Dave Ramsey against index funds?

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WanderingDoc
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Re: Dave Ramsey against index funds?

Post by WanderingDoc »

selters wrote: Sat Jun 30, 2018 3:49 pm
WanderingDoc wrote: Fri Jun 29, 2018 1:52 pm Wealthy people don't (and have never) listen to Dave Ramsey. They just don't. You cannot become wealthy following his advice. You cannot shrink your way to wealth.
Are you talking about Bogleheads now, or Dave Ramsay? If you listen to Dave Ramsay, one of the things he spends the most time talking about is getting people to increase their income substanitally and not to focus so much on price. The Bogleheads wiki is mostly about cutting (investment) costs and managing what you have wisely. Very little content about increasing income,
I'm listened to dozens of DR live streams. The emphasis is absolutely about contracted and limiting thinking, budgeting, and saving. Also, the man/husband should get a 2nd job when times are tough. Hahah. It's comical so I often listen just to brighten my mood. He's worth $1XXM.. his target audience is low and lower middle class. I clearly said "Dave Ramsey" in that post you quoted.
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Re: Dave Ramsey against index funds?

Post by kmwilson343 »

willthrill81 wrote: Thu Jun 28, 2018 8:00 pm
mortfree wrote: Thu Jun 28, 2018 7:27 pm Dave Ramsey for debt.

Bogleheads for Investing.

[/mic drop]
:thumbsup

Bingo.
+1
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Nate79
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Re: Dave Ramsey against index funds?

Post by Nate79 »

WanderingDoc wrote: Sat Jun 30, 2018 4:43 pm
selters wrote: Sat Jun 30, 2018 3:49 pm
WanderingDoc wrote: Fri Jun 29, 2018 1:52 pm Wealthy people don't (and have never) listen to Dave Ramsey. They just don't. You cannot become wealthy following his advice. You cannot shrink your way to wealth.
Are you talking about Bogleheads now, or Dave Ramsay? If you listen to Dave Ramsay, one of the things he spends the most time talking about is getting people to increase their income substanitally and not to focus so much on price. The Bogleheads wiki is mostly about cutting (investment) costs and managing what you have wisely. Very little content about increasing income,
I'm listened to dozens of DR live streams. The emphasis is absolutely about contracted and limiting thinking, budgeting, and saving. Also, the man/husband should get a 2nd job when times are tough. Hahah. It's comical so I often listen just to brighten my mood. He's worth $1XXM.. his target audience is low and lower middle class. I clearly said "Dave Ramsey" in that post you quoted.
You must have missed the regular millionaire hour. DR plan is simple for a reason. If you don't understand that ok.
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C4NT
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Re: Dave Ramsey against index funds?

Post by C4NT »

averagedude wrote: Thu Jun 28, 2018 9:18 pm Sometimes i listen to Dave Ramsey and i think he has done alot of good by motivating people to get out of debt. It is hard for me to believe that a person can build an empire by just simply telling people to spend less than they earn. What a concept, why did i not think of that? With that being said, I believe he has huge conflicts of interest because of the kickbacks he gets by telling people to contact a endorsed local provider when it comes to investing. If you want to get great advice from someone that has no conflicts of interest, listen to the Clark Howard show. He is very knowlegeble, truly cares about your wallet instead of his, and is the nicest guy i have never met.
+1 for Clark Howard.

I can't recommend him enough, and he fits the Boglehead mold very well.
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Re: Dave Ramsey against index funds?

