Dave Ramsey Lashes Out at His Financial Critics

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knpstr
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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by knpstr » Wed Feb 18, 2015 4:02 pm

His 12% number is a sleazy tactic anyway. He "admits" it here near the beginning:

https://www.youtube.com/watch?v=mHkXjEOQ7aU

He says 12% is the "average return" and that it is NOT the compounded return.
For example:
Start with $100.
First year, up 100% now have $200
Second year, down 50% now have $100

Your average annual return is 25% .... 100%+(-50%) divide by 2 years = 25% average annual return. <---- Dave uses this number
Your compounded return is 0%

His mutual funds that "average 12%" are surely under-performing the S&P on a compounded basis.
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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by Abe » Wed Feb 18, 2015 4:24 pm

He's just doing what a lot of commissioned brokers do which is selling something and getting paid a commission. There is some truth to what he says. I've heard him say there is nothing wrong with paying a commission. In some cases that could be a true statement if you get what you pay for. But, for instance, if you are paying a front end load when you can get an equivalent investment with no load, most knowledgeable investors know this is a bad deal. A lot of his followers are unsophisticated and buy everything he says.
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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by 1210sda » Wed Feb 18, 2015 6:41 pm

Abe wrote: There is some truth to what he says. I've heard him say there is nothing wrong with paying a commission. In some cases that could be a true statement if you get what you pay for. But, for instance, if you are paying a front end load when you can get an equivalent investment with no load, most knowledgeable investors know this is a bad deal. A lot of his followers are unsophisticated and buy everything he says.
Not sure I follow your logic. Maybe I'm missing something.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by Jebediah » Wed Feb 18, 2015 8:14 pm

Here's a good one where he explains how the bond market is not substantially less volatile than the stock market. Holy cow, this guy is setting up his flock for complete investing disaster.

https://www.youtube.com/watch?v=iRtFDvGORQk

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by thegoodlife » Wed Feb 18, 2015 8:57 pm

For this post, please put your preconceived notions about Dave aside. Forget his ELP’s, sophomoric responses to his detractors, religious slant and the infamous 12%. Just look at the fundamentals of what he is saying. Pretend it is not Dave.

It is my understanding (and this is the part that needs correcting if I am wrong) that a buy and hold of (for example) the S&P 500 has outperformed other investing strategies over the long run. The only reason it is not recommended is due to risk tolerance – few, if any of us, has the intestinal fortitude to stick to a 100% stock allocation without panic selling. And that brings us to Dave’s investment strategy:

1.) He believes in 100% stock, no bonds or fixed income at all (right or wrong, he is not alone in that belief).
2.) He is the quintessential buy and holder; never sell no matter how bad things look.
3.) Diversify your account.

If the above is true, let’s look at his recommendation- A diversified (albeit 100% equities) portfolio consisting of 75% domestic and 25% international. Regardless of his choice of descriptive names for the funds, he is suggesting three different funds to capture the US market and an international fund to get a little worldwide exposure – pretty much what is suggested here for someone’s equity portion of their portfolio.

So, if diversification is good (all things being equal, most here would pick a total US fund over just the S&P 500 since, in theory, the more diversified the better), then his diversified portfolio should outperform “the market” (if the market is only the S&P 500). So why is it so crazy to believe that his “portfolio” beats the market? If I understand the basics, shouldn’t it? Other than not having any bond allocation, what he is suggesting is pretty much a Boglehead approach to a high risk, potentially high reward, diversified portfolio.

I am not saying this is good advice to the masses since most of us can’t stomach to watch our nest egg lose 50% of its value over the course of a year during a crash without selling at a loss, but isn’t what he is saying factually true?

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by 1210sda » Wed Feb 18, 2015 9:18 pm

thegoodlife wrote: – few, if any of us, has the intestinal fortitude to stick to a 100% stock allocation without panic selling.
If many of Dave's followers are "unsophisticated" as another poster said earlier, they would be the first to abandon the strategy.

I guess in a vacuum you could say his views about equity diversification and investing for the long haul are correct. However, if one of my kids came home and wanted to implement this policy, I would be emphatically against it.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by knpstr » Wed Feb 18, 2015 9:27 pm

Jebediah wrote:Here's a good one where he explains how the bond market is not substantially less volatile than the stock market. Holy cow, this guy is setting up his flock for complete investing disaster.

https://www.youtube.com/watch?v=iRtFDvGORQk
It's actually hard for me to find such a graph. Here is one showing the S&P on the top and a 30 year treasury on the bottom, I guess they look similar
http://stockcharts.com/freecharts/histo ... b1978.html

However, there is a big difference between holding $10,000 in a 30 year bond and $10,000 in BND, in terms of volatility. Dave was addressing those that buy actual 30 year bonds.

