[Differences in strategies: Ramsey vs Bogle]

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vokse
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[Differences in strategies: Ramsey vs Bogle]

Post by vokse » Tue Mar 24, 2020 3:08 pm

Okay, the title is somewhat intentionally posed as click-bait :wink: [Note: edited title to better reflect the questions asked. -- mod oldcomputerguy]

Truly, I am Dave-ish when it comes to some of his advice. Good advice, but every situation is different!

My questions pertains to his investing recommendation being 4 mutual funds: Growth and Income, Growth, Aggressive Growth, and International.

I have heard good things about this investing strategy, but equally good things about the Three-fund portfolio.

What are the main differences/similarities between these strategies and what personal experiences have you had??

I currently have a Vanguard ROTH 401K Target date (which is not recommended by Ramsey) that I contribute up to my company match to with my current employer. Out of my available options, the target date is really the best one. To get to contributing 15% towards retirement, I plan to max out a ROTH IRA with VG yearly to allow for better options to pick from (my husband is going to move his ROTH IRA to VG and do the same) and then will apply whatever is left over to my ROTH 401K to get to that 15% target. Before doing that, I need to learn more about what has been successful! TIA!


*bonus if you are still reading: I have an old retirement acct with an old employer that I will be moving to VG. With Covid-19, I have lost several thousand and was in the "aggressive fund" option that they offered - it was literally a fill in the bubble option. My current plan was to leave it there and see if it comes back a little instead of moving it to my VG Target date yet. Thoughts?

Call_Me_Op
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Re: Ramsey or Bogle?

Post by Call_Me_Op » Tue Mar 24, 2020 3:10 pm

vokse wrote:
Tue Mar 24, 2020 3:08 pm
I have heard good things about this investing strategy, but ...
From whom, if I may ask?
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

retired@50
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Re: Ramsey or Bogle?

Post by retired@50 » Tue Mar 24, 2020 3:12 pm

Ramsey has decent "get out of debt" advice and, from what I've read, lousy investment advice.

I'd go with the three fund portfolio or a target date fund if I were you.

If you want to fine tune, and keep bonds outside of your Roth IRA, then just hold total stock and total international stock in the Roth IRA.

Regards,
Boggle - a game from Parker Brothers. Bogle - investor, founder of Vanguard.

coachd50
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Re: Ramsey or Bogle?

Post by coachd50 » Tue Mar 24, 2020 3:14 pm

vokse wrote:
Tue Mar 24, 2020 3:08 pm


My questions pertains to his investing recommendation being 4 mutual funds: Growth and Income, Growth, Aggressive Growth, and International.

I would wager if you broke down those 4 fund types, you would see a great deal of overlap, which goes against the idea of diversification.

Call_Me_Op
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Re: Ramsey or Bogle?

Post by Call_Me_Op » Tue Mar 24, 2020 3:16 pm

coachd50 wrote:
Tue Mar 24, 2020 3:14 pm
vokse wrote:
Tue Mar 24, 2020 3:08 pm


My questions pertains to his investing recommendation being 4 mutual funds: Growth and Income, Growth, Aggressive Growth, and International.

I would wager if you broke down those 4 fund types, you would see a great deal of overlap, which goes against the idea of diversification.
Right. What is a "good growth mutual fund?" We know that value beats growth over long periods of time - historically.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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Cheez-It Guy
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Re: Ramsey or Bogle?

Post by Cheez-It Guy » Tue Mar 24, 2020 3:17 pm

This should be interesting. . .

deikel
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Re: Ramsey or Bogle?

Post by deikel » Tue Mar 24, 2020 3:17 pm

Estimated Net Worth Dave Ramsey in 2019: 55 million
Estimated Net Worth Jack Bogle in 2019: 80 million

Bogle made his money with investments, the slow and steady way. He made index investing a thing.

Dave Ramsey (after going bankrupt) regained his money ... as an entertainer

You pick....
Everything you read in this post is my personal opinion. If you disagree with this disclaimer, please un-read the text immediately and destroy any copy or remembrance of it.

BW1985
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Re: Ramsey or Bogle?

Post by BW1985 » Tue Mar 24, 2020 3:19 pm

coachd50 wrote:
Tue Mar 24, 2020 3:14 pm
vokse wrote:
Tue Mar 24, 2020 3:08 pm


My questions pertains to his investing recommendation being 4 mutual funds: Growth and Income, Growth, Aggressive Growth, and International.

