The Dave Ramsey Stock Portfolio: Done Boglehead Style?

[secondopinion]

I know some here really do not like Dave Ramsey's advice on investing; I do not care much about it either (other than the part about aggressively saving).

However, I was curious about what is portfolio really meant with "Growth and Income", "Growth", "Aggressive Growth" and "International". I found that he advocates a 100% stock portfolio with 25% each in large-cap US, mid-cap US, small-cap US, and international respectively.
(See https://www.ramseysolutions.com/retirem ... sification)

Learning this, I thought I would take a twist on it. I used index ETFs from Vanguard. I did three versions benchmarked against VT (global stocks): 25% of each of the S&P classes (500, 400, 600) with VXUS (international), 25% of each of the CRSP index classes (70%, 85%, 98%) with VXUS, and just VTI (total US market) at 75% with VXUS. In short, it is a small factor US tilt.

https://www.portfoliovisualizer.com/bac ... tion8_3=75

Thoughts on this? It might be more reasonable if done this way (if you want 100% stocks, that is).

[dukeblue219]

Make sure you also pay a big fee to a certified financial planner so you get the full Dave Ramsey experience. That's the only way to unlock those 12% annual gains in mutual funds!

/s

[secondopinion]

Make sure you also pay a big fee to a certified financial planner so you get the full Dave Ramsey experience. That's the only way to unlock those 12% annual gains in mutual funds!

/s

Right... But my point is that we can have the "Dave Ramsey experience" the "Boglehead" way.

[welderwannabe]

I love Dave. I do. I just don't get his investment advice, especially his bond hatred. However, as I've told others he believes in a heavy investment real estate twist. If you do rental real estate you pay a lot of $$$ up front to buy something that pays you a predictable cash flow every month. Sounds like a bond, doesn't it?

If you are trying to do his thing with ETF, the first solution makes the most sense to me.

[bloom2708]

Growth and Income could be something like Lifestrategy 80/20 or 60/40.

Growth could be S&P 500 or Total US.

Aggressive Growth could be Small Cap Value or Extended Market (Mid and Small)

International could be Total International or a mix of Developed and Emerging.

I never liked how Dave lays out his investing strategy. I guess it leaves room for "personal" choices.

I do think you can fit a Boglehead approach into his buckets.

[welderwannabe]

Growth and Income could be something like Lifestrategy 80/20 or 60/40.

Doubt it, he hates bonds of any type and would never recommend Lifestrategy, as its loaded with fixed income.

In his mind an income fund is a stock fund that I used to know was an 'equity income fund', one that invests in dividend paying companies such as VEIPX Vanguard Equity Income Fund.

[secondopinion]

Growth and Income could be something like Lifestrategy 80/20 or 60/40.

Growth could be S&P 500 or Total US.

Aggressive Growth could be Small Cap Value or Extended Market (Mid and Small)

International could be Total International or a mix of Developed and Emerging.

I never liked how Dave lays out his investing strategy. I guess it leaves room for "personal" choices.

I do think you can fit a Boglehead approach into his buckets.

In the article, it is all stocks. The divisions are poorly named but are really just to divide the market capitalization.

[Makefile]

However, I was curious about what is portfolio really meant with "Growth and Income", "Growth", "Aggressive Growth" and "International". I found that he advocates a 100% stock portfolio with 25% each in large-cap US, mid-cap US, small-cap US, and international respectively.
(See https://www.ramseysolutions.com/retirem ... sification)

There is good suspicion that Growth and Income is Investment Co. of America, and Growth is Growth Fund of America, both American Funds.
The former is 11.87% returns since inception; the latter is 13.04% returns since inception--this is where his 12% thing comes from, for better or worse.

[David Jay]

Boglehead portfolio design normally starts with your asset allocation (AA), which we teach is the primary "control knob" for potential growth versus stability. This is set based on one's need, ability and willingness to take risk.

Where do you see this step in any Ramsey portfolio description? You don't. So in my opinion the Ramsey approach gets off on the wrong foot out of the box by going 100% stocks before dealing with the behavioral aspects of portfolio development. One should not even be considering which stocks to hold until one's AA is determined.