Post by WanderingDoc »

Nate79 wrote: Sat Jun 30, 2018 5:29 pm
WanderingDoc wrote: Sat Jun 30, 2018 4:43 pm
selters wrote: Sat Jun 30, 2018 3:49 pm
WanderingDoc wrote: Fri Jun 29, 2018 1:52 pm Wealthy people don't (and have never) listen to Dave Ramsey. They just don't. You cannot become wealthy following his advice. You cannot shrink your way to wealth.
Are you talking about Bogleheads now, or Dave Ramsay? If you listen to Dave Ramsay, one of the things he spends the most time talking about is getting people to increase their income substanitally and not to focus so much on price. The Bogleheads wiki is mostly about cutting (investment) costs and managing what you have wisely. Very little content about increasing income,
I'm listened to dozens of DR live streams. The emphasis is absolutely about contracted and limiting thinking, budgeting, and saving. Also, the man/husband should get a 2nd job when times are tough. Hahah. It's comical so I often listen just to brighten my mood. He's worth $1XXM.. his target audience is low and lower middle class. I clearly said "Dave Ramsey" in that post you quoted.
You must have missed the regular millionaire hour. DR plan is simple for a reason. If you don't understand that ok.
I've listened to it many times. You didn't attempt to refute or disprove any of the points I've made above. All good with me :)

Someone who has grinded, cut back, deprived, saved, didn't take vacations, budgeted, payed cash for everything etc. for 20-30 years and now has $1.2M, isn't something to be proud of. It's actually pretty sad.

They gave up their best decades due to a scarcity mentality only to get "rich" when they are old. It's no surprising the financial demographic that follows DR. At least one person (Dave) is better off for it.
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Re: Dave Ramsey against index funds?

Post by david1082b »

Ramsey threads always seem to descend into unactionable bickering and personal barbs trying to put people down for living different lives to one's own. They're pretty dispiriting and bring down the forum to fairly low levels, even worse than the partisan political stuff to me.
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Re: Dave Ramsey against index funds?

Post by TnTWalter »

DEBT
I like Dave Ramsey. Used his advice for the most part to get out of debt and stay out of debt and be mortgage free. I give out his Total Money Makeover books often.

I say 'for the most part' because

1. We have used and continue to use credit cards but always pay off monthly [we don't buy unless we have money in bank kind of idea].

2. And never did CASH envelopes. We do virtual envelopes [YNAB] so we know how much we have left to spend on things. You can check on your phone the category you are spending on [entertainment, etc]. Back in the day, I used actual envelopes but just subtracted from the number on envelope and never used cash only [afraid to lose lol].

Also if it's going to take >2 years to be debt free he doesn't recommend stopping 401k investing.

Getting and staying out of debt is a key to BUILD WEALTH. Whatever system works for you do it. And PLANNING before the month begins [ie. budget]. Then there's investing...

INVESTING.
He does like Index funds....he's actually a fan of Vanguard btw for diy-ers. I listen regularly to his podcasts. He advises a diversified portfolio.
here's an example of his response about Index Funds.
https://www.daveramsey.com/askdave/inve ... ndex-funds
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Re: Dave Ramsey against index funds?

Post by TheAccountant »

Getting out of debt and doing things on the cash basis is a strong factor to building personal wealth for the everyday American.

Of course it's easy to come in here and brag about how much money you're making with that second property you bough with 2% down a few years ago that just so happened to appreciate due to the overinflated market, but let's not get into that right now.
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Re: Dave Ramsey against index funds?

Post by Forester »

Bump, Ramsey is not a fan of target date funds, for your weekend entertainment; https://www.youtube.com/watch?v=kh07IsxLllw
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Re: Dave Ramsey against index funds?

Post by Blue456 »

Esq123 wrote: Thu Jun 28, 2018 7:09 pm Hi all-

I have been listening to Dave Ramsey lately and noticed there is a theme: he is against investing in index funds and believes you can find funds that beat the market.

Well I’m a relatively young investor (30 years old) and predominantly invest in low cost index funds based on all the knowledge I gained through this site.

Curious as to your thoughts? What do you all think of Dave Ramsey here?

Thanks all.
Dave Ramsey is a good guy. I am following his snowball plan and I am really doing well. But when it comes to investments you may want to hang out more around here :).
illumination
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Re: Dave Ramsey against index funds?

Post by illumination »

This issue with Dave Ramsey seems to come up a lot, Is this a big part of Dave Ramsey's "schtick", that index funds are bad? Or is it more of a personal preference?