I would wager if you broke down those 4 fund types, you would see a great deal of overlap, which goes against the idea of diversification.
It's tilting because he recommends 25% in each- large cap, mid cap and small cap.
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

rasta
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Re: Ramsey or Bogle?

Post by rasta » Tue Mar 24, 2020 3:21 pm

neither.

i'll take benjamin graham

jibantik
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Re: Ramsey or Bogle?

Post by jibantik » Tue Mar 24, 2020 3:24 pm

Ramsey would recommend wiping your bum with sandpaper if he could collect a fee or sell a book about it.

Do you know the difference between Growth and Income, Growth, and Aggressive Growth funds? Why would you want all three, why not one or another, or two of the three, or weighted 50%, 25%, 25%, etc. etc.

Invest in the ENTIRE market, at weight, and stay the dang course. No one knows better.

Topic Author
vokse
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Re: Ramsey or Bogle?

Post by vokse » Tue Mar 24, 2020 3:25 pm

Cheez-It Guy wrote:
Tue Mar 24, 2020 3:17 pm
This should be interesting. . .
Hey, it will provide for education and..entertainment? for everyone cooped up in quarantine! :P

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vokse
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Re: Ramsey or Bogle?

Post by vokse » Tue Mar 24, 2020 3:27 pm

Call_Me_Op wrote:
Tue Mar 24, 2020 3:10 pm
vokse wrote:
Tue Mar 24, 2020 3:08 pm
I have heard good things about this investing strategy, but ...
From whom, if I may ask?
Ramsey followers. I am on a few platforms with hundreds of thousands of followers and here is a direct quote from someone who replied to my asking how his recommendation is working for them: "We transferred our IRAs to vanguard about 2 years ago and then have 3 of the types of Dave Recommended funds. We were getting about 5% with a 2040 and now about 11% with our changes."

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windaar
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Re: Ramsey or Bogle?

Post by windaar » Tue Mar 24, 2020 3:28 pm

Seeing the direction this forum is going, will we next be discussing the merits of the Tom Vu Technique©? :happy :happy
Nobody knows nothing.

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Kenkat
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Re: Ramsey or Bogle?

Post by Kenkat » Tue Mar 24, 2020 3:33 pm

Call_Me_Op wrote:
Tue Mar 24, 2020 3:16 pm
coachd50 wrote:
Tue Mar 24, 2020 3:14 pm
vokse wrote:
Tue Mar 24, 2020 3:08 pm


My questions pertains to his investing recommendation being 4 mutual funds: Growth and Income, Growth, Aggressive Growth, and International.

I would wager if you broke down those 4 fund types, you would see a great deal of overlap, which goes against the idea of diversification.
Right. What is a "good growth mutual fund?" We know that value beats growth over long periods of time - historically.
Just pick a good one that returns 14% a year on average. :shock:

Actually, if you are looking to get out of debt and on a budget, Dave Ramsey gives good advice overall. But it’s Saint Jack by a mile when it comes to investing.

coachd50
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Re: Ramsey or Bogle?

Post by coachd50 » Tue Mar 24, 2020 3:33 pm

vokse wrote:
Tue Mar 24, 2020 3:27 pm
Call_Me_Op wrote:
Tue Mar 24, 2020 3:10 pm
vokse wrote:
Tue Mar 24, 2020 3:08 pm
I have heard good things about this investing strategy, but ...
From whom, if I may ask?
Ramsey followers. I am on a few platforms with hundreds of thousands of followers and here is a direct quote from someone who replied to my asking how his recommendation is working for them: "We transferred our IRAs to vanguard about 2 years ago and then have 3 of the types of Dave Recommended funds. We were getting about 5% with a 2040 and now about 11% with our changes."
If that was a true statement, it is quite possible because based on the funds you listed, the person you are quoting probably has 3/4 very similar funds. Not much diversification. That person probably owns lots of shares of Amazon, Apple, Microsoft, Google etc.

Topic Author
vokse
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Re: Ramsey or Bogle?

Post by vokse » Tue Mar 24, 2020 3:35 pm

windaar wrote:
Tue Mar 24, 2020 3:28 pm
Seeing the direction this forum is going, will we next be discussing the merits of the Tom Vu Technique©? :happy :happy
Hah! :D I am honestly not trying to "start" anything! I like to learn by sometimes simply asking as many people as possible the same question and learning new things from what every one says!

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Sandtrap
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Re: Ramsey or Bogle?

