Dave Ramsey mentioned bogleheads today

[willthrill81]

For those that think that Dave might be right that fees aren't a big deal, look at this post on the White Coat Investor site, with a brief example below.

To Summarize our assumptions for Jack:

$10,000 tax deferred annual investment, in monthly increments
8% nominal returns while working
5% nominal returns in retirement
$60,000 withdrawn annually in retirement for spending & tax payments
Fees could be as low as 0.1% and as high as 3%
Jack works and invests from age 22 and retires at age 62

By investing $10,000 a year for 40 years, Jack can expect to amass anywhere from $1.28 million to $2.84 million, depending on fees. That’s a difference of $1.56 million dollars available at retirement. The DIY plan with 0.1% in fees grows to be 122% larger than the 3.0% fee plan.

And that’s not the half of it.

Continuing on into retirement, keeping spending constant at $60,000 a year, if Jack lives to be 100, he could have an 8-figure portfolio with the lowest fee structure. Or he could be out of money before his 90th birthday. If he survives to age 102, the difference between 0.1% fees and 3.0% fees exceeds $13 million!

Fees should not be thought of in vacuum. Instead should look at actual fund performance because fund performance is after fees.

But fees have been robustly shown to not lead to higher returns. The inverse has actually been true.

As Bogle correctly pointed out, in the investment world, you get what you don't pay for.

The investor paying 2% in combined AUM fees, front-end loads, and expense ratios is going to be 1.9% behind the investor paying .1% in expense ratios and nothing else.

Vanguard is very pro active fund. The question is can the fund manager overcome the fees with performance.

Loads, AUM, or fixed fee is how you pay your advisor. This should be a separate discussion than expense ratios. There are good advisors out there (Rick Ferri for example) and they don't work for free. Their time, advise, planning, tax advice, etc whatever they are doing costs and it costs a lot.

I agree that a lot of this comes down to whether an investor is DIY or wants their hand held. But there's no disputing the pure math that says that the latter is going to cost investors, probably a lot, over their lifetime. If it keeps them from panic selling and on track, then maybe it's worth it.

I wish I understood why you're so pro-Ramsey. You seem to be very quick to defend everything that he says, even when the math isn't on his side.

[bck63]

https://www.youtube.com/watch?v=Jm25gueDHsE&t=1302s

At 6:50 a guy calls in about index funds and they talk about it until 8:20

At 13:30 Dave Ramsey says he has never heard a millionaire that says they were held back by an expense ratio, talks about loading fee's, bogleheads and a Vanguard s&p 500 are specifically mentioned at 17:00.

My 2 cents - he tap dances around the impact of high fees. It matters 1 year into investing and 10 years into investing. It matters every year. Also, just because people are millionaires doesn't mean they are an investing expert, I mean JL Collins went to talk to google employee's and stated everyone there was smart and made a lot of money but that didn't meant they were smart about investing. Anyways just thought I would share. 3 fund is better than what these salesmen, I mean "advisors", have to offer.

Ok.

If "Ok" means "thanks for sharing, because this is important information that people on here - especially newcomers - should know or be reminded of," then +1.

[1210sda]

Vanguard is very pro active fund. The question is can the fund manager overcome the fees with performance.

It appears that what you saying is that the fund manager can deliver "alpha" (excess return without additional risk).

Larry Swedroe has written two books on the difficulty of achieving alpha.

One needs to be aware that "overcoming the fees with performance" just might be due to increased risk.

Increasing return through cost reduction doesn't involve additional risk.

[Nate79]

Vanguard is very pro active fund. The question is can the fund manager overcome the fees with performance.

It appears that what you saying is that the fund manager can deliver "alpha" (excess return without additional risk).

Larry Swedroe has written two books on the difficulty of achieving alpha.

One needs to be aware that "overcoming the fees with performance" just might be due to increased risk.

Increasing return through cost reduction doesn't involve additional risk.

Yes, such as here:
https://institutional.vanguard.com/VGAp ... lphaActive

[LeslieSmiley]

I don't agree with Ramsey on investing, but he does more for getting the uneducated investor on the right path than Bogleheads does.

Just think about how much more he could do for the "uneducated investor" if only he were intellectually honest about his investing advice.

exactly! some people invest in gold, some people invest in bitcoin and some people invest in index funds. if an instrument does help to achieve such goal (beating inflation, growing wealth, providing steady income, mitigating volatility, etc.), one should simply assert that so-and-so method/principle is the one that works to achieve such goal because of this and that without making an intellectually dishonest declaration on the other instruments as "stupid" and making condescending comment like "it's not rocket science".

[LeslieSmiley]

That's all obviously a different subject than the ER fees and asset allocation of a typical Ramsey investor compared to a Boglehead, but just saying "those who live in glass houses should not throw stones"...

For those who did stay the course, always keep their fees low, and are consistent with their Boglehead portfolio contributions and AA - kudos! It appears due to the volume of non-Boglehead behavior on the Boglehead.org forums, that there might be more instructive criticism that could take place right here at the home message forums rather than directing it at DR and his followers.

CyclingDuo

yes, we should discuss those behavioral problems that some BH folks displayed here and it's evident that we are indeed doing so. but that should not be the reason to curb criticism on DR's assertion and model that is flawed and intellectually dishonest. the two are not mutually exclusive.