Like if a caller says they have their retirement in a Vanguard Total Market fund, does he tell them to take it all out and put it in an actively managed fund instead?

The way I score this, Warren Buffett for a really long time hated index funds, but I still think he had solid advice about a great many topics, and truthfully, his style of investing did outperform indexes. I've seen where some of the American funds Ramsey shills for have outperformed (but I'm Still not interested)

Vanguard offers all sorts of actively managed funds that Bogle was involved and many Bogleheads have embraced, Wellington, Wellelsley, Primecap, etc.

Seems a pretty small issue to me.
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Re: Dave Ramsey against index funds?

Post by Nate79 »

It's been a few weeks since there has been a DR thread. Nothing new here. His advice has been consistent for 30 years.
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Re: Dave Ramsey against index funds?

Post by Grt2bOutdoors »

Nate79 wrote: Fri Apr 24, 2020 4:42 pm It's been a few weeks since there has been a DR thread. Nothing new here. His advice has been consistent for 30 years.
I saw this pop up and I thought, oh boy, here we go again! I haven't followed him for quite as long, but for the time I have I will agree with you, his personal finance advice is consistent throughout and he invests in growth, growth and income, international and aggressive growth type mutual funds. He does use an S&P 500 fund and I've heard him advise that is where he puts extra money before he purchases real estate when he accumulates enough money. That is what is suitable for him, may not be for everyone else.
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Re: Dave Ramsey against index funds?

Post by willthrill81 »

Forester wrote: Fri Apr 24, 2020 4:25 pm Bump, Ramsey is not a fan of target date funds, for your weekend entertainment; https://www.youtube.com/watch?v=kh07IsxLllw
That's very odd considering that he says so often that personal finance is dominated by investors' behavior. Multiple studies have shown that investors are more likely to stay the course with target date funds than with traditional funds.

Maybe if the EDLPs that are filling his wallet charged loads on target date funds, he would recommend them.
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Re: Dave Ramsey against index funds?

Post by nisiprius »

Grt2bOutdoors wrote: Thu Jun 28, 2018 8:17 pmHenry Ford used to sell cars to folks, his shtick was you can have any color you like so long as it was black. Why? simply because it kept his costs down, profits up and if it works, why change it?
Actually, multiple colors were available at launch, and later in its product life. It was only for one period of time, and it only had to do with costs and profits indirectly. The issue was drying speed, and the need to produce them quicker to meet demand.

A quick web search indicates that the model T came in many colors, with names like "Phoenix brown" and "Brewster green" but nobody has any accurate references as to what the exact colors were.

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Re: Dave Ramsey against index funds?

Post by dru808 »

He recommends a no load s&p fund for taxable. He likes the TSP’s options. I’d say, he’s not against funds.
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Re: Dave Ramsey against index funds?

Post by whodidntante »

Nate79 wrote: Fri Apr 24, 2020 4:42 pm It's been a few weeks since there has been a DR thread. Nothing new here. His advice has been consistent for 30 years.
Well, we'll just revive this old one, then. :happy

It may be consistent advice, but that doesn't make it good.
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Re: Dave Ramsey against index funds?

Post by Nate79 »

dru808 wrote: Fri Apr 24, 2020 7:20 pm He recommends a no load s&p fund for taxable. He likes the TSP’s options. I’d say, he’s not against funds.
Correct, he recommends to use Vanguard S&P500 index funds all the time. The only fund to hold in taxable accounts.
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Re: Dave Ramsey against index funds?

Post by retire57 »

Like if a caller says they have their retirement in a Vanguard Total Market fund, does he tell them to take it all out and put it in an actively managed fund instead?
I've never heard any of his callers discuss owning mutual funds. That's not who is talking to Dave on the air. Rather, his audience is in financial grammar school. Hopefully, many of them will one day graduate to Bogleheads for an advanced degree..
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Re: Dave Ramsey against index funds?

