Dave Ramsey spends two segments on his investing advice

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willthrill81
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Re: Dave Ramsey spends two segments on his investing advice

Post by willthrill81 » Mon Aug 14, 2017 10:27 am

selters wrote:
Mon Aug 14, 2017 9:19 am
Some of Dave Ramsay's advice may be bad, but it is not bad because he filed for bankruptcy 30 years ago, has ads for blinds on his show or because he tells people to place their money in four not clearly defined categories of mutual funds (growth, growth and income, aggressive growth, and international).
That's true, but his past and the ads cast doubt on his credibility in the minds of many.
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Re: Dave Ramsey spends two segments on his investing advice

Post by Engineer250 » Mon Aug 14, 2017 10:46 am

deltaneutral83 wrote:
Mon Aug 14, 2017 10:06 am
His debt advice is rock solid for about 95% of Americans who have no clue how to use debt wisely. I have no idea why BH's on this forum criticize his aversion to debt. 95% out of 100 Americans have no business attempting to use debt to prosper.
I agree too many Americans in general have a relaxed attitude towards debt. While one could argue Dave swings too far in the other direction, I appreciate the counterweight. Being too calm about "good debt" is what has led too many in my generation still living at home and barely scraping by while dealing with crippling student loan debt. And honestly, plenty of people in older generations as well who should be thinking about retirement but instead are still dealing with student loan debt.

I don't think all Bogleheads are on one side of this issue though. Read any "should I buy this house" or "can I afford x mortgage" thread and the approach to debt is pretty diverse.
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Re: Dave Ramsey spends two segments on his investing advice

Post by Jags4186 » Mon Aug 14, 2017 10:59 am

LEB1230 wrote:
Mon Aug 14, 2017 7:27 am
Dave's vague investment advise is the put 25% in Growth, 25% in Growth and Income, 25% in Aggressive Growth, and 25% in International.

There have been two funds identified that have out performed the S&P overtime (excluding fees). I believe both of the funds would fall into the category of Growth. What other three funds are you now going to select to satisfy Growth and Income, Aggressive Growth, and International that are going to out perform the S&P 500 Index?
I hope you don't misconstrue my posts as supporting Dave Ramsey's investment advice. I'm simply trying to clarify some of the misconceptions about what he says. He supports loaded funds because he refers people to advisers who pay him a kickback. It's that simple. But to say that there aren't funds that have persistently beaten the market over the long term is just plain false. The only thing we don't know is which funds will continue to outperform the market. But I assure you, there will be funds that do it.

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Re: Dave Ramsey spends two segments on his investing advice

Post by Nate79 » Mon Aug 14, 2017 11:02 am

willthrill81 wrote:
Mon Aug 14, 2017 10:25 am
Nate79 wrote:
Mon Aug 14, 2017 10:01 am
DR recommends always use Roth. That is somewhat controversial but not the worst thing in the world.
I don't think that it's controversial at all; it's dead wrong and easily demonstrated to be so. For the overwhelming majority of retirees MFJ, the first ~$20k of income incurs no income tax. Using a 4% withdrawal rate, that means that $500k of tax-deferred assets will support a tax free income (tax free going in and tax free coming out). Similarly, if one can contribute to a tax deferred account when in the 25% bracket but then withdraw the money in the 10% or 15% brackets, then they are ahead with tax deferred compared to the Roth.

There is no controversy here, just simple math. I think that, like some other topics, Dave has simply bought into the idea that paying no income taxes on withdrawals is worth any price on the front-end without actually doing the math.
While I agree and this is how every thread on traditional vs roth retirement account discussion thread goes. However, it is only a mistake in the sense that you are making a bet on the future tax rates. I make that bet and use traditional. I hear the same "roth is best" advice from a number of podcasts I listen to that are much more respected than DR for investment advice (example is Jill Schlesinger). While traditional may be better than roth if the tax law stays as it is today (it most definitely will not but whether it will change for better or worse no one can say) but then this is even further complicated with RMD's, pensions, SS, etc.

That's why I say it's not the worst decision in the world to use Roth. Traditional may be better (I would say likely), but it may not.

I do not want to support DR for his investment advice but the negativity by many threads that have come up on this board over time against DR is way over the top.