[secondopinion]

I love Dave. I do. I just don't get his investment advice, especially his bond hatred. However, as I've told others he believes in a heavy investment real estate twist. If you do rental real estate you pay a lot of $$$ up front to buy something that pays you a predictable cash flow every month. Sounds like a bond, doesn't it?

I think we had a thread on this real estate/bond equation that is not true. I am against unleveraged real estate (besides one's house) in general. If one is going into that business, it needs to be profitable enough for the time spent.

[secondopinion]

Boglehead portfolio design normally starts with your asset allocation (AA), which we teach is the primary "control knob" for potential growth versus stability. This is set based on one's need, ability and willingness to take risk.

Where do you see this step in any Ramsey portfolio description? You don't. So in my opinion the Ramsey approach gets off on the wrong foot out of the box by going 100% stocks before dealing with the behavioral aspects of portfolio development. One should not even be considering which stocks to hold until one's AA is determined.

Right. The article is not that helpful; I am merely adapting the recommendations into something that is reasonable for the 100% stock Boglehead crowd

[welderwannabe]

I think we had a thread on this real estate/bond equation that is not true. I am against unleveraged real estate (besides one's house) in general. If one is going into that business, it needs to be profitable enough for the time spent.

Thats fine, you can be against it. However, this thread is about Dave Ramsey, and he is pro unleveraged real estate.

[Makefile]

Boglehead portfolio design normally starts with your asset allocation (AA), which we teach is the primary "control knob" for potential growth versus stability. This is set based on one's need, ability and willingness to take risk.

Where do you see this step in any Ramsey portfolio description? You don't. So in my opinion the Ramsey approach gets off on the wrong foot out of the box by going 100% stocks before dealing with the behavioral aspects of portfolio development. One should not even be considering which stocks to hold until one's AA is determined.

Yes, but then the next point in any Ramsey thread is to consider his target audience, which is unlikely to be able to accurately judge such things, since (medical debt and other such catastrophes aside) if they were good at making judgments of personal finance matters they wouldn't be in mountains of consumer debt.

Are 401(k) qualified default investment alternatives (target date funds) not guilty of the same thing? Of putting you in 90% stocks just because your age is under a threshold. It's better than the prior default of 100% money market if a participant fails to pick investments, no?

[Triple digit golfer]

Good growth stock mutual funds.

[bloom2708]

Growth and Income could be something like Lifestrategy 80/20 or 60/40.

Doubt it, he hates bonds of any type and would never recommend Lifestrategy, as its loaded with fixed income.

In his mind an income fund is a stock fund that I used to know was an 'equity income fund', one that invests in dividend paying companies such as VEIPX Vanguard Equity Income Fund.

What is the "Income" of Growth and Income? I know Dave hates bonds, but took some liberties.

[Makefile]

Growth and Income could be something like Lifestrategy 80/20 or 60/40.

Doubt it, he hates bonds of any type and would never recommend Lifestrategy, as its loaded with fixed income.

In his mind an income fund is a stock fund that I used to know was an 'equity income fund', one that invests in dividend paying companies such as VEIPX Vanguard Equity Income Fund.

What is the "Income" of Growth and Income? I know Dave hates bonds, but took some liberties.

Though we enjoy the idea of "Growth" vs. "Growth and Income" vs. "Aggressive Growth" it isn't something he made up and I've actually become a bit curious where those terms originate. I once had an ADP 401(k) that grouped all the funds under those Ramsey-style terms. Do they come from FINRA? SEC? Investment Co Institute?

[Mike Scott]

Why bother? Either go all in on the "Dave" thing or don't.

[secondopinion]

I think we had a thread on this real estate/bond equation that is not true. I am against unleveraged real estate (besides one's house) in general. If one is going into that business, it needs to be profitable enough for the time spent.

Thats fine, you can be against it. However, this thread is about Dave Ramsey, and he is pro unleveraged real estate.

Right, but I started the thread. The thread is about adopting Dave Ramsey's touted portfolio into the Boglehead framework. We first know what roughly what he is talking about, and second need to figure out if there is any merit done passively.

If we bring in real estate into the discussion, then I will share my opinions about it.

[UpperNwGuy]

Right... But my point is that we can have the "Dave Ramsey experience" the "Boglehead" way.

Why would anybody want to have the Dave Ramsey experience the Boglehead way?