Post by PharmerBrown »

Nate79 wrote: Fri Apr 24, 2020 7:35 pm
dru808 wrote: Fri Apr 24, 2020 7:20 pm He recommends a no load s&p fund for taxable. He likes the TSP’s options. I’d say, he’s not against funds.
Correct, he recommends to use Vanguard S&P500 index funds all the time. The only fund to hold in taxable accounts.
Yes - rather than pick one of the funds that easily beats the S&P. He's trying to save on taxes, which is the opposite of his argument on mortgage interest. Spend a dollar to save a quarter. :sharebeer
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Re: Dave Ramsey against index funds?

Post by averagedude »

Dave Ramsey:
The good: This guy built an empire by inspiring people to spend less than you earn. Who would had thought of doing that?
The bad: A marketing genius who pushes advertised services to his listening base. Major conflicts of interest.
My take: I listen to Clark Howard, who has NEVER pushed an advertised service to his listeners. His investment advice is to invest with one of the 3 big discount brokers. He actually calls them his children. Vanguard, Fidelity, or Charles Schwab.
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Re: Dave Ramsey against index funds?

Post by anonsdca »

Esq123 wrote: Thu Jun 28, 2018 7:09 pm Hi all-

...and believes you can find funds that beat the market...



There are many ways to beat the market. A fund is just one way. However, that is not the philosophy here as you can see.
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Re: Dave Ramsey against index funds?

Post by Independent George »

Esq123 wrote: Thu Jun 28, 2018 7:09 pm Hi all-

I have been listening to Dave Ramsey lately and noticed there is a theme: he is against investing in index funds and believes you can find funds that beat the market.

Well I’m a relatively young investor (30 years old) and predominantly invest in low cost index funds based on all the knowledge I gained through this site.

Curious as to your thoughts? What do you all think of Dave Ramsey here?

Thanks all.
It is damned easy to find funds that have beaten the market over the last 15 years. It is damned hard to find the funds that will do it over the next 15 years.

And by damned hard, I mean you objectively have a 12% chance of doing so.

Ramsey is great about personal finance. I would not hesitate to recommend him for anyone struggling with bills and finances. He is not great about investments.

At its core is the fact that he invested with American funds early, and several of their funds have indeed beaten the S&P over the last 30 years or so. The question is whether they will continue to do so, and for how long. Because it worked for him, he makes the assumption that it will work for everyone else going forward. This has proven to be demonstrably unlikely.
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Re: Dave Ramsey against index funds?

Post by TN Bogle »

I do find it odd that people here loathe Dave Ramsey. There are a lot of bad guys out there, and I just don't see him as being public enemy number one. The basic premise of his message is live below your means, avoid consumer debt, increase your income, and invest the rest. Seems like a reasonable plan. Probably most people here follow this plan fairly closely. Doesn't mean everything he says is the absolute best or most efficient approach.

It is the equivalent of a personal trainer getting a new client that weighs 350 pounds and trying to get them to live a healthier life with diet, exercise and lifestyle change. They start with baby steps that the client can actually achieve. Then the marathon runners and life long body builders come in and say their ignorant fools because you aren't taking enough branched chain amino acid supplements, creatine or exogenous testosterone. I don't often listen to Ramseys show but the people who call in are really in bad financial shape. Making $30k a year and just purchased a new $40k F150 to tow their new ski boat around with.
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Re: Dave Ramsey against index funds?

Post by dru808 »

TN Bogle wrote: Fri Apr 24, 2020 9:02 pm I do find it odd that people here loathe Dave Ramsey. There are a lot of bad guys out there, and I just don't see him as being public enemy number one. The basic premise of his message is live below your means, avoid consumer debt, increase your income, and invest the rest. Seems like a reasonable plan. Probably most people here follow this plan fairly closely. Doesn't mean everything he says is the absolute best or most efficient approach.