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Re: Dave Ramsey spends two segments on his investing advice

Post by Artful Dodger » Mon Aug 14, 2017 11:23 am

For what its worth. From Investopedia...


Growth Fund Comparison

American Funds' Growth Fund of America (AGTHX) is a large-cap equity fund that focuses on capital growth. Portfolio managers practice active stock selection. The fund has an expense ratio of 0.65% and a turnover rate of 29%. Its annualized total return is 10.9% over three years, 9.94% over five years and 5.82% over 10 years.

The Vanguard Growth Index Fund (VIGRX) also seeks capital growth through investments in large-cap equities. The fund tracks the CRSP U.S. Large Cap Growth Index, which includes stocks that make up about 85% of the U.S. stock market’s total capitalization. The fund has an expense ratio of 0.23% and a turnover rate of 9%. It has provided investors with an annualized total return of 11.72% over three years, 11.18% over five years and 7.37% over 10 years.

The increased return for the Vanguard Growth Index Fund exceeds the 0.42% difference in expense ratios. Investors who paid a front-end sales charge to purchase shares of the Growth Fund of America would have been at an even greater disadvantage. The comparison is similar in other asset class funds.

Note they are comparing apples to apples; ie. Vanguard's "growth" index fund vs American Funds GFA, not GFA vs S&P index fund. So, even if DR is saying "growth is the way to go", you're still better off with a passive approach.

Read more: American Funds Vs. The Vanguard Group | Investopedia http://www.investopedia.com/articles/in ... z4pkLf1itl

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Re: Dave Ramsey spends two segments on his investing advice

Post by willthrill81 » Mon Aug 14, 2017 11:23 am

Nate79 wrote:
Mon Aug 14, 2017 11:02 am
willthrill81 wrote:
Mon Aug 14, 2017 10:25 am
Nate79 wrote:
Mon Aug 14, 2017 10:01 am
DR recommends always use Roth. That is somewhat controversial but not the worst thing in the world.
I don't think that it's controversial at all; it's dead wrong and easily demonstrated to be so. For the overwhelming majority of retirees MFJ, the first ~$20k of income incurs no income tax. Using a 4% withdrawal rate, that means that $500k of tax-deferred assets will support a tax free income (tax free going in and tax free coming out). Similarly, if one can contribute to a tax deferred account when in the 25% bracket but then withdraw the money in the 10% or 15% brackets, then they are ahead with tax deferred compared to the Roth.

There is no controversy here, just simple math. I think that, like some other topics, Dave has simply bought into the idea that paying no income taxes on withdrawals is worth any price on the front-end without actually doing the math.
While I agree and this is how every thread on traditional vs roth retirement account discussion thread goes. However, it is only a mistake in the sense that you are making a bet on the future tax rates. I make that bet and use traditional. I hear the same "roth is best" advice from a number of podcasts I listen to that are much more respected than DR for investment advice (example is Jill Schlesinger). While traditional may be better than roth if the tax law stays as it is today (it most definitely will not but whether it will change for better or worse no one can say) but then this is even further complicated with RMD's, pensions, SS, etc.
Keep in mind that tax laws could be changed in such a way as would be disadvantageous to Roth accounts as well. You are making a 'bet' no matter which direction you take, even if you split contributions between the two.
“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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Re: Dave Ramsey spends two segments on his investing advice

Post by garlandwhizzer » Mon Aug 14, 2017 1:30 pm

jbolden1517 wrote:
Loads are bad, but they aren't that bad. You are counting the same money multiple times. On a one year basis that's what they would need to outperform by. On a 10 year basis the load is doing 54 basis points of damage per year and the ER is another 62, so 1.36%. On an annual basis (infinite time) the load effect approaches 0.
From Zacks:
Effect of Sales Fees
Although the Financial Industry Regulatory Authority limits the size of the sales loads to 8.5 percent, such fees have a negative compounded effect on the investor's return from the point of the initial investment. For example, a 5-percent front-end load for a $10,000 investment that earns 8 percent will reduce the initial investment by $500 to $9,500. As a result, the investor's return is reduced over 20 years by $1,937, which is the 8-percent return on $500 compounded quarterly for 20 years.