For example most people are expecting the Fed to begin raising interest rates soon, the 30 year bonds being offered now will tank when (if) that happens. The BND will take a hit too, but a less of a hit as it's duration is lower and maturity is lower and will soon be reinvested in the higher yields.

Fun Fact: The global bond market is almost double the size of the global stock market.
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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by SC Hoosier » Wed Feb 18, 2015 9:51 pm

Haters gotta hate. Ridiculous.

We are on a forum celebrating a man that saved us 1-2% in fees every year. That is fine and Jack is great. How much do you think Dave is saving people when he motivates them to wake up from their financial stupor and get out of debt? Car payments that they cannot afford, credit cards with 30% interest. He's helping people change their family's bad financial habits, passed down through generations. The ramifications are huge for future generations.

I have made it through the baby steps and found the Bogleheads. I have the best of both worlds.

You people that attack Dave's character and motives are over the top. His character is of the highest degree. The money he makes off of ELP's is a tiny fraction of his world. The whole ELP program is so that he can control how his listeners are advised and treated. He has a lot of staff making sure that it happens as he wishes. I can't believe he makes anything on it. I listen to his shows on his website for FREE and watch it for FREE. No ads. He could definitely charge more than he does for that service, along with FPU, and his books.

You all are taking shots at a wonderful man that doesn't need to work anymore. He's won the game and can retire. He's still doing it because he loves helping people and you are taking shots at him! Shut up!

Dave Ramsey has done as much for people's finances as Jack Bogle has.

Deal with it.
Last edited by SC Hoosier on Thu Feb 19, 2015 10:18 am, edited 1 time in total.
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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by IPer » Wed Feb 18, 2015 9:52 pm

I had hoped we at Bogleheads stop discussing Dave Ramsey, but it comes up way too often!

I believe what we discuss about Ramsey has no place on this board, we are the nerds and highly
refined and in order for us to keep refined we need to let the Ramsey's of this world be. Enough
of them will become Bogleheads over time. Some argue that he is hurting them by parts of his
message, that could be, however, he is dealing with many folk that would never have saved in
the first place, we forget that. We actually, most of us, cannot relate to that!

It might actually be a good business model for a Financial Adviser to go after Ramsey people and
convert them to portfolios similar to Portfolio Solutions, however, most will be sub $500K accounts.

I love Dave Ramsey for his simplistic message but I fear he might enter a troubled time at some
point due to the controversy, he has a history of not stopping when the getting is good. Whether
or not he has a vested interest in referring to Financial Advisers with a front-end load or whether he
should taper his 12% message toward the truth or whether we should just ignore it because savings
rate REALLY matters and he is achieving that. I just hope his past doesn't catch up to him as his
subscribers depend on him for guidance.
Last edited by IPer on Thu Feb 19, 2015 4:25 am, edited 2 times in total.
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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by IPer » Wed Feb 18, 2015 9:58 pm

ginmqi wrote:
I think Ramsey touches quite the nerve here because he has name-called people like us and also gives dubious investment advice. His name/fame/religion is definitely his marketing tool and he is a very smart businessman capitalizing on a very large market of the US population.
Oh please, I believe the most intelligent on this board can smile and appreciate the names Ramsey has called us! 8-)
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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by IPer » Wed Feb 18, 2015 9:59 pm

SC Hoosier wrote:Haters gotta hate. Rediculous.

We are on a forum celebrating a man that saved us 1-2% in fees every year. That is fine and Jack is great. How much do you think Dave is saving people when he motivates them to wake up from their financial stupor and get out of debt? Car payments that they cannot afford, credit cards with 30% interest. He's helping people change their family's bad financial habits, passed down through generations. The ramifications are huge for future generations.

I have made it through the baby steps and found the Bogleheads. I have the best of both worlds.

You people that attack Dave's character and motives are over the top. His character is of the highest degree. The money he makes off of ELP's is a tiny fraction of his world. The whole ELP program is so that he can control how his listeners are advised and treated. He has a lot of staff making sure that it happens as he wishes. I can't believe he makes anything on it. I listen to his shows on his website for FREE and watch it for FREE. No ads. He could definitely charge more than he does for that service, along with FPU, and his books.

