice as "the same things that your grandmother would tell you, except that we don't have to put our teeth in first" (or something similar to that). I don't think it's bad to have somebody being a cheerleader for frugality and I think part of why Ramsey is useful is because it makes people who suddenly start to cut back and live within a reasonable budget feel that they are not alone. Quote Link to comment Share on other sites More sharing options...
muck Posted February 25, 2008 Share Posted February 25, 2008 I also disagree with his "snowball" plan for paying off debt (whereby you pay off your debts smallest to lowest regardless of the interest rate you are paying on each individual debt--that is just plain dumb and doesn't make any financial sense at all. It is a gimmick, but perhaps it appeals to people who have gotten themselves into big-time debt problems for no good reason are better off having a gimmick to rely on than the optimal plan. Who knows. I believe the basic idea is to first pay off the debts that have the highest "Minimum Payment Percentage" (my term) ... which is the minimum payment divided by the outstanding balance. Why? As I believe DR would tell you, it frees up cash flow faster to deal with lower-minimum payment debt that may have a higher interest rate. Now, in my opinion, this isn't the only metric to consider ... as the interest rate differential between the lowest-minimum-payment debt and the highest-minimum-payment debt may be so extreme that paying off (or at least paying down) the highest interest rate debt first makes sense... But if the interest rates are sorta close, pay off the stuff requiring a disproportionate part of you minimum monthly payments. Generally these will be your smaller debts. We have discussed this idea many times before, and I think I even came up with a formula to apply to all debts to determine which one to pay first, but I am not that good at fiddling with the search feature to dig it out of the past. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted February 25, 2008 Share Posted February 25, 2008 I believe the basic idea is to first pay off the debts that have the highest "Minimum Payment Percentage" (my term) ... which is the minimum payment divided by the outstanding balance. Why? As I believe DR would tell you, it frees up cash flow faster to deal with lower-minimum payment debt that may have a higher interest rate. Now, in my opinion, this isn't the only metric to consider ... as the interest rate differential between the lowest-minimum-payment debt and the highest-minimum-payment debt may be so extreme that paying off (or at least paying down) the highest interest rate debt first makes sense... But if the interest rates are sorta close, pay off the stuff requiring a disproportionate part of you minimum monthly payments. Generally these will be your smaller debts. We have discussed this idea many times before, and I think I even came up with a formula to apply to all debts to determine which one to pay first, but I am not that good at fiddling with the search feature to dig it out of the past. Dave Ramsey is bad at math Quote Link to comment Share on other sites More sharing options...
TimC Posted February 25, 2008 Share Posted February 25, 2008 I like watching him on Fox Business because his callers are soooo stupid. "I racked up 100k debt and can't afford my 24" rims now...what do I do?" He doesn't say anything new or exciting really. Just basic common sense. Most of the callers act like it's an epiphany, so I guess his services are needed. I don't claim to be the smartest person in the world, but I am King of the Dumbasses. Quote Link to comment Share on other sites More sharing options...
wiegie Posted February 25, 2008 Share Posted February 25, 2008 (edited) Dave Ramsey is bad at math Ramsey's argument is basically that the kind of people who get themselves into stupid debt are usually the type of people who like immediate gratification. As such, if they can pay off one or two bills quickly, it will give them the satisfaction that what they are doing is working and they will stick with it (whereas they might get discouraged and give up on paying off their debts if they used the smart method of applying extra cash-flow to their highest-interest rate debts). As I said above, it is dumb and a gimmick. But perhaps it is a gimmick that some people need. All in all, I think he probably helps people a lot more (by helping them to get of debt) than he hurts them (by possibly leading them to pay more in interest than they really need to). Edit to add: I just read the last few lines from the article you linked to and the author gets at what I was trying to say: This isn’t to say that an approach such as Ramsey’s isn’t worthwhile. For example, under Ramsey’s scheme, the first debt gets knocked out very quickly, and some people may need that psychological boost to keep at it. In contrast, it took twenty months to knock out the first debt under the high-rate scenario, although two debts (MasterCard and car loan) ended up getting knocked out that same month. But for people with sufficient self-control, you can do better by paying off debts from highest to lowest interest rate. Then again, maybe people with self control don’t get into debt in the first place... Edited February 25, 2008 by wiegie Quote Link to comment Share on other sites More sharing options...
Furd Posted February 25, 2008 Share Posted February 25, 2008 Why do we get over our heads in debt? I is called materialism. Now you do not have to believe in a supreme being to believe in materialism. It is a human hunger to keep up with the Joneses and live beyond our means. Therefore, you have been reached on an emotional or spiritual level. You call it materialism. i call it being a dumbass. It may be that one needs spritual and emotional counseling to avoid spending money. I'm all for counseling. But I'm not about to look at some debt reducing pitchman for it. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted February 25, 2008 Share Posted February 25, 2008 All in all, I think he probably helps people a lot more (by helping them to get of debt) than he hurts them (by possibly leading them to pay more in interest than they really need to). Edit to add: I just read the last few lines from the article you linked to and the author gets at what I was trying to say: While I personally think it's pointless, the analogy drawn earlier with Weightwatchers is fairly apposite. Sometimes it's better when you know you're not the only one struggling. A misery shared is a misery halved, I guess. Quote Link to comment Share on other sites More sharing options...
wiegie Posted February 25, 2008 Share Posted February 25, 2008 (edited) While I personally think it's pointless, the analogy drawn earlier with Weightwatchers is fairly apposite. Sometimes it's better when you know you're not the only one struggling. A misery shared is a misery halved, I guess. what the hell do you mean "apposite"? It's about the exact same thing. Edited February 25, 2008 by wiegie Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted February 25, 2008 Share Posted February 25, 2008 what the hell do you mean "apposite"? It's about the exact same thing. No it isn't. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted February 25, 2008 Share Posted February 25, 2008 From wikipedia:One notable difference between his and other financial shows was that Ramsey attempts to go beyond the mathematical mechanics and reach his callers through an emotional and spiritual level.[ No thank you. chit, i say we elect him president. Quote Link to comment Share on other sites More sharing options...
muck Posted February 25, 2008 Share Posted February 25, 2008 (edited) Dave Ramsey is bad at math FYI: I sent this link to my BIL who is a big Ramsey fan, and this is his response: "The stress of being in debt is sometimes monumental for family/individual. If you listen to Dave, he doesn't ever say that his way is THE Way but a way. Also, He doesn't claim that it is the most mathematical way to get things done. I know from talking to people who do it Dave's way. I know first hand the psychological affect of paying something off feels so much better that seeing a large sum dwindle. I think the point is to be out debt. But if you are in debt, do what makes you feel less stressed in paying off. That might be worth the extra you pay. We do the hybrid system at our house because that makes me feel a ton better. For example, Dave says no Credit cards. But we are disciplined at our house, so I don't have any issues paying of the card each month. Its a strong statement to call it bad math when that is not what Dave is claiming. I guess for logical thinkers Dave's plan doesn't make sense." Edited February 25, 2008 by muck Quote Link to comment Share on other sites More sharing options...
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