As is clear from the above, over an infinite time period the compounding effect of sales charges continues to increase, multiplied in direct proportion to the rate of the investment's return. Such claims are often made by brokers who peddle high-sales-charge funds but they are demonstrably false. According to Morningstar, the most accurate determinant of future success of a mutual fund, better than current ratings by experts, is total cost. Low cost wins more and more as the years roll on.

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Re: Dave Ramsey spends two segments on his investing advice

Post by House Blend » Mon Aug 14, 2017 5:22 pm

garlandwhizzer wrote:
Mon Aug 14, 2017 1:30 pm
From Zacks:
Effect of Sales Fees
Although the Financial Industry Regulatory Authority limits the size of the sales loads to 8.5 percent, such fees have a negative compounded effect on the investor's return from the point of the initial investment. For example, a 5-percent front-end load for a $10,000 investment that earns 8 percent will reduce the initial investment by $500 to $9,500. As a result, the investor's return is reduced over 20 years by $1,937, which is the 8-percent return on $500 compounded quarterly for 20 years.

As is clear from the above, over an infinite time period the compounding effect of sales charges continues to increase, multiplied in direct proportion to the rate of the investment's return. Such claims are often made by brokers who peddle high-sales-charge funds but they are demonstrably false. According to Morningstar, the most accurate determinant of future success of a mutual fund, better than current ratings by experts, is total cost. Low cost wins more and more as the years roll on.
I do agree that one should take into account any loads when doing an A vs. B comparison chart. (And am not the least bit surprised if the charts show that the 500 index has outperformed the American Fund in question over the last 10 years, even without accounting for the sales load.)

However, I disagree with this choice of terminology.

Suppose you pay a 5.75% load. That means at every point in the future, your investment would have been worth 1/(1-.0575) = 6.10% more without the load. If it's worth $1M today, it would have been $1.061M without the load. Doesn't matter whether it took you 1 day or 30 years to hit $1M.

That's not compounding.

If you want actual compounding, ask how much more than $1M you would have had if the expense ratio had been 0.04% instead of 0.69%. Here, the answer does depend on whether it took 1 day or 30 years to reach $1M.

For added fun, let's imagine a parallel universe where there are mutual funds with sales loads combined with Vanguard-like expense ratios.

Class A shares of Fund X have no load and a 0.15% ER.
Class B shares of Fund X have a 3% load and a 0.04% ER.

Which one's cheaper? Depends on the holding period. For shorter periods, no load. For longer periods, the load and its pernicious "compounded effects" win.

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Re: Dave Ramsey spends two segments on his investing advice

Post by Lancelot » Mon Aug 14, 2017 6:32 pm

willthrill81 wrote:
Mon Aug 14, 2017 10:25 am
Nate79 wrote:
Mon Aug 14, 2017 10:01 am
DR recommends 100% stock. That is very common on this site for many bogleheads (not for me....). Yes it is controversial.
I believe that the overwhelming majority of us who are 100% stocks, myself included, are so in part because we are still a long ways off from retirement. I certainly know that I won't be all stocks in retirement.
You put your finger on it Will; 100% stocks is the place to be for young investors because they can ride out the market crashes. A 40% correction for a retiree would be different matter.
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Re: Dave Ramsey spends two segments on his investing advice

Post by 1210sda » Mon Aug 14, 2017 6:55 pm

Vanguard's 500 fund has a minimal tracking error. (over 99% of the index since inception). Therefore, one can have a high degree of confidence that the fund will approximately match the market return in the future.

One can't say that for an American Fund (of comparable risk).

The examples being cited of an American Fund that outperformed the market can only be known in hindsight.

Contrary to the 500 fund, you cannot have a high degree of confidence as to what the American Fund will do in the future.

And that doesn't even consider sales charges or taxes due to turnover (in a taxable account, of course).

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Re: Dave Ramsey spends two segments on his investing advice

Post by 1210sda » Mon Aug 14, 2017 7:00 pm

Larry Swedroe has a wonderful little book (less than 100 pages) called "The Incredible Shrinking Alpha".

If reading that book doesn't convince you that active management beating passive investing is very difficult, then nothing will.