[Carguy85]

How many on here that panic sold were debt free? Also, theoretically if you had the option, would you buy the middle of the road optioned car in cash now that met your needs or be tempted to buy the fully loaded one because it had 0% interest? Same psychology more/less with credit cards. He says he never met any millionaires that got rich off credit card offers. To a certain extent he is right about credit cards even if paid in full every month. What he says about debt has merit although it may make some on here hostile towards him who like to borrow. With investing...not so much but better than nothing. He obviously is responding to monetary incentive.

[Helo80]

CMH Cost Matters Hypothesis is King. An extra 0.2% negatively compounded will kill any tilt or strategy.

Ramsey is probably aware of the criticism, and aware of the mountains of evidence, but he's too stubborn to recommend low cost index funds over his 12% growth funds.

I suspect it's not a matter of personality but of financial incentives.

What are your thoughts about SD and all their referral links they magically add whenever any URL (including google.com) is posted in the forum? Even though SD is about saving money, they sure don't like people talking about Mr. Rebates, Ebates, and the like. Even FatWallet was banned back when FW was still around (and at least they shared in the referral link revenue).

[Nate79]

For those that think that Dave might be right that fees aren't a big deal, look at this post on the White Coat Investor site, with a brief example below.

Fees should not be thought of in vacuum. Instead should look at actual fund performance because fund performance is after fees.

But fees have been robustly shown to not lead to higher returns. The inverse has actually been true.

As Bogle correctly pointed out, in the investment world, you get what you don't pay for.

The investor paying 2% in combined AUM fees, front-end loads, and expense ratios is going to be 1.9% behind the investor paying .1% in expense ratios and nothing else.

Vanguard is very pro active fund. The question is can the fund manager overcome the fees with performance.

Loads, AUM, or fixed fee is how you pay your advisor. This should be a separate discussion than expense ratios. There are good advisors out there (Rick Ferri for example) and they don't work for free. Their time, advise, planning, tax advice, etc whatever they are doing costs and it costs a lot.

I agree that a lot of this comes down to whether an investor is DIY or wants their hand held. But there's no disputing the pure math that says that the latter is going to cost investors, probably a lot, over their lifetime. If it keeps them from panic selling and on track, then maybe it's worth it.

I wish I understood why you're so pro-Ramsey. You seem to be very quick to defend everything that he says, even when the math isn't on his side.

First, I love his podcast and style regardless whether I agree with everything he says. BH is full of all different types of financial philosophies - just look at the strategy of using 3x leveraged ETFs, value tilts, etc. Many strategies that are not low cost. Many use advisors. Many are anti debt. Yet DR gets called a scam, salesman, etc mostly by people who are ignorant and haven't listen to the show.

Overall I think his plan is genius, so simple that I would recommend it in entirety to most people (the baby steps, term life only, don't be house poor, no debt, etc). Most of my friends, colleagues, and family would be far better off to follow his entire plan than to do their half baked plans, mostly financial disasters like most Anericans. I do not believe that most people are willing or capable to DIY without doing stupid stuff (bitcoin, whole life, just savings accounts, penny stocks, timing the market, panic selling, student loans out the yin yang, etc). I hear it every single day. They are not going to DIY index funds. Ever. If people are willing and able to come to BH and truly learn how to DIY invest that's great. That's not most people. And it's not something I would recommend to most people I know because I know they wouldn't do it. I don't think the DR plan would work without the advisor part. It's a fact of life for the average person who don't have a clue about investing. And the fact that DR proposes active funds is basically mainstream opinion in the financial industry.

[willthrill81]

Fees should not be thought of in vacuum. Instead should look at actual fund performance because fund performance is after fees.

But fees have been robustly shown to not lead to higher returns. The inverse has actually been true.

As Bogle correctly pointed out, in the investment world, you get what you don't pay for.

The investor paying 2% in combined AUM fees, front-end loads, and expense ratios is going to be 1.9% behind the investor paying .1% in expense ratios and nothing else.

Vanguard is very pro active fund. The question is can the fund manager overcome the fees with performance.

Loads, AUM, or fixed fee is how you pay your advisor. This should be a separate discussion than expense ratios. There are good advisors out there (Rick Ferri for example) and they don't work for free. Their time, advise, planning, tax advice, etc whatever they are doing costs and it costs a lot.

I agree that a lot of this comes down to whether an investor is DIY or wants their hand held. But there's no disputing the pure math that says that the latter is going to cost investors, probably a lot, over their lifetime. If it keeps them from panic selling and on track, then maybe it's worth it.

I wish I understood why you're so pro-Ramsey. You seem to be very quick to defend everything that he says, even when the math isn't on his side.

First, I love his podcast and style regardless whether I agree with everything he says. BH is full of all different types of financial philosophies - just look at the strategy of using 3x leveraged ETFs, value tilts, etc. Many strategies that are not low cost. Many use advisors. Many are anti debt. Yet DR gets called a scam, salesman, etc mostly by people who are ignorant and haven't listen to the show.

