polksalet Posted February 25, 2008 Author Share Posted February 25, 2008 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." I will add that my personal opinion is that most of the people who use Dave's plan would ordinarily use no plan and get farther in debt. When you combine being able to pay down all or a lot of debt to throwing your hands in the air, I think he provides a great public service. Quote Link to comment Share on other sites More sharing options...
Skippy Posted February 25, 2008 Share Posted February 25, 2008 I guess for logical thinkers Dave's plan doesn't make sense." Is your BIL saying that he is not a logical thinker? I would be the first to admit that this stuff would confuse the crap out of me. I am not a money man. I put money in my Roth via a friend of a friend that could for all I know be taking trips to the Bahamas on my money. I am blind in this aspect of life and I am also very trusting. One example of what could easily confuse me is figuring out which debt to pay down first. 1. Credit Card with say 7% interest and a 5 K balance. 2. Car loan with that same 7% interest and about the same 5K balance but, the loan is only 20 months from being paid off and if I understand a car loan correctly, you paid the big interest in the first half of the payments. 3. Mortgage with say a 6.25% interest but at the begging area of the loan. Those three debts would be paid in the order that I listed them based on what I think I know. CC debt is the worst no matter how you slice it in terms of repayment because of the way the interest works. The car loan is what it is but unless you attack it at the start, it is not really worth attacking ahead of anything else. I mean I don't really know that any of this is correct but I think it is what I know. Dave Ramsey could probably help momos like me that just really don't know this stuff all that well. Quote Link to comment Share on other sites More sharing options...
polksalet Posted February 25, 2008 Author Share Posted February 25, 2008 Is your BIL saying that he is not a logical thinker? I would be the first to admit that this stuff would confuse the crap out of me. I am not a money man. I put money in my Roth via a friend of a friend that could for all I know be taking trips to the Bahamas on my money. I am blind in this aspect of life and I am also very trusting. One example of what could easily confuse me is figuring out which debt to pay down first. 1. Credit Card with say 7% interest and a 5 K balance. 2. Car loan with that same 7% interest and about the same 5K balance but, the loan is only 20 months from being paid off and if I understand a car loan correctly, you paid the big interest in the first half of the payments. 3. Mortgage with say a 6.25% interest but at the begging area of the loan. Those three debts would be paid in the order that I listed them based on what I think I know. CC debt is the worst no matter how you slice it in terms of repayment because of the way the interest works. The car loan is what it is but unless you attack it at the start, it is not really worth attacking ahead of anything else. I mean I don't really know that any of this is correct but I think it is what I know. Dave Ramsey could probably help momos like me that just really don't know this stuff all that well. You should put your extra money into the cc because it can go up to 25% at any time. Then work on the car loan for the reason you stated. Then work on kid's college ira's, then on home mortgage. Pay the home off last becasue the interest is deductible. It is a pretty simple system really but incredibly effective. Quote Link to comment Share on other sites More sharing options...
Double Agent Posted February 25, 2008 Share Posted February 25, 2008 There is no question that "mathmatically" it makes more sense to start paying off the debt with the highest interest rate. But Ramsey points out that it's hard to stay motivated when that happens. He compares it to losing weight. What if you had 50 pounds to lose and it would take you 2 years to lose it? If you knew you were going to lose 50 pounds exactly in the 24th month...but no weight loss before that...would you stay on the diet? Even though you know the weight would just drop off, most people would lose focus. It's the same way with some people and debt. Let's say someone has 10 credit cards with balances. They get that gratification of paying off creditors instead of just paying off a big debt. You start with the lowest balance and knock those out first. Within a year, most people should only have a couple credit cards left. It's easier to stay focused. Ramsey agrees that it's not perfect math but the people that got themselves into this situation are probably not math wizards anyway. I actually love this plan and I think it appeals to the masses. I'm lucky that I have very little credit card debt and I don't really have to worry about this. But I do have a law school loan and that's going to be a bear to pay off...even though the interest rate is very low. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted February 25, 2008 Share Posted February 25, 2008 (edited) There is no question that "mathmatically" it makes more sense to start paying off the debt with the highest interest rate. But Ramsey points out that it's hard to stay motivated when that happens. He compares it to losing weight. What if you had 50 pounds to lose and it would take you 2 years to lose it? If you knew you were going to lose 50 pounds exactly in the 24th month...but no weight loss before that...would you stay on the diet? Even though you know the weight would just drop off, most people would lose focus. It's the same way with some people and debt. Let's say someone has 10 credit cards with balances. They get that gratification of paying off creditors instead of just paying off a big debt. You start with the lowest balance and knock those out first. Within a year, most people should only have a couple credit cards left. It's easier to stay focused. that is a dumb comparison, because under the correct approach, you ARE losing weight, and you're losing it faster than the other way. does this guy think people are so stupid they can only conceive of "debt" in number of payments rather than as a total number? Ramsey agrees that it's not perfect math but the people that got themselves into this situation are probably not math wizards anyway. well, that is why people who are considered experts in the field ought to give them good advice. ya know, something that actually DOES add up. Edited February 25, 2008 by Azazello1313 Quote Link to comment Share on other sites More sharing options...