Post by Sandtrap » Tue Mar 24, 2020 3:38 pm

Personal Financial Advice
vs
Comprehensive Personal Investment Financial Advice

Founder of Vanguard vs. . . . .

j :happy
Last edited by Sandtrap on Tue Mar 24, 2020 3:38 pm, edited 1 time in total.
Wiki Bogleheads Wiki: Everything You Need to Know

Topic Author
vokse
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Re: Ramsey or Bogle?

Post by vokse » Tue Mar 24, 2020 3:38 pm

coachd50 wrote:
Tue Mar 24, 2020 3:33 pm
vokse wrote:
Tue Mar 24, 2020 3:27 pm
Call_Me_Op wrote:
Tue Mar 24, 2020 3:10 pm
vokse wrote:
Tue Mar 24, 2020 3:08 pm
I have heard good things about this investing strategy, but ...
From whom, if I may ask?
Ramsey followers. I am on a few platforms with hundreds of thousands of followers and here is a direct quote from someone who replied to my asking how his recommendation is working for them: "We transferred our IRAs to vanguard about 2 years ago and then have 3 of the types of Dave Recommended funds. We were getting about 5% with a 2040 and now about 11% with our changes."
If that was a true statement, it is quite possible because based on the funds you listed, the person you are quoting probably has 3/4 very similar funds. Not much diversification. That person probably owns lots of shares of Amazon, Apple, Microsoft, Google etc.
Interesting point! Here is more from that response: "my husband took Dave’s 4 recommended and looked at Vanguards to see how much over the life of the fund and also the last 10 years they were averaging. Then we sat down looked at them and we picked anything over 10%. We took about 2 weeks to think about it."

Mr.Wu
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Re: Ramsey or Bogle?

Post by Mr.Wu » Tue Mar 24, 2020 3:40 pm

I love my credit cards for cashbacks. So I will in theory never be a true Ramseyhead.

Jags4186
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Re: Ramsey or Bogle?

Post by Jags4186 » Tue Mar 24, 2020 3:40 pm

deikel wrote:
Tue Mar 24, 2020 3:17 pm
Estimated Net Worth Dave Ramsey in 2019: 55 million
Estimated Net Worth Jack Bogle in 2019: 80 million

Bogle made his money with investments, the slow and steady way. He made index investing a thing.

Dave Ramsey (after going bankrupt) regained his money ... as an entertainer

You pick....
Come on now. Bogle made his money from working for Vanguard, speaking engagements, and writing books. Sure he may not have been paid what other fund management companies' CEOs were, but you don't get to $80mm net worth by just "investing" without some seriously large amounts of income.

retired@50
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Re: Ramsey or Bogle?

Post by retired@50 » Tue Mar 24, 2020 3:45 pm

vokse wrote:
Tue Mar 24, 2020 3:38 pm

Interesting point! Here is more from that response: "my husband took Dave’s 4 recommended and looked at Vanguards to see how much over the life of the fund and also the last 10 years they were averaging. Then we sat down looked at them and we picked anything over 10%. We took about 2 weeks to think about it."
Are you saying that you used past performance alone as the criteria for choosing which mutual funds to invest in? If so, I'd suggest you read this.

https://www.bogleheads.org/wiki/Boglehe ... philosophy

Pay special attention to "Diversify" in section 4.

Regards,
Boggle - a game from Parker Brothers. Bogle - investor, founder of Vanguard.

Topic Author
vokse
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Re: Ramsey or Bogle?

Post by vokse » Tue Mar 24, 2020 3:47 pm

retired@50 wrote:
Tue Mar 24, 2020 3:45 pm
vokse wrote:
Tue Mar 24, 2020 3:38 pm

Interesting point! Here is more from that response: "my husband took Dave’s 4 recommended and looked at Vanguards to see how much over the life of the fund and also the last 10 years they were averaging. Then we sat down looked at them and we picked anything over 10%. We took about 2 weeks to think about it."
Are you saying that you used past performance alone as the criteria for choosing which mutual funds to invest in? If so, I'd suggest you read this.

https://www.bogleheads.org/wiki/Boglehe ... philosophy

Pay special attention to "Diversify" in section 4.

Regards,
I haven't personally done that - that quote was a continuation of a quote I got from a Ramsey follower that is investing based on his 4 fund recommendation.

I will read the link you provided for my education though!

ETA: I have read Bogleheads Guide to Investing and diversification certainly is important! It's interesting seeing how many people are seeing that Dave's recommendations likely don't diversify enough - that's reason enough for me to spend even more time learning about the 3 fund portfolio.

retired@50
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Re: Ramsey or Bogle?