Overall I think his plan is genius, so simple that I would recommend it in entirety to most people (the baby steps, term life only, don't be house poor, no debt, etc). Most of my friends, colleagues, and family would be far better off to follow his entire plan than to do their half baked plans, mostly financial disasters like most Anericans. I do not believe that most people are willing or capable to DIY without doing stupid stuff (bitcoin, whole life, just savings accounts, penny stocks, timing the market, panic selling, student loans out the yin yang, etc). I hear it every single day. They are not going to DIY index funds. Ever. If people are willing and able to come to BH and truly learn how to DIY invest that's great. That's not most people. And it's not something I would recommend to most people I know because I know they wouldn't do it. I don't think the DR plan would work without the advisor part. It's a fact of life for the average person who don't have a clue about investing. And the fact that DR proposes active funds is basically mainstream opinion in the financial industry.

Thanks for the clarification.

Personally, I'm of the view that most folks out there should just save at least 15% of their gross income and invest it into a low-cost, preferably indexed, target-date fund and call it a day. It doesn't get much easier than that. But sadly, those aren't always available in employer-sponsored retirement programs.

[17outs]

Thanks for the clarification.

Personally, I'm of the view that most folks out there should just save at least 15% of their gross income and invest it into a low-cost, preferably indexed, target-date fund and call it a day. It doesn't get much easier than that. But sadly, those aren't always available in employer-sponsored retirement programs.

The reason they can't do this is because they are in debt up to their eyeballs trying to keep up with the Joneses leasing new cars every 2 years with 300k of student loans and credit card debt. This is where they could take a solid dose of DR to change their behavior.

After they get out of debt, I agree with you 1000%. Live within your means, save at least 15% and invest in a TDF.

[jajlrajrf]

For those who did stay the course, always keep their fees low, and are consistent with their Boglehead portfolio contributions and AA - kudos! It appears due to the volume of non-Boglehead behavior on the Boglehead.org forums, that there might be more instructive criticism that could take place right here at the home message forums rather than directing it at DR and his followers.

No, this is absolutely wrong.

There is a world of difference between "I, an investor, decided to do something that did not comform with (Boglehead, Factor Investing, Sideshow Bob's Sure-Fire Investing Plan) and it was somehow objectively wrong" and "I, a dude with a platform getting paid to give advice to other people about how they spend their money, gave objectively wrong advice", and it's totally cool to call out the latter in a way you wouldn't call out the former.

[Helo80]

No, this is absolutely wrong.

There is a world of difference between "I, an investor, decided to do something that did not comform with (Boglehead, Factor Investing, Sideshow Bob's Sure-Fire Investing Plan) and it was somehow objectively wrong" and "I, a dude with a platform getting paid to give advice to other people about how they spend their money, gave objectively wrong advice", and it's totally cool to call out the latter in a way you wouldn't call out the former.

I'm pretty sure that there is some element of jealousy that Dave has capitalized on what BHs post and discuss for free. Like I said earlier, I think that White Coat Investor is the only one that regularly posts here that has done something similar to Dave (albeit on a smaller scale).

Maybe White Coat Investor could shine some light on all the financial incentives and kickback games within healthcare. I'm sure that would be a good discussion.

[hornet96]

For those who did stay the course, always keep their fees low, and are consistent with their Boglehead portfolio contributions and AA - kudos! It appears due to the volume of non-Boglehead behavior on the Boglehead.org forums, that there might be more instructive criticism that could take place right here at the home message forums rather than directing it at DR and his followers.

No, this is absolutely wrong.

There is a world of difference between "I, an investor, decided to do something that did not comform with (Boglehead, Factor Investing, Sideshow Bob's Sure-Fire Investing Plan) and it was somehow objectively wrong" and "I, a dude with a platform getting paid to give advice to other people about how they spend their money, gave objectively wrong advice", and it's totally cool to call out the latter in a way you wouldn't call out the former.

This, exactly. This post should be a sticky for all Dave Ramsey threads from now on. All of the counterarguments in support of Dave's objectively flawed investment advice amount to nothing more than "whataboutism."

[02nz]

I'm pretty sure that there is some element of jealousy that Dave has capitalized on what BHs post and discuss for free. Like I said earlier, I think that White Coat Investor is the only one that regularly posts here that has done something similar to Dave (albeit on a smaller scale).

I can't speak to other people's motives and wish you wouldn't either, as you've provided no evidence of such. I can say for myself: I have no jealousy for Dave Ramsey or anyone else's financial success. I support helping people get out of debt. I do have a problem with his peddling crappy products and using misleading information (like 12% average annual returns) and failing to clearly disclose his own financial inventive for doing so.

[Helo80]

For those who did stay the course, always keep their fees low, and are consistent with their Boglehead portfolio contributions and AA - kudos! It appears due to the volume of non-Boglehead behavior on the Boglehead.org forums, that there might be more instructive criticism that could take place right here at the home message forums rather than directing it at DR and his followers.

No, this is absolutely wrong.

There is a world of difference between "I, an investor, decided to do something that did not comform with (Boglehead, Factor Investing, Sideshow Bob's Sure-Fire Investing Plan) and it was somehow objectively wrong" and "I, a dude with a platform getting paid to give advice to other people about how they spend their money, gave objectively wrong advice", and it's totally cool to call out the latter in a way you wouldn't call out the former.

This, exactly. This post should be a sticky for all Dave Ramsey threads from now on. All of the counterarguments in support of Dave's objectively flawed investment advice amount to nothing more than "whataboutism."

Not every one wants to manage their own investments.