polksalet Posted February 25, 2008 Author Share Posted February 25, 2008 Dave on Tax rebate http://www.daveramsey.com/etc/cms/stimulus...bate_8980.htmlc Quote Link to comment Share on other sites More sharing options...
Double Agent Posted February 25, 2008 Share Posted February 25, 2008 that is a dumb comparison, because under the correct approach, you ARE losing weight, and you're losing it faster than the other way. does this guy think people are so stupid they can only conceive of "debt" in number of payments rather than as a total number?well, that is why people who are considered experts in the field ought to give them good advice. ya know, something that actually DOES add up. You lost me Az. Quote Link to comment Share on other sites More sharing options...
Puddy Posted February 26, 2008 Share Posted February 26, 2008 that is a dumb comparison, because under the correct approach, you ARE losing weight, and you're losing it faster than the other way. does this guy think people are so stupid they can only conceive of "debt" in number of payments rather than as a total number?well, that is why people who are considered experts in the field ought to give them good advice. ya know, something that actually DOES add up. Well, you are smarter than the masses out there (and according to popular legend, smarter than every Huddler as well), so this plan isn't for you. You don't need his bad math answer. Many people in this country can benefit from his methods. I think you underestimate the power of the psychological part of this whole deal. Quote Link to comment Share on other sites More sharing options...
TheShiznit Posted February 27, 2008 Share Posted February 27, 2008 There is nothing magical or new about Dave Ramsey's plan. It's all stuff we should know. But most of us need motivation. This is true with business, finances, health, etc. Most of us also need a plan. I'm in great health and always have been...knock on wood. I've always watched what I consumed (expect for snuff) and exercised and lifted weights regularly. I don't need motivation or a book to guide me through that aspect of my life. It's a simple formula, consume less calories than you burn. But a lot of people do need a book and there's nothing wrong with it. They need the motivation and knowledge. The same holds true for finances and budgets. Some of us need motivation for that stuff. Dave is not all about getting out of debt and not charging items on a credit card. The end result is investing. That's where a lot of people fall short. I'm in that business and I cannot tell you how many 50-60 year olds I see with really nothing set back for retirement. It's sad. That's where I think Dave's plan really helps. To me, it's aimed at the younger couples more than the middle aged. Ah, so are you an ELP provider.....did you sell your soul and peddle the gosphel to make money? Quote Link to comment Share on other sites More sharing options...
Double Agent Posted February 27, 2008 Share Posted February 27, 2008 (edited) Ah, so are you an ELP provider.....did you sell your soul and peddle the gosphel to make money? I am not an ELP. And I have no idea what a gosphel is. Edited February 27, 2008 by Double Agent Quote Link to comment Share on other sites More sharing options...
TheShiznit Posted February 27, 2008 Share Posted February 27, 2008 I am not an ELP. And I have no idea what a gosphel is. My respect for you just went up 100 fold.....I thought you were an ELP!!! What a joke. I had a person who wanted to do business with me, but since I refused to answer their religious questions, I didn't get the business...some ELP guy got the investment business...some college instructor!!!! About a year and a half later...guess who has the business. ME. You have to be a Christian to be an ELP provider.....what in the hell does that matter if someone needs life insurance? Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted February 27, 2008 Share Posted February 27, 2008 To me, ELP = Emerson, Lake and Palmer. Didn't know they were in the finance biz. Quote Link to comment Share on other sites More sharing options...
Yukon Cornelius Posted February 27, 2008 Share Posted February 27, 2008 who the frak are u girls talking about Quote Link to comment Share on other sites More sharing options...
Double Agent Posted February 27, 2008 Share Posted February 27, 2008 I'm not an ELP but I have an ELP (Extra Long Penis). That is all. Quote Link to comment Share on other sites More sharing options...
muck Posted February 27, 2008 Share Posted February 27, 2008 Seriously, what is an ELP? Quote Link to comment Share on other sites More sharing options...
TheShiznit Posted February 28, 2008 Share Posted February 28, 2008 Seriously, what is an ELP? I don't know what exactly it stands for, but it is the network of advisors that Dave Ramsey uses for his "clients." Quote Link to comment Share on other sites More sharing options...