You all are taking shots at a wonderful man that doesn't need to work anymore. He's won the game and can retire. He's still doing it because he loves helping people and you are taking shots at him! Shut up!

Dave Ramsey has done as much for people's finances as Jack Bogle has.

Deal with it.
+1 use your words man!
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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by Leesbro63 » Wed Feb 18, 2015 10:14 pm

SC Hoosier wrote:Haters gotta hate. Rediculous.

We are on a forum celebrating a man that saved us 1-2% in fees every year. That is fine and Jack is great. How much do you think Dave is saving people when he motivates them to wake up from their financial stupor and get out of debt? Car payments that they cannot afford, credit cards with 30% interest. He's helping people change their family's bad financial habits, passed down through generations. The ramifications are huge for future generations.

I have made it through the baby steps and found the Bogleheads. I have the best of both worlds.

You people that attack Dave's character and motives are over the top. His character is of the highest degree. The money he makes off of ELP's is a tiny fraction of his world. The whole ELP program is so that he can control how his listeners are advised and treated. He has a lot of staff making sure that it happens as he wishes. I can't believe he makes anything on it. I listen to his shows on his website for FREE and watch it for FREE. No ads. He could definitely charge more than he does for that service, along with FPU, and his books.

You all are taking shots at a wonderful man that doesn't need to work anymore. He's won the game and can retire. He's still doing it because he loves helping people and you are taking shots at him! Shut up!

Dave Ramsey has done as much for people's finances as Jack Bogle has.

Deal with it.

Yeah but Jack Bogle is a seeker of truth. And willing to be peer reviewed.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by Jebediah » Wed Feb 18, 2015 11:22 pm

knpstr wrote:
Jebediah wrote:Here's a good one where he explains how the bond market is not substantially less volatile than the stock market. Holy cow, this guy is setting up his flock for complete investing disaster.

https://www.youtube.com/watch?v=iRtFDvGORQk
It's actually hard for me to find such a graph. Here is one showing the S&P on the top and a 30 year treasury on the bottom, I guess they look similar
http://stockcharts.com/freecharts/histo ... b1978.html

However, there is a big difference between holding $10,000 in a 30 year bond and $10,000 in BND, in terms of volatility. Dave was addressing those that buy actual 30 year bonds.

For example most people are expecting the Fed to begin raising interest rates soon, the 30 year bonds being offered now will tank when (if) that happens. The BND will take a hit too, but a less of a hit as it's duration is lower and maturity is lower and will soon be reinvested in the higher yields.

Fun Fact: The global bond market is almost double the size of the global stock market.
Maybe I didn't listen all the way through, but I didn't hear anything about 30 year bonds (a small subset of the bond market). All I heard was "bonds", which, by any reasonable account, means TBM. TBM has 6% SD, TSM has 18% SD. So he's dishing out egregiously false information which is going to harm many of his listeners, perhaps in a big way. When is this huckster going to cut the shady crap, be a straight shooter and tell these poor folks the truth that they need to know to stay out of harm's way? I just don't get it unless there is some side motive.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by ginmqi » Wed Feb 18, 2015 11:27 pm

Looks like there are two main camps when it comes to Ramsey on these neck of the woods:

1) The Haters - people who probably never got into debt and is not a target audience for Ramsey. Views Ramsey's get out of debt advice extremely basic and "duh" and goes after his dubious investment advice and emotional/religious manuvering in the get out of debt market share

2) The Apologists - I often find posters who are defending Ramsey have personally benefited from Ramsey's advice (ie get out of debt, at least read two posts who have personally claimed Ramsey helped their personal financial situation) and sees that Ramsey has done enormous good in getting people out of the absolute wasteland of over-consumption and debt-burden

I hope we can all be somewhere in between these two camps. Ramsey is neither all good or all bad. Sure he is profiting off of people in debt but he is also helping them get out of debt...and in return he of course gets their business and the freed up cash (note his full length videos/books/seminars are certainly not FREE) and he gets to make a lot of money securing his own financial future...just as any other American businessman.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by TradingPlaces » Wed Feb 18, 2015 11:31 pm

Who is David Ramsey and why are we talking about him?