[Helo80]

I'm pretty sure that there is some element of jealousy that Dave has capitalized on what BHs post and discuss for free. Like I said earlier, I think that White Coat Investor is the only one that regularly posts here that has done something similar to Dave (albeit on a smaller scale).

I can't speak to other people's motives and wish you wouldn't either, as you've provided no evidence of such. I can say for myself: I have no jealousy for Dave Ramsey or anyone else's financial success. I support helping people get out of debt. I do have a problem with his peddling crappy products and using misleading information (like 12% average annual returns) and failing to clearly disclose his own financial inventive for doing so.

https://slickdeals.net/f/14101220-lenov ... ipping?v=1

Where was the kickback there?

[hornet96]

For those who did stay the course, always keep their fees low, and are consistent with their Boglehead portfolio contributions and AA - kudos! It appears due to the volume of non-Boglehead behavior on the Boglehead.org forums, that there might be more instructive criticism that could take place right here at the home message forums rather than directing it at DR and his followers.

No, this is absolutely wrong.

There is a world of difference between "I, an investor, decided to do something that did not comform with (Boglehead, Factor Investing, Sideshow Bob's Sure-Fire Investing Plan) and it was somehow objectively wrong" and "I, a dude with a platform getting paid to give advice to other people about how they spend their money, gave objectively wrong advice", and it's totally cool to call out the latter in a way you wouldn't call out the former.

This, exactly. This post should be a sticky for all Dave Ramsey threads from now on. All of the counterarguments in support of Dave's objectively flawed investment advice amount to nothing more than "whataboutism."

Not every one wants to manage their own investments.

Not everyone needs to pay unnecessarily high fees to have their investments managed for them. That is really the whole point of all of these threads.

[Nate79]

I'm pretty sure that there is some element of jealousy that Dave has capitalized on what BHs post and discuss for free. Like I said earlier, I think that White Coat Investor is the only one that regularly posts here that has done something similar to Dave (albeit on a smaller scale).

I can't speak to other people's motives and wish you wouldn't either, as you've provided no evidence of such. I can say for myself: I have no jealousy for Dave Ramsey or anyone else's financial success. I support helping people get out of debt. I do have a problem with his peddling crappy products and using misleading information (like 12% average annual returns) and failing to clearly disclose his own financial inventive for doing so.

I'm sorry but DR repeatedly disclosed how the Smartvestor pro is financially linked to the DR company. The incentive is that the advisors pay to join the network and there is no kickback per investor or any other financial link. It is not said every single time but it is repeatedly repeatedly mentioned.

[Helo80]

I'm pretty sure that there is some element of jealousy that Dave has capitalized on what BHs post and discuss for free. Like I said earlier, I think that White Coat Investor is the only one that regularly posts here that has done something similar to Dave (albeit on a smaller scale).

I can't speak to other people's motives and wish you wouldn't either, as you've provided no evidence of such. I can say for myself: I have no jealousy for Dave Ramsey or anyone else's financial success. I support helping people get out of debt. I do have a problem with his peddling crappy products and using misleading information (like 12% average annual returns) and failing to clearly disclose his own financial inventive for doing so.

I'm sorry but DR repeatedly disclosed how the Smartvestor pro is financially linked to the DR company. The incentive is that the advisors pay to join the network and there is no kickback per investor or any other financial link. It is not said every single time but it is repeatedly repeatedly mentioned.

I'm sure on all the documents you sign when you sign up for the Smartvestor service affirms that.... that there is a financial relationship between Ramsey solutions and the ELP.

[Nate79]

I'm pretty sure that there is some element of jealousy that Dave has capitalized on what BHs post and discuss for free. Like I said earlier, I think that White Coat Investor is the only one that regularly posts here that has done something similar to Dave (albeit on a smaller scale).

I can't speak to other people's motives and wish you wouldn't either, as you've provided no evidence of such. I can say for myself: I have no jealousy for Dave Ramsey or anyone else's financial success. I support helping people get out of debt. I do have a problem with his peddling crappy products and using misleading information (like 12% average annual returns) and failing to clearly disclose his own financial inventive for doing so.

I'm sorry but DR repeatedly disclosed how the Smartvestor pro is financially linked to the DR company. The incentive is that the advisors pay to join the network and there is no kickback per investor or any other financial link. It is not said every single time but it is repeatedly repeatedly mentioned.

I'm sure on all the documents you sign when you sign up for the Smartvestor service affirms that.... that there is a financial relationship between Ramsey solutions and the ELP.

I have no idea if it is in the papers that people sign. What I was referring was that it is repeated repeated repeated on the radio/podcast show. It is not hidden. And when posters say such it is at best dishonest.

[Helo80]

I have no idea if it is in the papers that people sign. What I was referring was that it is repeated repeated repeated on the radio/podcast show. It is not hidden. And when posters say such it is at best dishonest.

Yeah, IDK either for sure as obviously I and you can manage our own money. But, it does drive me nuts that people here are unable to understand that there is a place for CFPs and there is a place for AUM and there is a place for AMFs.

And yes, I do listen to Dave's podcast b/c it's free on Alexa and he does mention incentives for Ramsey Solutions.

[hornet96]

I have no idea if it is in the papers that people sign. What I was referring was that it is repeated repeated repeated on the radio/podcast show. It is not hidden. And when posters say such it is at best dishonest.