Post by retired@50 » Tue Mar 24, 2020 3:54 pm

vokse wrote:
Tue Mar 24, 2020 3:47 pm
retired@50 wrote:
Tue Mar 24, 2020 3:45 pm
vokse wrote:
Tue Mar 24, 2020 3:38 pm

Interesting point! Here is more from that response: "my husband took Dave’s 4 recommended and looked at Vanguards to see how much over the life of the fund and also the last 10 years they were averaging. Then we sat down looked at them and we picked anything over 10%. We took about 2 weeks to think about it."
Are you saying that you used past performance alone as the criteria for choosing which mutual funds to invest in? If so, I'd suggest you read this.

https://www.bogleheads.org/wiki/Boglehe ... philosophy

Pay special attention to "Diversify" in section 4.

Regards,
I haven't personally done that - that quote was a continuation of a quote I got from a Ramsey follower that is investing based on his 4 fund recommendation.

I will read the link you provided for my education though!

ETA: I have read Bogleheads Guide to Investing and diversification certainly is important! It's interesting seeing how many people are seeing that Dave's recommendations likely don't diversify enough - that's reason enough for me to spend even more time learning about the 3 fund portfolio.
The general Bogle idea is to hold the entire market for your investing lifetime, Ramsey, or his followers, appear to be chasing hot sectors like "large cap growth" has been for the past 10 years. Eventually, hot sectors cool off, or as Bogle puts it, reversion to the mean.

Regards,
Boggle - a game from Parker Brothers. Bogle - investor, founder of Vanguard.

BW1985
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Re: Ramsey or Bogle?

Post by BW1985 » Tue Mar 24, 2020 3:55 pm

jibantik wrote:
Tue Mar 24, 2020 3:24 pm
Ramsey would recommend wiping your bum with sandpaper if he could collect a fee or sell a book about it.
Ha! So true.
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

coachd50
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Re: Ramsey or Bogle?

Post by coachd50 » Tue Mar 24, 2020 3:57 pm

vokse wrote:
Tue Mar 24, 2020 3:38 pm
coachd50 wrote:
Tue Mar 24, 2020 3:33 pm
vokse wrote:
Tue Mar 24, 2020 3:27 pm
Call_Me_Op wrote:
Tue Mar 24, 2020 3:10 pm
vokse wrote:
Tue Mar 24, 2020 3:08 pm
I have heard good things about this investing strategy, but ...
From whom, if I may ask?
Ramsey followers. I am on a few platforms with hundreds of thousands of followers and here is a direct quote from someone who replied to my asking how his recommendation is working for them: "We transferred our IRAs to vanguard about 2 years ago and then have 3 of the types of Dave Recommended funds. We were getting about 5% with a 2040 and now about 11% with our changes."
If that was a true statement, it is quite possible because based on the funds you listed, the person you are quoting probably has 3/4 very similar funds. Not much diversification. That person probably owns lots of shares of Amazon, Apple, Microsoft, Google etc.
Interesting point! Here is more from that response: "my husband took Dave’s 4 recommended and looked at Vanguards to see how much over the life of the fund and also the last 10 years they were averaging. Then we sat down looked at them and we picked anything over 10%. We took about 2 weeks to think about it."
The point I am making is that Those four categories you listed are going to yield very similar funds. The Vanguard "growth and INcome" fund has about 25% of its holdings in the top 10 held stocks. the US growth fund has about 40% of its total holdings concentrated in the top 10. In both of those funds 7 of the top 10 holdings are the same company.

So while investors may think they are spreading their money around, they really aren't.

Jags4186
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Re: Ramsey or Bogle?

Post by Jags4186 » Tue Mar 24, 2020 3:58 pm

vokse wrote:
Tue Mar 24, 2020 3:08 pm
Okay, the title is somewhat intentionally posed as click-bait :wink:
Truly, I am Dave-ish when it comes to some of his advice. Good advice, but every situation is different!

My questions pertains to his investing recommendation being 4 mutual funds: Growth and Income, Growth, Aggressive Growth, and International.

I have heard good things about this investing strategy, but equally good things about the Three-fund portfolio.

What are the main differences/similarities between these strategies and what personal experiences have you had??

I currently have a Vanguard ROTH 401K Target date (which is not recommended by Ramsey) that I contribute up to my company match to with my current employer. Out of my available options, the target date is really the best one. To get to contributing 15% towards retirement, I plan to max out a ROTH IRA with VG yearly to allow for better options to pick from (my husband is going to move his ROTH IRA to VG and do the same) and then will apply whatever is left over to my ROTH 401K to get to that 15% target. Before doing that, I need to learn more about what has been successful! TIA!