1210

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Re: Dave Ramsey spends two segments on his investing advice

Post by zonto » Mon Aug 14, 2017 10:05 pm

This was the allocation assigned to an online acquaintance of mine by his Dave Ramsey ELP: At the links above, one may switch between tabs showing "Returns at NAV" and "Returns With Sales Charge [at 5.75%]" for one-, five-, and 10-year periods. Default front-end load is 5.75%; however, I believe some ELPs also drop this to somewhere between 4.5% and 5.0%.

Using M* free instant x-ray, I show 8% cash, 70% U.S. stock, 20% foreign stock, 1% bond, 2% other. Annual expense ratio = 0.69%.

Equity style box:

Code: Select all

15   21   44
4    5    8
1    0    2
Using Portfolio Analyzer, since January 1987 through July 2017, the CAGR for VFINX was 10.20% and the CAGR for the DR portfolio was 10.65%. I am not sure whether this factors in the front-end load or not. DR had a slight edge in Sharpe and Sortino Ratio. Looking briefly at the annual returns bar graphs, the DR portfolio outperformed in a few years around 1999, 2001, and 2009.

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Re: Dave Ramsey spends two segments on his investing advice

Post by 1210sda » Tue Aug 15, 2017 7:27 am

rlovendale wrote:
Mon Aug 14, 2017 10:05 pm

Using Portfolio Analyzer, since January 1987 through July 2017, the CAGR for VFINX was 10.20% and the CAGR for the DR portfolio was 10.65%. I am not sure whether this factors in the front-end load or not. DR had a slight edge in Sharpe and Sortino Ratio. Looking briefly at the annual returns bar graphs, the DR portfolio outperformed in a few years around 1999, 2001, and 2009.
Again, choosing a "winner" in hindsight is pretty easy.
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Re: Dave Ramsey spends two segments on his investing advice

Post by flossmoor » Tue Aug 15, 2017 9:53 am

Anybody who talks in terms of a "safe" 8% withdrawal rate from a retirement fund, or hints that 12% going forward is a reasonable target/goal/hope is just wrong.

Case closed, the end.

I have never listened to this clown and that stuff alone is enough to know his advice is worthless.

And the credit card thing? Ha ha ha. I have about 8,000,000 frequent flier miles and points like Hilton/Marriott/Wyndham/Southwest/Chase UR/SPG/AMEX MR/Citi/Capital One... piled up from judicious use of CCs. Over $100k in value. Not counting the ones I have burned.

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Re: Dave Ramsey spends two segments on his investing advice

Post by willthrill81 » Tue Aug 15, 2017 10:07 am

flossmoor wrote:
Tue Aug 15, 2017 9:53 am
And the credit card thing? Ha ha ha. I have about 8,000,000 frequent flier miles and points like Hilton/Marriott/Wyndham/Southwest/Chase UR/SPG/AMEX MR/Citi/Capital One... piled up from judicious use of CCs. Over $100k in value. Not counting the ones I have burned.
Prior to this year, my DW and I had probably received $10k in credit card rewards. We started churning credit cards for signup bonuses this year and will earn around $4k in just this year. :D
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Re: Dave Ramsey spends two segments on his investing advice

Post by garlandwhizzer » Tue Aug 15, 2017 12:48 pm

flossmoor wrote:
Anybody who talks in terms of a "safe" 8% withdrawal rate from a retirement fund, or hints that 12% going forward is a reasonable target/goal/hope is just wrong.

Case closed, the end.
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Re: Dave Ramsey spends two segments on his investing advice

Post by sschullo » Mon Mar 19, 2018 7:07 pm

Tamalak wrote:
Sun Aug 13, 2017 9:30 am
It's always been my policy that if your net worth is below zero, listen to Dave Ramsey, and if it's above zero, listen to Bogleheads.
He is only good at getting you out of debt and staying out.
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Re: Dave Ramsey spends two segments on his investing advice

Post by youngpleb » Mon Mar 19, 2018 7:45 pm

In one of his books, he recommends investing 75% in domestic equities (split evenly among large, mid, and small cap) and the other 25% in international. I've always found that to be quite interesting. It'd probably be pretty tumultuous some years, but if an investor could weather that they'd probably end up very well-off. My mom listens to his podcast, and she says he stated that he only invests in growth-oriented funds.