It is the equivalent of a personal trainer getting a new client that weighs 350 pounds and trying to get them to live a healthier life with diet, exercise and lifestyle change. They start with baby steps that the client can actually achieve. Then the marathon runners and life long body builders come in and say their ignorant fools because you aren't taking enough branched chain amino acid supplements, creatine or exogenous testosterone. I don't often listen to Ramseys show but the people who call in are really in bad financial shape. Making $30k a year and just purchased a new $40k F150 to tow their new ski boat around with.
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Re: Dave Ramsey against index funds?

Post by whereskyle »

Esq123 wrote: Thu Jun 28, 2018 7:09 pm Hi all-

I have been listening to Dave Ramsey lately and noticed there is a theme: he is against investing in index funds and believes you can find funds that beat the market.

Well I’m a relatively young investor (30 years old) and predominantly invest in low cost index funds based on all the knowledge I gained through this site.

Curious as to your thoughts? What do you all think of Dave Ramsey here?

Thanks all.
if
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Re: Dave Ramsey against index funds?

Post by Independent George »

TN Bogle wrote: Fri Apr 24, 2020 9:02 pm It is the equivalent of a personal trainer getting a new client that weighs 350 pounds and trying to get them to live a healthier life with diet, exercise and lifestyle change. They start with baby steps that the client can actually achieve. Then the marathon runners and life long body builders come in and say their ignorant fools because you aren't taking enough branched chain amino acid supplements, creatine or exogenous testosterone. I don't often listen to Ramseys show but the people who call in are really in bad financial shape. Making $30k a year and just purchased a new $40k F150 to tow their new ski boat around with.
I mostly agree with you, but the problem with your analogy is that after those baby steps are achieved, Ramsey is the one saying people can easily run 3-hour marathon just by using questionable product X, while the marathoners are saying, "No, really, Dave is great at getting you to stop being obese, but if you want to run a marathon, the best way to do it is...".

I agree with you that he is great for the behavioral aspects of finance, but his investment philosophy is exactly the kind of thing I try very hard to get people away from. I do think Bogleheads tend to be too vehement against him because people who follow his advice to the letter will still do better than 80% of Americans; his investing advice is sub-optimal, and not actually bad.

Incidentally, if you're into fitness, I'm a huge fan of the Shredded Sports Science channel, who takes a scientifically peer-reviewed look at fitness which I think Bogleheads would appreciate, and politely eviscerates the many questionable fitness gurus you can find on youtube. The people he targets are often outright dangerous rather than just sub-optimal.
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Re: Dave Ramsey against index funds?

Post by kimura king »

I think Dave is also an aggressive investor, 100% equities through an advisor. He also has a blerb that the biggest factor is how much you invest over a long period of time, not necessarily the rate of return. He cited a study in the video, I'm not sure I can find it again.

Seems like he is ok with fee's and being really aggressive compared to most bogleheads. Having a paid off house, huge emergency fund, etc, it makes sense to be a little more aggressive with your investments.
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Re: Dave Ramsey against index funds?

Post by MNGopher »

Things Dave Ramsey hates: debt, bonds, liberals, passive index funds.
Things Dave Ramsey loves: unrealistic returns, past performance, Christians, Endorsed Local Providers, his own voice.
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Re: Dave Ramsey against index funds?

Post by AerialWombat »

mortfree wrote: Thu Jun 28, 2018 7:27 pm Dave Ramsey for debt.

Bogleheads for Investing.
One could simplify this to just: Listen to Clark Howard.
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Re: Dave Ramsey against index funds?

Post by Forester »

willthrill81 wrote: Fri Apr 24, 2020 6:57 pm
Forester wrote: Fri Apr 24, 2020 4:25 pm Bump, Ramsey is not a fan of target date funds, for your weekend entertainment; https://www.youtube.com/watch?v=kh07IsxLllw
That's very odd considering that he says so often that personal finance is dominated by investors' behavior. Multiple studies have shown that investors are more likely to stay the course with target date funds than with traditional funds.