*bonus if you are still reading: I have an old retirement acct with an old employer that I will be moving to VG. With Covid-19, I have lost several thousand and was in the "aggressive fund" option that they offered - it was literally a fill in the bubble option. My current plan was to leave it there and see if it comes back a little instead of moving it to my VG Target date yet. Thoughts?
OP,

Dave Ramsey recommends 4 mutual fund classes you've mentioned. Unfortunately, those 4 classes, as defined by Dave Ramsey himself, do not lead you to a good portfolio.

Here is what Dave Ramsey specifically has said about his recommended asset classes:

Growth and Income = Large Cap or "Blue Chip"
Growth = Mid Cap or S&P 500 (SP500 is the same as large cap)
Aggressive Growth = Small Cap or Emerging Markets (completely different asset classes, domestic vs international, small cap vs large cap)
International = foreign stocks

Based on what you interpret what he says here is an example of the divergence of these two portfolios:

Image

One thing you might notice is missing is bonds. DR does not believe in holding bonds. He recommends holding rental real estate -- at best a hands-off part-time job, and worst a full-time headache.

Another thing to notice is that his portfolio, depending on your implementation of it, is tilted either small or international. This thought to lead to better returns in the long run with increased risk. "Increased risk" is code for bigger losses in bad markets with the chance for higher returns in the future.

Based on what I know about DR and his investing recommendations, I would not invest according to his teachings.

Normchad
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Re: Ramsey or Bogle?

Post by Normchad » Tue Mar 24, 2020 4:04 pm

This is not exactly what you asked, but it clearly shows the promise of the bogelhead approach of owning the entire market.

It is Warren Buffet betting $1,000,000 that an S&P 500 index fund could beat a bunch of very skilled, very expensive, very well respected hedge fund managers. I think the takeaway for me, is that basically nobody can beat the market over a long period of time. That includes Dave Ramsey as well as me.

https://money.cnn.com/2018/02/24/invest ... index.html
Last edited by Normchad on Tue Mar 24, 2020 4:12 pm, edited 1 time in total.

deltaneutral83
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Re: Ramsey or Bogle?

Post by deltaneutral83 » Tue Mar 24, 2020 4:09 pm

Bogle with his 3F portfolio (or thereabouts) or Ramsey with his loaded American Funds would DOMINATE the average of the masses who sell off their equities after a 20%+ plunge and engages in market timing. The nit picking of strategy means diddly squat if you run for the exits and don't "stay the course" or "ride the roller coaster." Case in point is, uh, now.

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Brianmcg321
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Re: Ramsey or Bogle?

Post by Brianmcg321 » Tue Mar 24, 2020 4:16 pm

I'm as big a fan of Dave Ramsey as there is around here, and I would never tell anyone to follow his investment advice.

I send folks to this forum and give them Jacks books and also recommend JL Collins.

Keep it simple.
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.

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Re: Ramsey or Bogle?

Post by friar1610 » Tue Mar 24, 2020 4:19 pm

jibantik wrote:
Tue Mar 24, 2020 3:24 pm
Ramsey would recommend wiping your bum with sandpaper if he could collect a fee or sell a book about it
i suspect sandpaper is more readily available than toilet paper right now.
Friar1610

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WoodSpinner
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Re: Ramsey or Bogle?

Post by WoodSpinner » Tue Mar 24, 2020 4:26 pm

OP,

There are a lot of portfolios out there, many may be better at some point than the ones I hold, BUT...

What is most important is:
- High Savings Rate
- Low Fees
- Appropriate Risk
- Commitment to the long term

There is a great deal of experience and insight available on this forum, best way to tap into it is to post some details in this format viewtopic.php?f=1&t=6212

Also including a link to a too
So you can do some analytical analysis on your own:
https://www.portfoliovisualizer.com/

Just my $.02

WoodSpinner

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Nate79
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Re: Ramsey or Bogle?

Post by Nate79 » Tue Mar 24, 2020 4:37 pm

There are tons of threads on Dave Ramsey and they all lead to bringing out the anti Dave bashers. Just do a search. This topic has been covered many times in detail.

But we haven't had a Dave Ramsey bash thread in what? 1 week?

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amp
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Re: Ramsey or Bogle?