And his listeners, who have been described as "trainwrecks," "hopelessly financially illiterate," etc., are somehow able to fully comprehend those quick radio disclosures about financial incentives and potential conflicts of interests. Interesting.

[CyclingDuo]

For those who did stay the course, always keep their fees low, and are consistent with their Boglehead portfolio contributions and AA - kudos! It appears due to the volume of non-Boglehead behavior on the Boglehead.org forums, that there might be more instructive criticism that could take place right here at the home message forums rather than directing it at DR and his followers.

No, this is absolutely wrong.

There is a world of difference between "I, an investor, decided to do something that did not comform with (Boglehead, Factor Investing, Sideshow Bob's Sure-Fire Investing Plan) and it was somehow objectively wrong" and "I, a dude with a platform getting paid to give advice to other people about how they spend their money, gave objectively wrong advice", and it's totally cool to call out the latter in a way you wouldn't call out the former.

The point being, it's not all perfect here in Boglehead land either.

Last I checked, listening or calling into the Ramsey show or podcast is a totally free service to the listeners. There is no obligation for any listener to pay for anything or follow any of his advice no matter how many advertisements are run or mentioned throughout each of his shows.

Likewise, there is no obligation for any Boglehead forum member to purchase any of the material at the Amazon.com link above, or to follow the advice posted here on the forums.

I've listened to Ramsey of recent (last two years) due to all the negativity people post which always makes things more intriguing for me to go and check it out to see what all the fuss is about or not about.

In addition, I had time on my hands and took advantage of their book sale to read his Total Money Makeover book and Hogan's Everyday Millionaire book (as well as the White Paper .pdf for the book). At least the one consistent message Ramsey and Hogan were saying every day during the market selloff was not to sell as things were on sale. Due to Covid19 and working from home, I actually had time to listen to a lot of their shows (maybe 2 or 3 a week) compared to my normal routine where I rarely get a chance outside of the commute in the car to and from work. He's certainly an acquired taste that may or may not resonate with everyone which is fine. Ditto on many others we could name. JL Collins, Ben Felix, The Millionaire Teacher, The White Coat Investor, Jonathan Clements, Alan Roth, Suze Orman, Larry Swedroe, David Bach, Wade Pfau, Michael Kitces, Bill Bernstein, and on and on.

For those of us who have read much of the Boglehead material, viewed many of the videos from the Boglehead conferences, participated on the forums, been through bear markets before - it was rather startling to see how quickly unwrapped things got in many threads and endless posts which leads me to believe, there may have been a lot more going on behind the scenes that did not get posted if that many were brave enough to post up what they were doing via selling. Jason Zweig's work would most likely confirm this. Perhaps, perhaps not startling for many who have seen it all before.

Regardless of how we all feel, it always becomes a total thrashing when Ramsey's name gets mentioned.

Pick a strategy and stick with it. Contribute on a regular basis throughout your working career. Retire and enjoy your retirement.

One does not have to walk into a Morgan Stanley, DFA, Wells Fargo, Edward Jones, Fidelity, TIAA, Charles Schwab, Ameriprise or whatever AUM shop and sign up and pay for the advice or the funds with higher expense ratios just because it is presented to them - no matter who the presenter is. Yet it happens. Daily.

CyclingDuo

[Helo80]

I have no idea if it is in the papers that people sign. What I was referring was that it is repeated repeated repeated on the radio/podcast show. It is not hidden. And when posters say such it is at best dishonest.

And his listeners, who have been described as "trainwrecks," "hopelessly financially illiterate," etc., are somehow able to fully comprehend those quick radio disclosures about financial incentives and potential conflicts of interests. Interesting.

Sounds to me like you're carving out a good business niche to compete with DR and provide a 3-fund portfolio solution.

[Cam894]

It is quite fascinating to watch the Dave Ramsey defenders come into these threads and shout his virtues from the mountaintop about helping "train wrecks" of people who don't have the aptitude to understand basic personal finance, and then ignore the intellectual problems with his obvious monetization of those same know-nothing "train wrecks" once they've seen the light that somehow "only he" (his brand) was able to show them.

The issue that I and many BH's have is that If he was truly 100% about helping these "train wrecks" from end-to-end, then he wouldn't go out of his way to bash index investing and misrepresent the data presented to his congregation, which only serves his own interests. This self-dealing is never in good faith disclosed to his followers, and they are instead led to believe that the proponents of index investing are "stupid" and that it's "easy" to pick outperforming active funds just by looking at returns. He literally says this and provides many intellectually dishonest arguments in order to frame his detractors in a negative light as a play on the "train wreck's" emotions. This "business strategy" keeps his customers loyal to his brand.

You are absolutely correct. I will add however that if you listen to some of his “train wreck” followers it becomes quite clear that they probably don’t have the financial and emotional capacity to stay the course with a 3-4 fund allocation. This is where a money manager brings value.

I find the average boglehead to be educated and business savvy. This is not necessarily reflective of the majority of people. If you rack up 60k in credit card debt you probably are the same type to engage in market timing and panic selling.

For some people “good enough” is fantastic. Better to have a bunch of American funds and fees than 300k debt.

[02nz]

I'm pretty sure that there is some element of jealousy that Dave has capitalized on what BHs post and discuss for free. Like I said earlier, I think that White Coat Investor is the only one that regularly posts here that has done something similar to Dave (albeit on a smaller scale).