I think the key is that he basically owns so much real-estate that he isn't tied to his investments like your average person is. I'd probably be the same way if I were him.
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Re: Dave Ramsey spends two segments on his investing advice

Post by haban01 » Mon Mar 19, 2018 7:53 pm

Growth, Aggressive Growth, Growth and Income, and International. Lol :moneybag
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Re: Dave Ramsey spends two segments on his investing advice

Post by willthrill81 » Mon Mar 19, 2018 8:33 pm

willthrill81 wrote:
Mon Aug 14, 2017 11:23 am
Nate79 wrote:
Mon Aug 14, 2017 11:02 am
willthrill81 wrote:
Mon Aug 14, 2017 10:25 am
Nate79 wrote:
Mon Aug 14, 2017 10:01 am
DR recommends always use Roth. That is somewhat controversial but not the worst thing in the world.
I don't think that it's controversial at all; it's dead wrong and easily demonstrated to be so. For the overwhelming majority of retirees MFJ, the first ~$20k of income incurs no income tax. Using a 4% withdrawal rate, that means that $500k of tax-deferred assets will support a tax free income (tax free going in and tax free coming out). Similarly, if one can contribute to a tax deferred account when in the 25% bracket but then withdraw the money in the 10% or 15% brackets, then they are ahead with tax deferred compared to the Roth.

There is no controversy here, just simple math. I think that, like some other topics, Dave has simply bought into the idea that paying no income taxes on withdrawals is worth any price on the front-end without actually doing the math.
While I agree and this is how every thread on traditional vs roth retirement account discussion thread goes. However, it is only a mistake in the sense that you are making a bet on the future tax rates. I make that bet and use traditional. I hear the same "roth is best" advice from a number of podcasts I listen to that are much more respected than DR for investment advice (example is Jill Schlesinger). While traditional may be better than roth if the tax law stays as it is today (it most definitely will not but whether it will change for better or worse no one can say) but then this is even further complicated with RMD's, pensions, SS, etc.
Keep in mind that tax laws could be changed in such a way as would be disadvantageous to Roth accounts as well. You are making a 'bet' no matter which direction you take, even if you split contributions between the two.
For the record, those tax laws did indeed change so as to favor those who contributed to traditional accounts when the tax rates were higher.
“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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Re: Dave Ramsey spends two segments on his investing advice

Post by Pajamas » Tue Mar 20, 2018 1:03 am

Tamalak wrote:
Sun Aug 13, 2017 9:30 am
It's always been my policy that if your net worth is below zero, listen to Dave Ramsey, and if it's above zero, listen to Bogleheads.
You also need to be so goofy and irrational and beyond hope that snowballing credit card debt starting with the smallest balance is a more realistic strategy than paying off the card with the highest interest rate first. I always say Dave Ramsey or Suze Orman is better than nothing, but that's a low bar.

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Re: Dave Ramsey spends two segments on his investing advice

Post by mhadden1 » Tue Mar 20, 2018 2:13 am

Due to station-changing inertia, I used to listen to Dave Ramsey quite a lot when he was on the radio station that I tuned to for baseball games.

I found him unserious and not thoughtful at all about investing. The thing that bothered me most was when he proposed an 8% (unsafe) withdrawal rate. I really wish he wouldn't do that. This is basically a number he pulled out of a hat, reasoning that if the stock market returns 12% (yes I know), then you can probably withdraw 8%. That's all the "research" he put into it. Eat your hearts out, Pfau et al! Sorry you wasted all that time and effort coming up with 4%, based on some pretty compelling evidence presented in academic papers.

If DR followers expect 8% withdrawal rates, and plan and act accordingly, I fear it will work poorly for a great many. DR is doing them a big disservice.

Rant alert: his need to always be right really chaps my *ss.
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Re: Dave Ramsey spends two segments on his investing advice

Post by fortyofforty » Tue Mar 20, 2018 6:02 am

mrpotatoheadsays wrote:
Sun Aug 13, 2017 11:18 pm
Dave Ramsey is a salesman.

Why would anyone in their right mind blindly take investment advice from a guy who sells insurance, blinds and prepackaged meals?