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by Itster » Thu Feb 19, 2015 12:09 am

The bottom-line is that Mr. Ramsey is helpful to many with regard to his debt-elimination program, but he has a serious disconnect when it comes to investing. Sadly, this disconnect causes defensiveness on his part, which rightly causes suspicion on the part of others. It doesn't make for the best presentation on behalf of the principles he espouses. But then, I don't expect anyone to be perfect. It does seem it should be a little embarrassing to speak so confidently against reasonable dissent -- he doesn't leave room for personal correction.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by telemark » Thu Feb 19, 2015 7:34 am

crboone wrote:It does seem it should be a little embarrassing to speak so confidently against reasonable dissent -- he doesn't leave room for personal correction.
I'm told he's a good salesman, so perhaps he understands the marketing value of a good controversy.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by ActionJackson » Thu Feb 19, 2015 9:09 am

SC Hoosier wrote:Haters gotta hate. Rediculous.
...
Dave Ramsey has done as much for people's finances as Jack Bogle has.
No that statement is ridiculous.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by jjbiv » Thu Feb 19, 2015 9:13 am

I'll give him credit for at least appearing to eat his own dog food.

From the most recent form 5500 filing (search), here are the funds held in his firm's (The Lampo Group) 401(k) plan at the end of 2013 and the current value of each fund:

Code: Select all

American Funds Washington Mutual Investors Fund $ 133,382
American Funds The Investment Company of America 1,605,441
American Funds The Growth Fund of America 2,616,883
American Funds The Income Fund of America 247,162
American Funds New Perspectives Fund 1,661,212
American Funds American Funds Money Market Fund 153,892
American Funds American Balanced Fund 444,872
American Funds EuroPacific Growth Fund 936,940
American Funds Intermediate Bond Fund of America 54,361
American Funds Capital World Growth and Income Fund 1,427,317
American Funds SMALLCAP World Fund 1,837,610
American Funds Fundamental Investors 129,488
American Funds American Mutual Fund 28,273
American Funds New Economy Fund 35,568
Columbia Management Mid Cap Growth Fund 53,150
Franklin Templeton Small Cap Growth Fund 88,513
Janus Capital Overseas Fund 57,233
Oppenheimer Funds Developing Markets Fund 143,945
The Royce Funds Pennsylvania Mutual Fund 47,669
The Royce Funds Premier Fund 89,623
Not a single index fund to be found.

American Funds is the record keeper and Raymond James appears to be the investment adviser. AF pays RJ a commission of 50bps of fund assets which suggests that ERs for the share classes held in the plan are not exactly inexpensive.

I'm not sure how he squares this with a fiduciary duty to his employees.

He appears to pay all expenses associated with running the plan (see above).

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by SC Hoosier » Thu Feb 19, 2015 10:16 am

ActionJackson wrote:
SC Hoosier wrote:Haters gotta hate. Rediculous.
...
Dave Ramsey has done as much for people's finances as Jack Bogle has.
No that statement is ridiculous.


Bogle has not taken anyone from poverty to prosperity, which Dave does daily. How can you argue against that?

PS. Thanks for the correct spelling of ridiculous. :oops:
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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by Leesbro63 » Thu Feb 19, 2015 10:20 am

SC Hoosier wrote:
ActionJackson wrote:
SC Hoosier wrote:Haters gotta hate. Rediculous.
...
Dave Ramsey has done as much for people's finances as Jack Bogle has.
No that statement is ridiculous.


Bogle has not taken anyone from poverty to prosperity, which Dave does daily. How can you argue against that?
What makes you think that Bogle didn't do that? I'll there are hundreds/thousands/hundreds of thousands/(millions?) of people who would be in poverty or close had they not learned prudent investing skills from Bogle and Vanguard.

I think the fair comparison would be the overall good that each man has provided to the total number of people. While not taking away from Ramsey's "get outta debt" message to the masses, I'd bet on Jack Bogle for doing the most for the most. And unlike Ramsey, there isn't the offsetting "also did harm" factor of Ramsey's investment advice. Bogle is pure good without any negative to take away from that.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by SC Hoosier » Thu Feb 19, 2015 10:24 am

Leesbro63 wrote:
SC Hoosier wrote:
ActionJackson wrote:
SC Hoosier wrote:Haters gotta hate. Rediculous.
...
Dave Ramsey has done as much for people's finances as Jack Bogle has.
No that statement is ridiculous.