I can't speak to other people's motives and wish you wouldn't either, as you've provided no evidence of such. I can say for myself: I have no jealousy for Dave Ramsey or anyone else's financial success. I support helping people get out of debt. I do have a problem with his peddling crappy products and using misleading information (like 12% average annual returns) and failing to clearly disclose his own financial inventive for doing so.

https://slickdeals.net/f/14101220-lenov ... ipping?v=1

Where was the kickback there?

Yes I posted that deal (and bought it myself, because it's a good price for something I needed). No I didn't receive a cent. In fact I specifically advised people to go through a cashback portal, which meant Slickdeals woudln't make any money off those purchases.

And what does this have to do with anything?

[Helo80]

And what does this have to do with anything?

Is SD always upfront about the click-through revenue on that site? No, but if you dig deep, they'll acknowledge, and I think it is disclosed somewhere in the fine print. Is it always discussed in every SD? Largely, no. And sure, people talk around the forum filters on ebates, Mr. Rebates and like sites.

BLUF -- there are kickbacks in business. They're not always discussed. Deal with it.

[02nz]

But fees have been robustly shown to not lead to higher returns. The inverse has actually been true.

As Bogle correctly pointed out, in the investment world, you get what you don't pay for.

The investor paying 2% in combined AUM fees, front-end loads, and expense ratios is going to be 1.9% behind the investor paying .1% in expense ratios and nothing else.

Vanguard is very pro active fund. The question is can the fund manager overcome the fees with performance.

Loads, AUM, or fixed fee is how you pay your advisor. This should be a separate discussion than expense ratios. There are good advisors out there (Rick Ferri for example) and they don't work for free. Their time, advise, planning, tax advice, etc whatever they are doing costs and it costs a lot.

I agree that a lot of this comes down to whether an investor is DIY or wants their hand held. But there's no disputing the pure math that says that the latter is going to cost investors, probably a lot, over their lifetime. If it keeps them from panic selling and on track, then maybe it's worth it.

I wish I understood why you're so pro-Ramsey. You seem to be very quick to defend everything that he says, even when the math isn't on his side.

First, I love his podcast and style regardless whether I agree with everything he says. BH is full of all different types of financial philosophies - just look at the strategy of using 3x leveraged ETFs, value tilts, etc. Many strategies that are not low cost. Many use advisors. Many are anti debt. Yet DR gets called a scam, salesman, etc mostly by people who are ignorant and haven't listen to the show.

Overall I think his plan is genius, so simple that I would recommend it in entirety to most people (the baby steps, term life only, don't be house poor, no debt, etc). Most of my friends, colleagues, and family would be far better off to follow his entire plan than to do their half baked plans, mostly financial disasters like most Anericans. I do not believe that most people are willing or capable to DIY without doing stupid stuff (bitcoin, whole life, just savings accounts, penny stocks, timing the market, panic selling, student loans out the yin yang, etc). I hear it every single day. They are not going to DIY index funds. Ever. If people are willing and able to come to BH and truly learn how to DIY invest that's great. That's not most people. And it's not something I would recommend to most people I know because I know they wouldn't do it. I don't think the DR plan would work without the advisor part. It's a fact of life for the average person who don't have a clue about investing. And the fact that DR proposes active funds is basically mainstream opinion in the financial industry.

Thanks for the clarification.

Personally, I'm of the view that most folks out there should just save at least 15% of their gross income and invest it into a low-cost, preferably indexed, target-date fund and call it a day. It doesn't get much easier than that. But sadly, those aren't always available in employer-sponsored retirement programs.

+1, and neither of those things requires even reading this forum. Setting a good saving rate means living below your means. And with many employer pans defaulting to a target-date fund matching the employee's anticipated retirement date, the employee doesn't even have to do anything to choose or manage investments. I'm sure lots of people have implemented those without ever hearing of this site. The DR apologists here are using strawman arguments and whataboutism, making it sound like it's a choice between taking DR's investing advice or having to reach some level of Bogleheads knowledge before you can invest on your own. SMH

[hornet96]

I will add however that if you listen to some of his “train wreck” followers it becomes quite clear that they probably don’t have the financial and emotional capacity to stay the course with a 3-4 fund allocation. This is where a money manager brings value.

Certainly, and I would reiterate that one doesn't have to accept DR's investing philosophy and ELP network in order to accept the realities that some (many) people may be better off with an investment advisor. That investment advisory service can be had for much cheaper (Vanguard PAS, Schwab Robo invest, etc.) with the same if not better expected results.

[Helo80]

I will add however that if you listen to some of his “train wreck” followers it becomes quite clear that they probably don’t have the financial and emotional capacity to stay the course with a 3-4 fund allocation. This is where a money manager brings value.

Certainly, and I would reiterate that one doesn't have to accept DR's investing philosophy and ELP network in order to accept the realities that some (many) people may be better off with an investment advisor. That investment advisory service can be had for much cheaper (Vanguard PAS, Schwab Robo invest, etc.) with the same if not better expected results.

How would you suggest that we evangelize DR listeners from the 4-fund, actively managed funds Dave recommendations with his ELPs, to a 3-fund, BH style fund? How would you approach a family member, friend, or co-worker?

[02nz]

I will add however that if you listen to some of his “train wreck” followers it becomes quite clear that they probably don’t have the financial and emotional capacity to stay the course with a 3-4 fund allocation. This is where a money manager brings value.