:?
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Re: Dave Ramsey spends two segments on his investing advice

Post by Oak&Elm » Tue Mar 20, 2018 6:39 am

At my church the DR Financial Peace is heavily promoted. I have never attended, didn’t want to spend the $100 for class materials. Anyhow people on this forum would be horrified to hear many of the stories of how badly people handle their money. I would totally agree DR gets many folks going the right direction. As for his investment advice I will pass, Bogleheads Guide to Investing makes more sense and I love the simplicity. thank you Taylor

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Re: Dave Ramsey spends two segments on his investing advice

Post by ryman554 » Tue Mar 20, 2018 9:34 am

Pajamas wrote:
Tue Mar 20, 2018 1:03 am
You also need to be so goofy and irrational and beyond hope that snowballing credit card debt starting with the smallest balance is a more realistic strategy than paying off the card with the highest interest rate first. I always say Dave Ramsey or Suze Orman is better than nothing, but that's a low bar.
Those that are good at finance see the cost-benefit analysis of paying off high-interest first.

Those that are not are in credit card debt. I used to believe what you do, but have come around to the behavioral aspect of it as well as the "cash flow" aspect: getting rid of one minimum payment means you have more cash flow to attack the rest and one less phone call when you stop paying.

Dave himself will tell you it's suboptimal mathematically in his cantankerous way. But it seems to work, so cut that part of his advice some slack. Fire away on the investment advice.

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Re: Dave Ramsey spends two segments on his investing advice

Post by RetiredNewbie » Tue Mar 27, 2018 5:44 pm

Pajamas wrote:
Tue Mar 20, 2018 1:03 am
You also need to be so goofy and irrational and beyond hope that snowballing credit card debt starting with the smallest balance is a more realistic strategy than paying off the card with the highest interest rate first. I always say Dave Ramsey or Suze Orman is better than nothing, but that's a low bar.
Count me among the goofy and irrational. I found Dave Ramsey a year after I had started attacking my credit card debt. I had seven cards with balances. Two of them had balances of $12,000, and one had a $500 balance. I never considered for a moment enduring the aggravation of paying $25 per month for 20 months on the smallest one, just to save a few bucks in interest. I got rid of it immediately. But that was about the only thing I agreed with Dave Ramsey on. I wasn't about to cut my credit cards up, I wasn't about to stuff cash in an envelope for each bill and then take it out again to pay the bills, and I surely wasn't about to follow any of his investing advice.
Your attitude about risk changes significantly when the bear begins to maul you.

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Re: Dave Ramsey spends two segments on his investing advice

Post by smitty1515 » Tue Mar 27, 2018 6:53 pm

Oak&Elm wrote:
Tue Mar 20, 2018 6:39 am
At my church the DR Financial Peace is heavily promoted. I have never attended, didn’t want to spend the $100 for class materials. Anyhow people on this forum would be horrified to hear many of the stories of how badly people handle their money. I would totally agree DR gets many folks going the right direction. As for his investment advice I will pass, Bogleheads Guide to Investing makes more sense and I love the simplicity. thank you Taylor
I facilitate FPU at my church. I am mid 30s and my wife and I (actually me) stumbled across Dave Ramsey in 2011. At the time we had 30k in student loan debt, 20k auto loan, vehicle lease, and mortgage. We were saving money every month but we lacked a plan. The Ramsey plan helped us create the plan to pay off 50k in non-mortgage debt (using the debt snowball method) in 13 months. Today our NW is ~$500k, savings rate 40% of income (sans taxes), and only debt (mortgage) will be paid off in 11 years.

The reason I facilitate FPU is the average American does not possess 10% of the financial acumen of a Boglehead. The last FPU group had 14 households with total non mortgage debt of > $700k and savings of $115k. There was one household with $300k in student loan debt and $0 in savings and they are not high earners.

The success of Ramsey is not about math but behavior. It takes identification of a problem (debt, spending habits, emotional spending, financial infidelity) and gives a suitable method in order to pay it off. I struggled with the interest rate vs smallest balance because I believe in utilizing basic math principles however we did use the snowball method and found it to provide motivation to keep going.