Bogle has not taken anyone from poverty to prosperity, which Dave does daily. How can you argue against that?
What makes you think that Bogle didn't do that? I'll bet there are hundreds/thousands/hundreds of thousands/millions? of people who would be in poverty or close had they not learned prudent investing skills from Bogle and Vanguard.
That is hilarious!! Vanguard can't help you if you don't have money to invest. A friend of mine who is an investment advisor, always says "I'm just helping people add a few feet to their yacht. Dave Ramsey is really changing lives." I love Jack and Vanguard, but lets keep our perspective here.
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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by SpringMan » Thu Feb 19, 2015 10:33 am

IPer wrote:
SC Hoosier wrote:Haters gotta hate. Rediculous.

We are on a forum celebrating a man that saved us 1-2% in fees every year. That is fine and Jack is great. How much do you think Dave is saving people when he motivates them to wake up from their financial stupor and get out of debt? Car payments that they cannot afford, credit cards with 30% interest. He's helping people change their family's bad financial habits, passed down through generations. The ramifications are huge for future generations.

I have made it through the baby steps and found the Bogleheads. I have the best of both worlds.

You people that attack Dave's character and motives are over the top. His character is of the highest degree. The money he makes off of ELP's is a tiny fraction of his world. The whole ELP program is so that he can control how his listeners are advised and treated. He has a lot of staff making sure that it happens as he wishes. I can't believe he makes anything on it. I listen to his shows on his website for FREE and watch it for FREE. No ads. He could definitely charge more than he does for that service, along with FPU, and his books.

You all are taking shots at a wonderful man that doesn't need to work anymore. He's won the game and can retire. He's still doing it because he loves helping people and you are taking shots at him! Shut up!

Dave Ramsey has done as much for people's finances as Jack Bogle has.

Deal with it.
+1 use your words man!
-1 but no problem dealing with it. By Dave's logic, a portfolio of $100K invested for two years when the market went up 50% in the first year and down 50% in the second year for an average return of 0% and the portfolio would still have a value of $100K. That is not the way it works. Dave is arrogant and displays a great deal of hubris. Jack Bogle is very humble.
Last edited by SpringMan on Thu Feb 19, 2015 10:35 am, edited 1 time in total.
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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by Leesbro63 » Thu Feb 19, 2015 10:34 am

SC Hoosier wrote:
Leesbro63 wrote:
SC Hoosier wrote:
ActionJackson wrote:
SC Hoosier wrote:Haters gotta hate. Rediculous.
...
Dave Ramsey has done as much for people's finances as Jack Bogle has.
No that statement is ridiculous.


Bogle has not taken anyone from poverty to prosperity, which Dave does daily. How can you argue against that?
What makes you think that Bogle didn't do that? I'll bet there are hundreds/thousands/hundreds of thousands/millions? of people who would be in poverty or close had they not learned prudent investing skills from Bogle and Vanguard.
That is hilarious!! Vanguard can't help you if you don't have money to invest. A friend of mine who is an investment advisor, always says "I'm just helping people add a few feet to their yacht. Dave Ramsey is really changing lives." I love Jack and Vanguard, but lets keep our perspective here.
Many would not have money to invest, or would not invest the money they do have, without the advice and product (Vanguard) of Jack Bogle. Sorry but I don't find my comment "hilarious"...but rather accurate. That's my final comment on this. I'll let others agree or disagree. Have a great day.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by awval999 » Thu Feb 19, 2015 10:49 am

If it wasn't for watching Suze Orman and listening to Dave Ramsey I would have never found Bogleheads.

Look at some of the posts here, about SWR calculations, I-bonds, back door Roth IRAs, Small Value premiums. These are advanced topics. Nearly everyone of us here would still be able to retire if we were investing in higher cost actively managed funds. Because the majority of us here have the human capital and necessary income to "already win" barring catastrophe physical/health accidents.

Maybe many of you haven't dealt with the financial underclass in this country, but nearly every day I hear some dumb personal finance comment at work, in town, etc. About how working overtime will move you into the higher tax bracket and you'll have less money, how stocks are for the 1% and Wall Street will scam all of your retirement away, $12/hour working class people with $500/month leased cars.

Vanguard has done a lot of good with pushing down expense ratios and making Schwab and Fidelity match with their own index funds. Not to be little that at all. And yes, Dave is a blow hard, and mathematically incorrect.

But his main point, "investment paralysis" is true. The people he's talking to are the financial underclass. Not the people posting at Seeking Alpha, or MorningStar or Bogleheads.

The most important part of saving and investing is delayed gratification. Without spending less than you make and making a plan to pay off debt there will be no retirement, no matter if someone picks class A front load active or Vanguard low expense ratio passive or large cap international growth or small value domestic. Dave makes that perfectly clear.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by nedsaid » Thu Feb 19, 2015 11:02 am

It is pretty clear to me that Dave Ramsey is pretty thin-skinned. A person with a national radio program should expect to get comments and criticism. Most of it has been fairly mild.