Maybe if the EDLPs that are filling his wallet charged loads on target date funds, he would recommend them.
He strikes me as being contrarian for the sake of it. His personal experience with 'aggressive growth, foreign growth' funds wouldn't likely be enjoyed by his listeners. It's harmful advice, how many thousands of his listeners tried to do the right thing, according to him, and got their fingers burnt? Also the way he pivots from the issue of bonds at old age good/bad, to "you gotta buy aggressive growth funds" is confusing his audience.
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Re: Dave Ramsey against index funds?

Post by 1789 »

MNGopher wrote: Fri Apr 24, 2020 10:16 pm Things Dave Ramsey hates: debt, bonds, liberals, passive index funds.
Things Dave Ramsey loves: unrealistic returns, past performance, Christians, Endorsed Local Providers, his own voice.
Very well said. Once he mentioned that he doesn't care how much expense ratios and fees he is paying for a fund. What he cares is total return. Of course that is non sense because the only clear correlation between total returns to other parameters were turned out to be expense ratios+fees. (I think Morningstar did the research on it)
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Re: Dave Ramsey against index funds?

Post by dru808 »

Good growth stock mutual funds”

Dave would fall in love with QQQ if he ever found out about it.
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Re: Dave Ramsey against index funds?

Post by CyclingDuo »

dru808 wrote: Sat Apr 25, 2020 3:04 am Good growth stock mutual funds”

Dave would fall in love with QQQ if he ever found out about it.
QQQ certainly qualifies as a low cost large cap growth ETF. :beer

Since it is an ETF, Dave won't recommend it. 8-)

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Re: Dave Ramsey against index funds?

Post by dru808 »

CyclingDuo wrote: Sat Apr 25, 2020 5:20 am
dru808 wrote: Sat Apr 25, 2020 3:04 am Good growth stock mutual funds”

Dave would fall in love with QQQ if he ever found out about it.
QQQ certainly qualifies as a low cost large cap growth ETF. :beer

Since it is an ETF, Dave won't recommend it. 8-)

https://www.daveramsey.com/askdave/reti ... nvestments

You’re right. USNQX
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Re: Dave Ramsey against index funds?

Post by tvubpwcisla »

Has Mr. Ramsey ever made his portfolio public?
Stay invested my friends.
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Re: Dave Ramsey against index funds?

Post by CyclingDuo »

dru808 wrote: Sat Apr 25, 2020 5:25 am
CyclingDuo wrote: Sat Apr 25, 2020 5:20 am
dru808 wrote: Sat Apr 25, 2020 3:04 am Good growth stock mutual funds”

Dave would fall in love with QQQ if he ever found out about it.
QQQ certainly qualifies as a low cost large cap growth ETF. :beer

Since it is an ETF, Dave won't recommend it. 8-)

https://www.daveramsey.com/askdave/reti ... nvestments

You’re right. USNQX
There you go!

USNQX has a .48% ER compared to .20% for QQQ, but then again - DR doesn't care about ER fees. :mrgreen:
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Re: Dave Ramsey against index funds?

Post by mmcmonster »

Grt2bOutdoors wrote: Thu Jun 28, 2018 8:17 pm To be fair, I don't think that's an accurate portrayal, if you listen closely enough you'll see he's recommended the S&P 500 index from Vanguard, many a time. In fact, he say's he owns an S&P 500 fund. That said, he does recommend the folks who call up his program to talk with SmartVestor Pro's, but all he says is to talk to them, I've never heard him say "you must buy mutual funds from them, nor does he make specific recommendations of which funds to invest in", all he says is pick up the phone and call the ones that are listed for your particular zip code.
That's like going to a barber and asking if you need a hair cut. Most people that make that phone call are going to invest with them.
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Re: Dave Ramsey against index funds?

Post by Superleaf444 »

delete
Last edited by Superleaf444 on Sat Aug 15, 2020 7:15 am, edited 1 time in total.
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Re: Dave Ramsey against index funds?

Post by Helo80 »

MNGopher wrote: Fri Apr 24, 2020 10:16 pm Things Dave Ramsey hates: debt, bonds, liberals, passive index funds.
Things Dave Ramsey loves: unrealistic returns, past performance, Christians, Endorsed Local Providers, his own voice.