[invest2bfree]

I know some here really do not like Dave Ramsey's advice on investing; I do not care much about it either (other than the part about aggressively saving).

However, I was curious about what is portfolio really meant with "Growth and Income", "Growth", "Aggressive Growth" and "International". I found that he advocates a 100% stock portfolio with 25% each in large-cap US, mid-cap US, small-cap US, and international respectively.
(See https://www.ramseysolutions.com/retirem ... sification)

Learning this, I thought I would take a twist on it. I used index ETFs from Vanguard. I did three versions benchmarked against VT (global stocks): 25% of each of the S&P classes (500, 400, 600) with VXUS (international), 25% of each of the CRSP index classes (70%, 85%, 98%) with VXUS, and just VTI (total US market) at 75% with VXUS. In short, it is a small factor US tilt.

https://www.portfoliovisualizer.com/bac ... tion8_3=75

Thoughts on this? It might be more reasonable if done this way (if you want 100% stocks, that is).

Very Simply-
25% VTI
25% VUG
25% VBR
25% VXUS
That is it, now I saved you 1% annual fee.

[secondopinion]

I know some here really do not like Dave Ramsey's advice on investing; I do not care much about it either (other than the part about aggressively saving).

However, I was curious about what is portfolio really meant with "Growth and Income", "Growth", "Aggressive Growth" and "International". I found that he advocates a 100% stock portfolio with 25% each in large-cap US, mid-cap US, small-cap US, and international respectively.
(See https://www.ramseysolutions.com/retirem ... sification)

Learning this, I thought I would take a twist on it. I used index ETFs from Vanguard. I did three versions benchmarked against VT (global stocks): 25% of each of the S&P classes (500, 400, 600) with VXUS (international), 25% of each of the CRSP index classes (70%, 85%, 98%) with VXUS, and just VTI (total US market) at 75% with VXUS. In short, it is a small factor US tilt.

https://www.portfoliovisualizer.com/bac ... tion8_3=75

Thoughts on this? It might be more reasonable if done this way (if you want 100% stocks, that is).

Very Simply-
25% VTI
25% VUG
25% VBR
25% VXUS
That is it, now I saved you 1% annual fee.

I am merely pointing out what the article stated. I usually ignore his investment advice, but I figured this line of thought of mine is too good to pass up for a discussion. I already save myself a lot of money; the vast majority of my bonds are not even in funds. But yes, thank you for reminding me how bad it can be.

[secondopinion]

Right... But my point is that we can have the "Dave Ramsey experience" the "Boglehead" way.

Why would anybody want to have the Dave Ramsey experience the Boglehead way?

I really do not know; but for those who do, then there is a way without being caught with a bunch of fees.

[nedsaid]

I know some here really do not like Dave Ramsey's advice on investing; I do not care much about it either (other than the part about aggressively saving).

However, I was curious about what is portfolio really meant with "Growth and Income", "Growth", "Aggressive Growth" and "International". I found that he advocates a 100% stock portfolio with 25% each in large-cap US, mid-cap US, small-cap US, and international respectively.
(See https://www.ramseysolutions.com/retirem ... sification)

Learning this, I thought I would take a twist on it. I used index ETFs from Vanguard. I did three versions benchmarked against VT (global stocks): 25% of each of the S&P classes (500, 400, 600) with VXUS (international), 25% of each of the CRSP index classes (70%, 85%, 98%) with VXUS, and just VTI (total US market) at 75% with VXUS. In short, it is a small factor US tilt.

https://www.portfoliovisualizer.com/bac ... tion8_3=75

Thoughts on this? It might be more reasonable if done this way (if you want 100% stocks, that is).

My best guess, and I think I am right about this, is that Dave is invested in American Funds.

So what is Dave's method? E-Z P-Z. Just invest in the funds that return 12% a year, if they don't return 12% then don't invest in them. Too bad I never thought of that. Sort of like Mark Twain saying to only buy the stocks that go up, if they don't go up then don't buy them.

[Toth]

Seems like you could dress up a lot of ham fisted ideas as being OK by fixing them in this way. Why try and give legitimacy to bad investment advice?

[CyclingDuo]

I know some here really do not like Dave Ramsey's advice on investing; I do not care much about it either (other than the part about aggressively saving).