His class was offered at my church a few years ago, I went to an introductory course. I decided not to take the full course. I am not going to cut up my credit cards. Nor am I going to put all my retirement into growth funds. I mostly agree with his approach but there are areas of disagreement. His expertise is not in the area of investing.
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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by letsgobobby » Thu Feb 19, 2015 11:39 am

I have no problem with most of what Dave does. If you don't like his politics or his religion, don't listen. Obviously most of his listenership and a pretty good chunk of America do identify with his politics and his religion so that really isn't at issue here.

He advises people to get out of debt at all costs, eating beans and rice if necessary. He is "hard core" about this, and attempts to drive home the urgency of living in debt, and does his listeners a favor by doing this. I guess most Bogleheads are too smart and too wonderful to have ever gotten themselves in too much debt, but most of America isn't as smart or as wonderful (apparently).

He advocates saving at least 15% of your income for retirement, excluding company match. Since most Americans save 1-2-4% or some such nonsense, his advice is very helpful.

He suggests investing only in stocks. This is my biggest disagreement with him, especially for his older viewers, but note this isn't a ton different than what Warren Buffett preaches. The Oracle promotes investing almost exclusively in large American companies and believes that in the long run, stocks will beat bonds. He has repeatedly denigrated the likely future returns of bonds, especially compared with the return prospects of stocks. Another in the all or mostly stock camp is favorite Boglehead author Charles Ellis.

Dave says stocks have earned 12%. Including dividends, that's about right. As pointed out above, including dividends stocks have returned 600%+ since he went on the air. His point is to help people understand the reward possibilities of investing in stocks for the long run, most of his listeners are getting 0.01% in a savings account.

Dave never advocates selling stocks when they are down. He is an inveterate buy and holder. A very Bogleheadian philosophy.

Dave consistently and vociferously rejects all manner of permanent life insurance in favor of term. I believe most Bogleheads will agree with him on that one.

He advocates paying off your mortgage early, once you have an emergency fund and are saving 15%+ for retirement. It may not be mathematically optimal, but for his audience it is probably the correct advice behaviorally.

Dave is a strong proponent of capitalism and self. For his listenership, which may be tempted through their financial circumstances to believe that American capitalism and democracy have failed them, this is an important message to hear. He does not let people feel sorry for themselves. He insists on accountability. And he will tell people that he cannot help them if they do not want to make changes in their lives and in their mindsets. Occasionally he'll get a listener like that, someone who has excuses for everything and reasons she can't change anything. Dave does not mince words. He does not let people languish in the victim role for long. For his audience, this is a good thing.

I don't like his ELP relationships and his advocacy for loaded funds.

Sure, he's an arrogant SOB but he has figured out a very important psychological tenet. In order to help people, you have to be meet them where they are, and you have to be able to speak their language. He does that. He understands that half of America is going to get its financial advice from church, and most of it is going to be horrible (primarily being sold inappropriate permanent life insurance products through affinity sales). He offers an affordable class, various books, and plenty of free material including his radio program and some of his website info. If you were so motivated you could follow is program with a library book and his radio show, costing you nothing.

Jack bogle has done wonders for the investor class. Dave's goal is to help remake his audience from a member of the consumer class to a member of the investor class. He has done that for many people and the gratitude he receives from people is genuine.

I listen to his show every night on the drive home, alternating with NPRs MarketPlace. The latter may speak more to you, personally, but they have an equal weekly audience of 8,000,000, so Dave is speaking to someone, too.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by pkcrafter » Thu Feb 19, 2015 11:47 am

There are two sides to DR--dept and investing. These are very different. DR is very good at the dept issue, and no one is arguing with that. However, he's waaay off the mark on investing. Bogle does comment on debt, but he's 90% about investing. He right, DR is wrong on investing principles. I cannot see how anyone can argue with that or even defend DR on his terrible investing advice. 12% returns, indeed :!:

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by ActionJackson » Thu Feb 19, 2015 12:47 pm

SC Hoosier wrote:
ActionJackson wrote:
SC Hoosier wrote:Haters gotta hate. Rediculous.
...
Dave Ramsey has done as much for people's finances as Jack Bogle has.
No that statement is ridiculous.


Bogle has not taken anyone from poverty to prosperity, which Dave does daily. How can you argue against that?