Post by amp » Tue Mar 24, 2020 4:40 pm

vokse wrote:
Tue Mar 24, 2020 3:27 pm
Call_Me_Op wrote:
Tue Mar 24, 2020 3:10 pm
vokse wrote:
Tue Mar 24, 2020 3:08 pm
I have heard good things about this investing strategy, but ...
From whom, if I may ask?
Ramsey followers. I am on a few platforms with hundreds of thousands of followers and here is a direct quote from someone who replied to my asking how his recommendation is working for them: "We transferred our IRAs to vanguard about 2 years ago and then have 3 of the types of Dave Recommended funds. We were getting about 5% with a 2040 and now about 11% with our changes."
*sigh*

I don't really want to touch this thread with a 10-foot pole. But let me make a few points:
  • Assuming that "2040" refers to a target date fund, then it will have some bonds in it, which will generally mean it trails an all-stock portfolio in exchange for some measure of safety. Did you ask your online friend about her portfolio before or after the current crisis? I'd be very surprised if she was still up 11% over the last two years.
  • Aside from the danger of using past performance to judge future results, it's also not wise to compare portfolios over differing time periods as your friend seems to have done. 2016, 2017, and 2019 were good years for U.S. equities and pretty much any investment would have done well. 2015, 2018, and 2020 (so far) are bad years and most everything will do poorly.
  • Over a two year period ending in 2019, the U.S. market went up about about 24% (11.4% annualized), so that 11% return is nothing special. Of course, it really depends on the exact time period your friend is referring to.
Last edited by amp on Tue Mar 24, 2020 4:45 pm, edited 3 times in total.

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amp
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Re: Ramsey or Bogle?

Post by amp » Tue Mar 24, 2020 4:41 pm

dupe post
Last edited by amp on Tue Mar 24, 2020 4:42 pm, edited 1 time in total.

bogledogle
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Re: Ramsey or Bogle?

Post by bogledogle » Tue Mar 24, 2020 4:41 pm

friar1610 wrote:
Tue Mar 24, 2020 4:19 pm
jibantik wrote:
Tue Mar 24, 2020 3:24 pm
Ramsey would recommend wiping your bum with sandpaper if he could collect a fee or sell a book about it
i suspect sandpaper is more readily available than toilet paper right now.
I am sure Ramsey is selling it to his crowd too, one roll free with my "how to become a gazillionaire" book

Vanguard Fan 1367
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Re: Ramsey or Bogle?

Post by Vanguard Fan 1367 » Tue Mar 24, 2020 4:45 pm

Jags4186 wrote:
Tue Mar 24, 2020 3:40 pm
deikel wrote:
Tue Mar 24, 2020 3:17 pm
Estimated Net Worth Dave Ramsey in 2019: 55 million
Estimated Net Worth Jack Bogle in 2019: 80 million

Bogle made his money with investments, the slow and steady way. He made index investing a thing.

Dave Ramsey (after going bankrupt) regained his money ... as an entertainer

You pick....
Come on now. Bogle made his money from working for Vanguard, speaking engagements, and writing books. Sure he may not have been paid what other fund management companies' CEOs were, but you don't get to $80mm net worth by just "investing" without some seriously large amounts of income.
I fiddled with various ways to invest my money. Had I got onboard with Jack with his S&P 500 fund back when he started it sure would have made a huge difference for me!! I invested a small amount in that fund in the 1990s but jumped in with both feet with Bogle style investing in 2014.

I would go with Bogle for investment advice. Dave Ramsey is extremely helpful in learning to live below your means. I also liked the late Larry Burkett for helping me get out of debt. Larry had similar advice to Dave's.

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Re: Ramsey or Bogle?

Post by willthrill81 » Tue Mar 24, 2020 4:45 pm

Nate79 wrote:
Tue Mar 24, 2020 4:37 pm
But we haven't had a Dave Ramsey bash thread in what? 1 week?
Nah, it's been at least two weeks. We're way overdue.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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akblizzard
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Re: Ramsey or Bogle?

Post by akblizzard » Tue Mar 24, 2020 4:59 pm

vokse wrote:
Tue Mar 24, 2020 3:08 pm
Okay, the title is somewhat intentionally posed as click-bait :wink:
Truly, I am Dave-ish when it comes to some of his advice. Good advice, but every situation is different!

My questions pertains to his investing recommendation being 4 mutual funds: Growth and Income, Growth, Aggressive Growth, and International.

I have heard good things about this investing strategy, but equally good things about the Three-fund portfolio.

What are the main differences/similarities between these strategies and what personal experiences have you had??

I currently have a Vanguard ROTH 401K Target date (which is not recommended by Ramsey) that I contribute up to my company match to with my current employer. Out of my available options, the target date is really the best one. To get to contributing 15% towards retirement, I plan to max out a ROTH IRA with VG yearly to allow for better options to pick from (my husband is going to move his ROTH IRA to VG and do the same) and then will apply whatever is left over to my ROTH 401K to get to that 15% target. Before doing that, I need to learn more about what has been successful! TIA!