I feel a bit dirty during the investment lesson because I ascribe to Boglehead's method of passive investing. I do not believe most need a financial advisor and if I did it would be a fee only advisor. I also cringe at the 12% ROI and 8% SWR he mentions (in books or his radio show). Having said this, Dave Ramsey's advice is what initially sparked my interest in investing after paying off debt. Thank the good Lord my curiosity led me to researching other opinions which led me to the works of Bogleheads, Bogle, Bernstein, Malkiel, Tobias, and Ferri. My hope is folks going through FPU use his lessons on budgeting, paying off debt, and delaying gratification and when the time comes find alternative investing methods. I try to stay in contact with participants and during small talk introduce them to Bogleheads.
Be fearful when others are greedy and greedy when others are fearful. -Warren Buffett

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mhadden1
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Re: Dave Ramsey spends two segments on his investing advice

Post by mhadden1 » Tue Mar 27, 2018 7:08 pm

smitty1515 wrote:
Tue Mar 27, 2018 6:53 pm
Oak&Elm wrote:
Tue Mar 20, 2018 6:39 am
At my church the DR Financial Peace is heavily promoted. I have never attended, didn’t want to spend the $100 for class materials. Anyhow people on this forum would be horrified to hear many of the stories of how badly people handle their money. I would totally agree DR gets many folks going the right direction. As for his investment advice I will pass, Bogleheads Guide to Investing makes more sense and I love the simplicity. thank you Taylor
I facilitate FPU at my church.
.....

I do not believe most need a financial advisor and if I did it would be a fee only advisor. I also cringe at the 12% ROI and 8% SWR he mentions (in books or his radio show).
Not that I am so morally fibrous, but I consider this a small ethical lapse. Nothing like horse doping or whole life insurance selling, but a lapse nonetheless.
Oh I can't, can I? That's what they said to Thomas Edison, mighty inventor, Thomas Lindberg, mighty flyer,and Thomas Shefsky, mighty like a rose.

RetiredNewbie
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Re: Dave Ramsey spends two segments on his investing advice

Post by RetiredNewbie » Tue Mar 27, 2018 8:19 pm

smitty1515 wrote:
Tue Mar 27, 2018 6:53 pm
The Ramsey plan helped us create the plan to pay off 50k in non-mortgage debt (using the debt snowball method) in 13 months.
Before I ever heard of DR, I unknowingly used the snowball method to pay off my small credit card bills of a few hundred dollars that were merely a nuisance. But once I got to concentrating on the cards with balances in the thousands of dollars, I started paying off the ones with the highest interest rates first. I would have never considered following the snowball method until all my credit cards were paid off. I don't see how that could possibly make sense under any circumstances.
Your attitude about risk changes significantly when the bear begins to maul you.

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Re: Dave Ramsey spends two segments on his investing advice

Post by smitty1515 » Tue Mar 27, 2018 8:38 pm

RetiredNewbie wrote:
Tue Mar 27, 2018 8:19 pm
smitty1515 wrote:
Tue Mar 27, 2018 6:53 pm
The Ramsey plan helped us create the plan to pay off 50k in non-mortgage debt (using the debt snowball method) in 13 months.
Before I ever heard of DR, I unknowingly used the snowball method to pay off my small credit card bills of a few hundred dollars that were merely a nuisance. But once I got to concentrating on the cards with balances in the thousands of dollars, I started paying off the ones with the highest interest rates first. I would have never considered following the snowball method until all my credit cards were paid off. I don't see how that could possibly make sense under any circumstances.
Why it’s called personal finance I suppose...

Really glad you were able to axe the debt regardless of how it was accomplished.
Be fearful when others are greedy and greedy when others are fearful. -Warren Buffett

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Oak&Elm
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Re: Dave Ramsey spends two segments on his investing advice

Post by Oak&Elm » Wed Mar 28, 2018 11:18 am

At my church the DR Financial Peace is heavily promoted. I have never attended, didn’t want to spend the $100 for class materials. Anyhow people on this forum would be horrified to hear many of the stories of how badly people handle their money. I would totally agree DR gets many folks going the right direction. As for his investment advice I will pass, Bogleheads Guide to Investing makes more sense and I love the simplicity. thank you Taylor
[/quote]

I facilitate FPU at my church.
.....