PS. Thanks for the correct spelling of ridiculous. :oops:
That's funny, I wasn't really trying to correct you on the spelling. That's just a coincidence. :happy

First off I would probably agree with Dave on a lot of religious and political issues, I don't have a bone to pick with him about that.
The issue I have with Dave is that he will not accept correction, thus far his errors would not hurt people terribly (unless you are about to retire and you sell all of your bond positions because Dave said so, that could actually hurt some people). But, given his inability to take correction shows that he could put some truly harmful information out there, and people will follow it. We nerds could scream at the top of our lungs, and he will not accept that what he espouses is wrong. That makes him at least someone to be weary of and possibly endanger others.

Give him a pass if you want, but if you are going to be a leader like he obviously wants to be. Then you are going to be held to a much higher standard, especially when he is claiming a divine purpose in his message.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by ogd » Thu Feb 19, 2015 1:04 pm

The question shouldn't be "is the world a better place with Dave Ramsey on the scene" as argued back and forth in many posts above. That's certainly debatable, but it's not really the point.

The point is that in this area, investment recommendations, he's wrong, he's doing a disservice to his audience and he should fix it. Instead, he's being an arrogant (not to mention self-interested) you-know-what. And although the part of the audience that's gotten to that point is better off than the many struggling with debt, it's still important. Recommendations that lead you to expensive funds and performance chasing ultimately mean you have to save maybe twice as much, if not more, to get to the same place. This isn't peanuts. He should at least have the decency to keep quiet about it, if getting paid is so important.
awval999 wrote:But his main point, "investment paralysis" is true.
Give me a break. "Use a target fund instead of losing half of your long-term returns to the middlemen" -- how hard is that?

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by tfb » Thu Feb 19, 2015 2:04 pm

ogd wrote:The question shouldn't be "is the world a better place with Dave Ramsey on the scene" as argued back and forth in many posts above. That's certainly debatable, but it's not really the point.
I agree. If Dave decides to exit the get-out-of-debt education market, someone else will see it's a profitable business opportunity and step in. It's a win-win for both the educator and the educated. A well meaning educator will see that's enough. Double-dipping in sending people to load funds is just greedy.
Harry Sit, taking a break from the forums.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by midmoder » Thu Feb 19, 2015 2:44 pm

sesq wrote:
tfb wrote:Dave Ramsey lashes out at critics the same way MMM lashes out at critics -- "Don't bug me with these details. Look at the big picture!" The details are kind of important.
Solid point.

I strongly disagree. The two have nothing in common beyond their views on debt and "living like no one else so you can live like no one else." When Ramsey lashes out, he's angry and mean. When MMM responds to critics (I'd never characterize it as "lashing out"), he's funny. He also provides plenty of details.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by toto238 » Thu Feb 19, 2015 2:50 pm

ogd wrote:The question shouldn't be "is the world a better place with Dave Ramsey on the scene" as argued back and forth in many posts above. That's certainly debatable, but it's not really the point.

The point is that in this area, investment recommendations, he's wrong, he's doing a disservice to his audience and he should fix it. Instead, he's being an arrogant (not to mention self-interested) you-know-what. And although the part of the audience that's gotten to that point is better off than the many struggling with debt, it's still important. Recommendations that lead you to expensive funds and performance chasing ultimately mean you have to save maybe twice as much, if not more, to get to the same place. This isn't peanuts. He should at least have the decency to keep quiet about it, if getting paid is so important.
awval999 wrote:But his main point, "investment paralysis" is true.
Give me a break. "Use a target fund instead of losing half of your long-term returns to the middlemen" -- how hard is that?
I agree with this. Whether he is doing net good or net bad in the world is irrelevant. He is giving investment advice, it's a major part of what he does, and he's giving poor advice. It's not a question of differing investment styles, he's advising people to go into demonstrably bad investments. He does so knowingly because he gets a cut. That is not ok. I don't care what else he does with the rest of his time, healing the sick, feeding the hungry, whatever. If you're giving out investment advice, give out good advice.