*bonus if you are still reading: I have an old retirement acct with an old employer that I will be moving to VG. With Covid-19, I have lost several thousand and was in the "aggressive fund" option that they offered - it was literally a fill in the bubble option. My current plan was to leave it there and see if it comes back a little instead of moving it to my VG Target date yet. Thoughts?
To get valuable answers, post your questions in the format outlined on the forum (there’s a link here somewhere, I’m kinda rushed so didn’t add it). Valuable answers may depend on your age, tax bracket, whatever.
Don’t make it more difficult than it needs to be. Use the same TD fund for your 401k and Roths
Click suggested reading link and get ahold of some reading so you can learn the “why” behind what you need to do long term.
Best of luck, stay well

The Broz
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Re: Ramsey or Bogle?

Post by The Broz » Tue Mar 24, 2020 4:59 pm

Brianmcg321 wrote:
Tue Mar 24, 2020 4:16 pm
I'm as big a fan of Dave Ramsey as there is around here, and I would never tell anyone to follow his investment advice.

I send folks to this forum and give them Jacks books and also recommend JL Collins.

Keep it simple.
+1

Dave is great for people who cannot control their spending habits, and for getting people into a position to invest. I wish I had read his stuff in my younger years. I never had a real problem with debt, but I didn't really know what I should be shooting for in terms of saving for retirement and then what to do with leftover money. Plus - I think he has good rules for understanding how much house and car one can afford. Dave's teachings actually helped us more recently make some big life decisions that I think are going to result in a much better overall future for me and the family.

On the investment side, I will just add that he not only is 100% stocks (aside from his real estate holdings) but he also advocates for actively managed funds AND investment advisers - both of which add to your costs and take away from your investment returns. The latter is not the end of the world but I think one can read the Boglehead book on the 3 fund portfolio and Jack Bogle's Little Book and have just about all the information you really need (until retirement, where you can read the Boglehead book on that topic). The former is clearly shown in the books I mention to significantly cut into your returns, though. Dave brushes it off with comments along the lines of "I don't care about some little fee". But read what the Bogleheads say about fees and do the math yourself. Dave also makes it sound like outperforming the market is no big deal, because you just need to talk to one of his smartvestor pros. Does that really pass the sniff test though? If it were really that simple, why doesn't everyone do that?

I would encourage anyone to read The Total Money Makeover (even if you do not have a problem with debt) to just understand more about money. But when it comes to investing, stay far away.

MathWizard
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Re: Ramsey or Bogle?

Post by MathWizard » Tue Mar 24, 2020 5:01 pm

I used to be a Suze Orman fan. She did provide reasonably good personal finance advice,
but I was not a fan of her investment advice. She like Dave Ramsey, assume too high a return on
investments. In particular, not using inflations adjusted (real) returns.

Dave Ramsey's big contribution is the debt snowball. This is not mathematically optimal, but does
work due to human behavior. Given that the people with lots of credit card debt do need something that
deals with human behavior, I applaud Dave for that. I don't know if he was the originator of that concept,
but her sure promulgates it. His semi-religious presentations also turn me off. His investment advice is
not even as good as Suze's.

I would read "Bogle on Mutual Funds". I think that it given very good exposition of why low cost index funds are
the best way to passively invest.

If you want to invest actively, you would need to learn security analysis, have it be your full time job, and
then you get to compete against those who became billionaires by investing. I'd rather play basketball against
Michael Jordan.

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9-5 Suited
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Re: Ramsey or Bogle?

Post by 9-5 Suited » Tue Mar 24, 2020 5:02 pm

I agree with everyone on Dave Ramsey threads ... that's the fun of them :)

I will say that the *average* person could do a lot worse than being debt free, emergency fund in place, avoiding whole life insurance and other scammy products, investing 15% of their income into American Funds or similar stock mutual funds managed by a fee-collecting advisor, paying off their house aggressively, and giving generously to charity.

None of that is an intellectual defense of the areas where Dave is clearly wrong, but it's just (to me) a fairly obvious statement of his value to society. Of course on the OP's direct question, there is zero reason I can think of to prefer Dave's portfolio to a three fund portfolio appropriately aligned to risk tolerance with the exception that Dave will give you a small size tilt :)

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Brianmcg321
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Re: Ramsey or Bogle?