The Holy Roller Posted February 28, 2008 Share Posted February 28, 2008 I'm not an ELP but I have an ELP (Extra Limp Penis). That is all. As long as it's stubby no one will notice. Quote Link to comment Share on other sites More sharing options...
muck Posted February 28, 2008 Share Posted February 28, 2008 I don't know what exactly it stands for, but it is the network of advisors that Dave Ramsey uses for his "clients." Ramsey has clients? Does the SEC know? Quote Link to comment Share on other sites More sharing options...
TheShiznit Posted February 28, 2008 Share Posted February 28, 2008 Ramsey has clients? Does the SEC know? LOL....gawd I hope not. He instructs his little clan of followers to use only advisors he approves of...good christians as he likes to call them. He tells them to buy NOTHING but Term Insurance......EVER. As if the idea of permanent or even whole life is ludicrous in all situations. I will have to give him props for finally advising his clients buy Long Term Care insurance....or at least entertain it. However, his "network" is full of good little christians who CANNOT sell permanent or whole life products. Cannot sell an annuity even if one is appropriate or they will be dropped from the network....all the tenants of being an advisor and offering unbiased advice just went out the window!!! Quote Link to comment Share on other sites More sharing options...
yo mama Posted February 28, 2008 Share Posted February 28, 2008 (edited) LOL....gawd I hope not. He instructs his little clan of followers to use only advisors he approves of...good christians as he likes to call them. He tells them to buy NOTHING but Term Insurance......EVER. As if the idea of permanent or even whole life is ludicrous in all situations. I will have to give him props for finally advising his clients buy Long Term Care insurance....or at least entertain it. However, his "network" is full of good little christians who CANNOT sell permanent or whole life products. Cannot sell an annuity even if one is appropriate or they will be dropped from the network....all the tenants of being an advisor and offering unbiased advice just went out the window!!! If that's the case, I doubt Ramsey is catering to folks who are looking at an estate tax problem upon their death. But for the vast majority of folks, convertible term is the way to go. He's right about that. Edited February 28, 2008 by yo mama Quote Link to comment Share on other sites More sharing options...
Double Agent Posted February 28, 2008 Share Posted February 28, 2008 Shiz, I agree with you on a lot of this. But I do hate whole life insurance and would never sell it to a client. So Ramsey is right on that. He is wrong on VULs though. I think there are a lot of people (especially kids) that could benefit greatly. I also disagree with him on annuities. There are lots of situations where fixed annuities are the best choice. Quote Link to comment Share on other sites More sharing options...
yo mama Posted February 28, 2008 Share Posted February 28, 2008 But I do hate whole life insurance and would never sell it to a client. As I stated above, whole life isn't for everyone. But it has its place in any financial advisor's tool box. Quote Link to comment Share on other sites More sharing options...
polksalet Posted February 28, 2008 Author Share Posted February 28, 2008 I don't know what exactly it stands for, but it is the network of advisors that Dave Ramsey uses for his "clients." who knew you were talking out of your butt and making up facts as you went along? It was not obvious to me, I promise. Quote Link to comment Share on other sites More sharing options...
polksalet Posted February 28, 2008 Author Share Posted February 28, 2008 Ramsey has clients? Does the SEC know? "Endorsed Local Provider" Basically he sends you to school to know how he does things and how he expects the elp to treat his listener/reader/students. He doesn't want the typical pitchman giving them advice, he wants someone who will teach them why the should do what they are being told. I actually talked to an elp this morning about some insurance on my mom-in-law. I have to say he was the most courteous salesman (Ag Edwards affiliate) I have ever dealt with. We talked for 20 minutes after he decided he could not help us. Dave is not a licensed, broker, cpa, or attorney and but he has a lot of elp's who are.. Quote Link to comment Share on other sites More sharing options...
polksalet Posted February 28, 2008 Author Share Posted February 28, 2008 LOL....gawd I hope not. He instructs his little clan of followers to use only advisors he approves of...good christians as he likes to call them. He tells them to buy NOTHING but Term Insurance......EVER. As if the idea of permanent or even whole life is ludicrous in all situations. I will have to give him props for finally advising his clients buy Long Term Care insurance....or at least entertain it. However, his "network" is full of good little christians who CANNOT sell permanent or whole life products. Cannot sell an annuity even if one is appropriate or they will be dropped from the network....all the tenants of being an advisor and offering unbiased advice just went out the window!!! Liar, I have never heard him refer to his elp's as Christians, good or not, Liar. Of course you do not even know what elp stands for liar, liar. Is this your theme song? Quote Link to comment Share on other sites More sharing options...
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