Certainly, and I would reiterate that one doesn't have to accept DR's investing philosophy and ELP network in order to accept the realities that some (many) people may be better off with an investment advisor. That investment advisory service can be had for much cheaper (Vanguard PAS, Schwab Robo invest, etc.) with the same if not better expected results.

How would you suggest that we evangelize DR listeners from the 4-fund, actively managed funds Dave recommendations with his ELPs, to a 3-fund, BH style fund? How would you approach a family member, friend, or co-worker?

"So, you're planning to retire around 2040? Let's see, your employer's 401k offers Vanguard Target Retirement 2040 fund. That's a good choice. Oh, you have a Roth IRA at Vanguard, too? You can go with the same fund for that."

Estimated time for the whole conversation, including time to pull up list of available funds: 2-5 minutes. Notice, no mention of reading through threads about trend-following, small-cap value tilt, international vs domestic, or anything else at this site.

[jajlrajrf]

For those who did stay the course, always keep their fees low, and are consistent with their Boglehead portfolio contributions and AA - kudos! It appears due to the volume of non-Boglehead behavior on the Boglehead.org forums, that there might be more instructive criticism that could take place right here at the home message forums rather than directing it at DR and his followers.

No, this is absolutely wrong.

There is a world of difference between "I, an investor, decided to do something that did not comform with (Boglehead, Factor Investing, Sideshow Bob's Sure-Fire Investing Plan) and it was somehow objectively wrong" and "I, a dude with a platform getting paid to give advice to other people about how they spend their money, gave objectively wrong advice", and it's totally cool to call out the latter in a way you wouldn't call out the former.

This, exactly. This post should be a sticky for all Dave Ramsey threads from now on. All of the counterarguments in support of Dave's objectively flawed investment advice amount to nothing more than "whataboutism."

Not every one wants to manage their own investments.

This is a non-sequitur.

I'm just saying that someone who is profiting off of giving financial advice owes a higher duty of care (and thus totally should be subject to a higher level of criticism) than "random internet forum posters."

If hypothetically John Bogle was still alive and someone made the argument "Hey, man, John Bogle should be subject to the same standards as Dave Ramsey!" I'd say...."Yeah? Probably? Sure, that makes sense." But saying that we can't criticize Ramsey because we're not also criticizing random internet forum posters is pants-on-head stuff.

[Cam894]

I will add however that if you listen to some of his “train wreck” followers it becomes quite clear that they probably don’t have the financial and emotional capacity to stay the course with a 3-4 fund allocation. This is where a money manager brings value.

Certainly, and I would reiterate that one doesn't have to accept DR's investing philosophy and ELP network in order to accept the realities that some (many) people may be better off with an investment advisor. That investment advisory service can be had for much cheaper (Vanguard PAS, Schwab Robo invest, etc.) with the same if not better expected results.

Absolutely. It is my belief that most people outgrow him early on in their financial life anyway.

[willthrill81]

I will add however that if you listen to some of his “train wreck” followers it becomes quite clear that they probably don’t have the financial and emotional capacity to stay the course with a 3-4 fund allocation. This is where a money manager brings value.

Certainly, and I would reiterate that one doesn't have to accept DR's investing philosophy and ELP network in order to accept the realities that some (many) people may be better off with an investment advisor. That investment advisory service can be had for much cheaper (Vanguard PAS, Schwab Robo invest, etc.) with the same if not better expected results.

Absolutely. It is my belief that most people outgrow him early on in their financial life anyway.

We can certainly hope so. But I'm afraid that many believe him when he says that they cannot do it on their own.

[02nz]

I will add however that if you listen to some of his “train wreck” followers it becomes quite clear that they probably don’t have the financial and emotional capacity to stay the course with a 3-4 fund allocation. This is where a money manager brings value.

Certainly, and I would reiterate that one doesn't have to accept DR's investing philosophy and ELP network in order to accept the realities that some (many) people may be better off with an investment advisor. That investment advisory service can be had for much cheaper (Vanguard PAS, Schwab Robo invest, etc.) with the same if not better expected results.

Absolutely. It is my belief that most people outgrow him early on in their financial life anyway.

We can certainly hope so. But I'm afraid that many believe him when he says that they cannot do it on their own.

Which is ironic, because getting out of debt, where DR clearly has good value, calls for far more effort and maybe even hand-holding, than investing for retirement, where most people are probably better off the less effort they expend on it.

[willthrill81]

I will add however that if you listen to some of his “train wreck” followers it becomes quite clear that they probably don’t have the financial and emotional capacity to stay the course with a 3-4 fund allocation. This is where a money manager brings value.

Certainly, and I would reiterate that one doesn't have to accept DR's investing philosophy and ELP network in order to accept the realities that some (many) people may be better off with an investment advisor. That investment advisory service can be had for much cheaper (Vanguard PAS, Schwab Robo invest, etc.) with the same if not better expected results.

Absolutely. It is my belief that most people outgrow him early on in their financial life anyway.

We can certainly hope so. But I'm afraid that many believe him when he says that they cannot do it on their own.

Which is ironic, because getting out of debt, where DR clearly has good value, calls for far more effort and maybe even hand-holding, than investing for retirement, where most people are probably better off the less effort they expend on it.