I'm sure Ramsey has helped a lot of people out of debt, and that's great. How much leeway does that give him in how much he's allowed to steal from them afterwards? How much does he have to steal before hes a net "bad guy" instead of a net "good guy". The number is pretty arbitrary unless you set it at 0. He should not be taking a dime more from people more than is a fair market price. With stocks and bonds, index funds tell you what that fair share is. Every penny he charges more than that (or that his network of advisors charge) is theft.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by knpstr » Thu Feb 19, 2015 3:14 pm

toto238 wrote: I'm sure Ramsey has helped a lot of people out of debt, and that's great. How much leeway does that give him in how much he's allowed to steal from them afterwards? How much does he have to steal before hes a net "bad guy" instead of a net "good guy". The number is pretty arbitrary unless you set it at 0. He should not be taking a dime more from people more than is a fair market price. With stocks and bonds, index funds tell you what that fair share is. Every penny he charges more than that (or that his network of advisors charge) is theft.
Shouldn't there be some reference to a wolf in sheep's clothing somewhere in there? :happy
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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by TareNeko » Thu Feb 19, 2015 3:33 pm

crboone wrote:The bottom-line is that Mr. Ramsey is helpful to many with regard to his debt-elimination program, but he has a serious disconnect when it comes to investing. Sadly, this disconnect causes defensiveness on his part, which rightly causes suspicion on the part of others. It doesn't make for the best presentation on behalf of the principles he espouses. But then, I don't expect anyone to be perfect. It does seem it should be a little embarrassing to speak so confidently against reasonable dissent -- he doesn't leave room for personal correction.
So you are saying that he is not aware of his bad investing advise? He is not aware that his ELPs pouring cash into his bank account? Wow.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by BahamaMan » Thu Feb 19, 2015 3:46 pm

Erhan wrote:So you are saying that he is not aware of his bad investing advise? He is not aware that his ELPs pouring cash into his bank account? Wow.
Yup, And the problem I have with his Religious Pontifications is that his behavior does not square with the Bible that he is often quoting. I have very little time for the Super Rich TV evangelists, and Dave Ramsey is one of them.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by KyleAAA » Thu Feb 19, 2015 3:53 pm

SC Hoosier wrote: Bogle has not taken anyone from poverty to prosperity, which Dave does daily. How can you argue against that?

PS. Thanks for the correct spelling of ridiculous. :oops:
I'm pretty sure Dave hasn't, either, fyi. But even if he has, it's very easy to argue against that. Knowingly giving bad advice is bad regardless of how much other good advice you give. That isn't a reasonable defense for knowingly doing bad. If you drive drunk, it doesn't matter that you donated my life savings to charity the day before. What you did is still bad and you should still be reprimanded for it.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by a2_alice » Thu Feb 19, 2015 4:12 pm

Besides his unprofessional demeanor, the problem when Dave lashes out is that he doesn't actually address the issue. Usually he counters with the fact that he helps people get out of debt (probably true) or that the most important factor in retiring with a sizable nest egg is saving in the first place (also probably true). However, that doesn't make the 12% calculation right.

I don't know if anyone listened to yesterday's (2/18) show but he ranted again about this at around 30:00 (the commercial-free version). He wound up attributing the rant to a Twitter user, but in the the first part of it he definitely tried to address some of the things brought up in this thread.

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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by knpstr » Thu Feb 19, 2015 4:20 pm

SC Hoosier wrote: That is hilarious!! Vanguard can't help you if you don't have money to invest. A friend of mine who is an investment advisor, always says "I'm just helping people add a few feet to their yacht. Dave Ramsey is really changing lives." I love Jack and Vanguard, but lets keep our perspective here.
Dave Ramsey doesn't do anything for me. He is a good pep talk and such, but essentially it is just getting you disciplining yourself like you should have been all along. If it wasn't for Bogle we may not have 0.05% er ratio funds today. Say I put $50,000 in S&P Admiral shares today and live for 60 more years (cross my fingers), not touching the money, the difference between 0.05% and 1.43% expense ratio (my previous EJ American funds) is $4,869,562 in cost and opportunity cost over my lifetime (assuming 9% gross returns for both). I never had access to this savings before this fund existed. So don't think of it as Bogle saving you 1% think of him as saving you multi-millions.

Bogle is providing something that didn't exist before. Dave is just there to crack the whip on you get you out of debt, he instills trust and prowess with debt and then feeds on you with his advisers. Dave is just preaching common sense (which is sometimes uncommon). I was lucky enough that my parents taught me the same thing Dave teaches adults by the time I was 10, my parents on the other hand never created anything like Vanguard.
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Re: Dave Ramsey Lashes Out at His Financial Critics

Post by LadyGeek » Thu Feb 19, 2015 4:26 pm

This thread has run its course and is locked (turned into a bash-fest, there's no added value to to continue).
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