I do not believe most need a financial advisor and if I did it would be a fee only advisor. I also cringe at the 12% ROI and 8% SWR he mentions (in books or his radio show).
[/quote]

Not that I am so morally fibrous, but I consider this a small ethical lapse. Nothing like horse doping or whole life insurance selling, but a lapse nonetheless.
[/quote]

At first it sorta bothered me that the church would provide a class on managing your finances but the more I thought about it I wished my parents could have gone through something like Financial Peace University versus trusting Edward Jones with their hard earned money. There is a guy on the radio in my area which advertises non-stop to "help" you retire. Point being most folks don't know where to turn for good honest advice. I can say without reservation this web-site is beneficial to so many people at different stages of their financial life, so glad I found it.

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mhadden1
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Re: Dave Ramsey spends two segments on his investing advice

Post by mhadden1 » Wed Mar 28, 2018 11:35 am

Oak&Elm wrote:
Wed Mar 28, 2018 11:18 am
At first it sorta bothered me that the church would provide a class on managing your finances but the more I thought about it I wished my parents could have gone through something like Financial Peace University versus trusting Edward Jones with their hard earned money. There is a guy on the radio in my area which advertises non-stop to "help" you retire. Point being most folks don't know where to turn for good honest advice. I can say without reservation this web-site is beneficial to so many people at different stages of their financial life, so glad I found it.
That's exactly what I mean though, Dave Ramsey is very cool with Edward Jones and that ilk, I think. But I don't know if EJ is explicitly on the DR investment list. And yes, I got an extra $20 at the ATM once and kept it.
Oh I can't, can I? That's what they said to Thomas Edison, mighty inventor, Thomas Lindberg, mighty flyer,and Thomas Shefsky, mighty like a rose.

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Re: Dave Ramsey spends two segments on his investing advice

Post by Nate79 » Wed Mar 28, 2018 12:58 pm

mhadden1 wrote:
Wed Mar 28, 2018 11:35 am
Oak&Elm wrote:
Wed Mar 28, 2018 11:18 am
At first it sorta bothered me that the church would provide a class on managing your finances but the more I thought about it I wished my parents could have gone through something like Financial Peace University versus trusting Edward Jones with their hard earned money. There is a guy on the radio in my area which advertises non-stop to "help" you retire. Point being most folks don't know where to turn for good honest advice. I can say without reservation this web-site is beneficial to so many people at different stages of their financial life, so glad I found it.
That's exactly what I mean though, Dave Ramsey is very cool with Edward Jones and that ilk, I think. But I don't know if EJ is explicitly on the DR investment list. And yes, I got an extra $20 at the ATM once and kept it.
As far as I know, no DR does not recommend (nor would he) Edward Jones. DR advice is simple 4 fund, nothing fancy investing. Buy and hold only. I believe his ELP's are generally independant and must sign up for his program. His ELP's must agree and follow DR's advice fully, no exception. Once on the air a caller mentioned that an ELP was recommending some product (annuity maybe?) that DR absolutely doesn't recommend. They asked the caller to hold on so they could get the ELP's name for follow-up.....

DR is very much against the pushy salesman tactics of investment advisors. He is also 100% against permanent life (whole life, etc), annuities, etc which are often pushed by these type of salesman. Yes, he has no problem with mutual funds with high fees as well as front end loads (I remember he said he prefers front end load vs AUM because he buys and holds for a long time).
DR is a fan of American Funds, though he rarely ever mentions their name, and only for tax advantage accounts. For taxable it is no load S&P500 index fund (for example he owns Vanguard S&P500).

Not defending his advice, just stating facts.

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mhadden1
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Re: Dave Ramsey spends two segments on his investing advice

Post by mhadden1 » Wed Mar 28, 2018 1:12 pm

Nate79 wrote:
Wed Mar 28, 2018 12:58 pm
Yes, he has no problem with mutual funds with high fees as well as front end loads
....
Not defending his advice, just stating facts.
Ok, I stand corrected. I don't buy those so, not interested.
Oh I can't, can I? That's what they said to Thomas Edison, mighty inventor, Thomas Lindberg, mighty flyer,and Thomas Shefsky, mighty like a rose.

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Re: Dave Ramsey spends two segments on his investing advice

Post by develop » Wed Mar 28, 2018 1:43 pm

Tamalak wrote:
Sun Aug 13, 2017 9:30 am
It's always been my policy that if your net worth is below zero, listen to Dave Ramsey, and if it's above zero, listen to Bogleheads.
So well said! I like that!

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