Yes, it's extremely ironic. The interest on consumer debt that many of his callers are currently paying would in many cases be enough for them to retire comfortably (in conjunction with SS benefits) on if they just paid off the debt and then saved the interest they were paying into a TDF.

[Nate79]

I will add however that if you listen to some of his “train wreck” followers it becomes quite clear that they probably don’t have the financial and emotional capacity to stay the course with a 3-4 fund allocation. This is where a money manager brings value.

Certainly, and I would reiterate that one doesn't have to accept DR's investing philosophy and ELP network in order to accept the realities that some (many) people may be better off with an investment advisor. That investment advisory service can be had for much cheaper (Vanguard PAS, Schwab Robo invest, etc.) with the same if not better expected results.

Absolutely. It is my belief that most people outgrow him early on in their financial life anyway.

We can certainly hope so. But I'm afraid that many believe him when he says that they cannot do it on their own.

Which is ironic, because getting out of debt, where DR clearly has good value, calls for far more effort and maybe even hand-holding, than investing for retirement, where most people are probably better off the less effort they expend on it.

I could give you a bus load of hundred people I know who any type of investing makes their eyes glaze over as well as so many investing mistakes it would make you sick (I mentioned in a post above).

[hornet96]

I will add however that if you listen to some of his “train wreck” followers it becomes quite clear that they probably don’t have the financial and emotional capacity to stay the course with a 3-4 fund allocation. This is where a money manager brings value.

Certainly, and I would reiterate that one doesn't have to accept DR's investing philosophy and ELP network in order to accept the realities that some (many) people may be better off with an investment advisor. That investment advisory service can be had for much cheaper (Vanguard PAS, Schwab Robo invest, etc.) with the same if not better expected results.

How would you suggest that we evangelize DR listeners from the 4-fund, actively managed funds Dave recommendations with his ELPs, to a 3-fund, BH style fund? How would you approach a family member, friend, or co-worker?

"So, you're planning to retire around 2040? Let's see, your employer's 401k offers Vanguard Target Retirement 2040 fund. That's a good choice. Oh, you have a Roth IRA at Vanguard, too? You can go with the same fund for that."

Estimated time for the whole conversation, including time to pull up list of available funds: 2-5 minutes. Notice, no mention of reading through threads about trend-following, small-cap value tilt, international vs domestic, or anything else at this site.

Pretty much this. If someone asks me about investing, I generally tell them to save a lot and keep it simple, automated, and cheap. I am a financial professional so most people take my advice at least semi-seriously. I expect that DR's followers take his advice even more seriously and on the faith that his advice is 100% in their best interest, which is why I have a higher expectation of him - particularly given the core demographics of his audience.

[02nz]

Certainly, and I would reiterate that one doesn't have to accept DR's investing philosophy and ELP network in order to accept the realities that some (many) people may be better off with an investment advisor. That investment advisory service can be had for much cheaper (Vanguard PAS, Schwab Robo invest, etc.) with the same if not better expected results.

Absolutely. It is my belief that most people outgrow him early on in their financial life anyway.

We can certainly hope so. But I'm afraid that many believe him when he says that they cannot do it on their own.

Which is ironic, because getting out of debt, where DR clearly has good value, calls for far more effort and maybe even hand-holding, than investing for retirement, where most people are probably better off the less effort they expend on it.

I could give you a bus load of hundred people I know who any type of investing makes their eyes glaze over as well as so many investing mistakes it would make you sick (I mentioned in a post above).

Take a megaphone, go into that bus, and try this: viewtopic.php?p=5305541#p5305471

[Cam894]

I will add however that if you listen to some of his “train wreck” followers it becomes quite clear that they probably don’t have the financial and emotional capacity to stay the course with a 3-4 fund allocation. This is where a money manager brings value.

Certainly, and I would reiterate that one doesn't have to accept DR's investing philosophy and ELP network in order to accept the realities that some (many) people may be better off with an investment advisor. That investment advisory service can be had for much cheaper (Vanguard PAS, Schwab Robo invest, etc.) with the same if not better expected results.

Absolutely. It is my belief that most people outgrow him early on in their financial life anyway.

We can certainly hope so. But I'm afraid that many believe him when he says that they cannot do it on their own.

Many will be inclined to believe the person who saved them from financial ruin. But some will wise up.

I could care less if people go with an active fund. Keeps the market smart.

[willthrill81]

I will add however that if you listen to some of his “train wreck” followers it becomes quite clear that they probably don’t have the financial and emotional capacity to stay the course with a 3-4 fund allocation. This is where a money manager brings value.

Certainly, and I would reiterate that one doesn't have to accept DR's investing philosophy and ELP network in order to accept the realities that some (many) people may be better off with an investment advisor. That investment advisory service can be had for much cheaper (Vanguard PAS, Schwab Robo invest, etc.) with the same if not better expected results.

Absolutely. It is my belief that most people outgrow him early on in their financial life anyway.

We can certainly hope so. But I'm afraid that many believe him when he says that they cannot do it on their own.

Many will be inclined to believe the person who saved them from financial ruin. But some will wise up.

I could care less if people go with an active fund. Keeps the market smart.

The passive vs. active issue is actually pretty far down the list in terms of its impact on one's finances. One's saving rate is probably most important, followed by one's AA.

[LadyGeek]

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