He invests in S&P500 Index funds when he has free money... they grow... and then he pulls the money out when he finds good real estate deals.

DR just thinks/implies it's "easy" to find funds that regularly beat the S&P500 if you simply look at past performance over several decades (not like 3-5 years).
Chris001122
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Re: Dave Ramsey against index funds?

Post by Chris001122 »

Dave has some good elements to his work. Reduce or eliminate debt, buy a house, manage your money well by budgeting, and so on. His less popular advice is about investing. Index funds have a lot of advantages and so does having an asset allocation.

Dave is a rich guy. You won't do badly listening to him, but be careful. Dave's risk tolerance is pretty high. Him and his wife went through a huge crisis early in their marriage where he went from millionaire to broke. It has inoculated him somewhat to risks that frighten most people. His twitter feed recently was encouraging folks to stay the course and stay invested. People that have 80-100% stocks saw a lot more drop in their investments than us Bogleheads did in the past 2 months.

So I use some of Dave's advice and some of the Boglehead's advice. And I am pretty well off for an American, but probably not well off compared to your average Boglehead.

:D

PS Dave is a big fan of American Funds. Those have a fairly significant sales load. They have done well in the past. He often claims 12% returns a year. Maybe in a good year, but I don't think that is actual returns. He's quoted that for years, so I think he just has that "stuck" in his mind and he believes it. Not bad for being risk averse, but not very good if you don't own a fantastic business like he does. He's also made some good real estate deals in his life. That is how he got started in life, as a real estate broker, I think.
"It's always been a mistake to bet against the United States since 1776." - Warren Buffett
ValuationsMatter
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Re: Dave Ramsey against index funds?

Post by ValuationsMatter »

9-5 Suited wrote: Thu Jun 28, 2018 8:04 pm I listen to Dave regularly because I think he’s an entertaining guy and they do a good job running a call-in based show. He’s also a really smart businessman/entrepreneur so I enjoy when he talks about that stuff as well.

But as far as investing ... well those calls I “hate listen” :) His advice is flawed in ways that he is too smart not to understand, so I have to assume it’s because of the financial incentives he has to pitch expensive active management and make you seem like a fool for DIYing and choosing to just “be average” with the index.
That "be average" thing is psychological. Everyone wants to do more... want to 'beat' something... wants to win... wants to be exceptional. He's advising people who by and large have just snowballed their way out of debt and have no investment sense. So, being average as an investor is still way ahead of the game they previously played, and it's way ahead of the game that most active investors play. To me, that's far from average. However, it's his way of instilling a greedy little spark in the people that listen to him to give up some of their gains to his active managers with, no doubt, some sort of a financial incentive for him. I agree with you. He's too smart to not know what he's doing there, and I suspect he has an ulterior motive for his advice. That's where I think he goes from someone who is helping people and getting a fair cut for his help, to hurting people and still taking a cut.
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Re: Dave Ramsey against index funds?

Post by winterfan »

Helo80 wrote: Sat Apr 25, 2020 7:33 am
He invests in S&P500 Index funds when he has free money... they grow... and then he pulls the money out when he finds good real estate deals.

DR just thinks/implies it's "easy" to find funds that regularly beat the S&P500 if you simply look at past performance over several decades (not like 3-5 years).
The implication that it's "easy" drives me nuts. He must read this site because he actually called out bogleheads on a podcast I was listening to (questioning his investment returns). I really dislike when tells people that they can just live off 10% of their investments every year. I think it's irresponsible.
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22twain
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Re: Dave Ramsey against index funds?

Post by 22twain »

ValuationsMatter wrote: Sat Apr 25, 2020 8:07 amThat "be average" thing is psychological. Everyone wants to do more... want to 'beat' something... wants to win... wants to be exceptional.
As we've seen even here, more and more, over the past year or two. Look at all the discussions of stock-picking, sector-picking, playing games with leveraged ETFs...
Help save endangered words! When you write "princiPLE", make sure you don't really mean "princiPAL"!
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