Post by Brianmcg321 » Tue Mar 24, 2020 5:04 pm

willthrill81 wrote:
Tue Mar 24, 2020 4:45 pm
Nate79 wrote:
Tue Mar 24, 2020 4:37 pm
But we haven't had a Dave Ramsey bash thread in what? 1 week?
Nah, it's been at least two weeks. We're way overdue.
Its a sign things are getting back to normal.

Now if someone would just start an international is dumb thread.
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.

tibbitts
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Re: Ramsey or Bogle?

Post by tibbitts » Tue Mar 24, 2020 5:18 pm

Brianmcg321 wrote:
Tue Mar 24, 2020 5:04 pm
willthrill81 wrote:
Tue Mar 24, 2020 4:45 pm
Nate79 wrote:
Tue Mar 24, 2020 4:37 pm
But we haven't had a Dave Ramsey bash thread in what? 1 week?
Nah, it's been at least two weeks. We're way overdue.
Its a sign things are getting back to normal.

Now if someone would just start an international is dumb thread.
We're starting to get a glimmer of "Why not 100% stock?" threads so possibly the situation is indeed improving.

SteveJones
Posts: 39
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Re: Ramsey or Bogle?

Post by SteveJones » Tue Mar 24, 2020 6:32 pm

I do think Dave's principles in general are getting proven here. For those that say keep the mortgage if the interest rate is low, it's times like this where a paid off mortgage, big emergency fund, and well diversified portfolio really comes in handy. People with that breakdown are experiencing a minor inconvenience while the majority of the country is in a crisis.

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whodidntante
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Location: outside the echo chamber

Re: Ramsey or Bogle?

Post by whodidntante » Tue Mar 24, 2020 6:38 pm

jibantik wrote:
Tue Mar 24, 2020 3:24 pm
Ramsey would recommend wiping your bum with sandpaper if he could collect a fee or sell a book about it.
I haven't seen a roll of TP on the shelf since the beer virus panic. Let's hope it doesn't come down to the Ramsey recommendation.

Dottie57
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Location: Earth Northern Hemisphere

Re: Ramsey or Bogle?

Post by Dottie57 » Tue Mar 24, 2020 6:54 pm

whodidntante wrote:
Tue Mar 24, 2020 6:38 pm
jibantik wrote:
Tue Mar 24, 2020 3:24 pm
Ramsey would recommend wiping your bum with sandpaper if he could collect a fee or sell a book about it.
I haven't seen a roll of TP on the shelf since the beer virus panic. Let's hope it doesn't come down to the Ramsey recommendation.
Nah don’t worry. YouTube has videos o making a DIY bidet. You don’t need tp.

https://m.youtube.com/watch?v=ZWQ3UG6hGzo

cbs2002
Posts: 11
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Re: Ramsey or Bogle?

Post by cbs2002 » Tue Mar 24, 2020 7:10 pm

9-5 Suited wrote:
Tue Mar 24, 2020 5:02 pm
I will say that the *average* person could do a lot worse than being debt free, emergency fund in place, avoiding whole life insurance and other scammy products, investing 15% of their income into American Funds or similar stock mutual funds managed by a fee-collecting advisor, paying off their house aggressively, and giving generously to charity.
This seems right on. It's likely to lead to fiscal stability if you actually do all these things. There are tens of millions of people in the US for whom even the first two points feel impossible, and if Ramsey helps those folks get to a better place then that's great.

He obviously does not give optimal investing advice. Having no debt and secure shelter is massively important to staying healthy and safe - more important than having an optimal investing strategy - so good on that.

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vokse
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Re: Ramsey or Bogle?

Post by vokse » Tue Mar 24, 2020 7:17 pm

You guys have been super helpful!

In both the great laughs and the time others took to give some sound advice.

I am an avid reader and genuinely find this stuff interesting, albeit, overwhelming.

I aim to continue to learn and look more into what info has been provided! Thanks to all and I sure did bring popcorn for this thread :D :sharebeer

MotoTrojan
Posts: 9264
Joined: Wed Feb 01, 2017 8:39 pm

Re: Ramsey or Bogle?

Post by MotoTrojan » Tue Mar 24, 2020 7:26 pm

His strategy makes absolutely no sense to me. Will it work fine? Yes. But there’s no logic in it.

dru808
Posts: 511
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Re: Ramsey or Bogle?

Post by dru808 » Tue Mar 24, 2020 8:00 pm

Invest in either fashion, if you plow a lot of money in consistently, you’ll have a fruitful retirement.
75/25 - schk, schd, vigi / govt

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