However, I was curious about what is portfolio really meant with "Growth and Income", "Growth", "Aggressive Growth" and "International". I found that he advocates a 100% stock portfolio with 25% each in large-cap US, mid-cap US, small-cap US, and international respectively.
(See https://www.ramseysolutions.com/retirem ... sification)

Learning this, I thought I would take a twist on it. I used index ETFs from Vanguard. I did three versions benchmarked against VT (global stocks): 25% of each of the S&P classes (500, 400, 600) with VXUS (international), 25% of each of the CRSP index classes (70%, 85%, 98%) with VXUS, and just VTI (total US market) at 75% with VXUS. In short, it is a small factor US tilt.

https://www.portfoliovisualizer.com/bac ... tion8_3=75

Thoughts on this? It might be more reasonable if done this way (if you want 100% stocks, that is).

Boglehead Rob Berger did a nice YouTube cast on this:

https://youtu.be/0SN0lqh-v7g

I would just call it yet another Lazy Portfolio.
https://www.portfolioeinstein.com/235-p ... han-yours/

CyclingDuo

[welderwannabe]

What is the "Income" of Growth and Income? I know Dave hates bonds, but took some liberties.

Dividend paying stocks.

[Harmanic]

Make sure you also pay a big fee to a certified financial planner so you get the full Dave Ramsey experience. That's the only way to unlock those 12% annual gains in mutual funds!

/s

And make sure you claim social security at age 62 and invest the payments with Ramsey Solutions. The guy says something that is obvious, like pay your debt down, and save more than you earn, and then suddenly he gets a free pass on all the harm he does to his followers.

[secondopinion]

I know some here really do not like Dave Ramsey's advice on investing; I do not care much about it either (other than the part about aggressively saving).

However, I was curious about what is portfolio really meant with "Growth and Income", "Growth", "Aggressive Growth" and "International". I found that he advocates a 100% stock portfolio with 25% each in large-cap US, mid-cap US, small-cap US, and international respectively.
(See https://www.ramseysolutions.com/retirem ... sification)

Learning this, I thought I would take a twist on it. I used index ETFs from Vanguard. I did three versions benchmarked against VT (global stocks): 25% of each of the S&P classes (500, 400, 600) with VXUS (international), 25% of each of the CRSP index classes (70%, 85%, 98%) with VXUS, and just VTI (total US market) at 75% with VXUS. In short, it is a small factor US tilt.

https://www.portfoliovisualizer.com/bac ... tion8_3=75

Thoughts on this? It might be more reasonable if done this way (if you want 100% stocks, that is).

My best guess, and I think I am right about this, is that Dave is invested in American Funds.

So what is Dave's method? E-Z P-Z. Just invest in the funds that return 12% a year, if they don't return 12% then don't invest in them. Too bad I never thought of that. Sort of like Mark Twain saying to only buy the stocks that go up, if they don't go up then don't buy them.

I agree the 12% expectations are ridiculous. One might get 12% if they leverage and have income to deal with any major snags on the way, but Dave hates debt. So, then I put forward some alternatives that meet the article's discussion, have low fees, and are not reliant on managers' wit.

But it is easy just to do it indexed.

[secondopinion]

I know some here really do not like Dave Ramsey's advice on investing; I do not care much about it either (other than the part about aggressively saving).

However, I was curious about what is portfolio really meant with "Growth and Income", "Growth", "Aggressive Growth" and "International". I found that he advocates a 100% stock portfolio with 25% each in large-cap US, mid-cap US, small-cap US, and international respectively.
(See https://www.ramseysolutions.com/retirem ... sification)

Learning this, I thought I would take a twist on it. I used index ETFs from Vanguard. I did three versions benchmarked against VT (global stocks): 25% of each of the S&P classes (500, 400, 600) with VXUS (international), 25% of each of the CRSP index classes (70%, 85%, 98%) with VXUS, and just VTI (total US market) at 75% with VXUS. In short, it is a small factor US tilt.

https://www.portfoliovisualizer.com/bac ... tion8_3=75

Thoughts on this? It might be more reasonable if done this way (if you want 100% stocks, that is).

Boglehead Rob Berger did a nice YouTube cast on this:

https://youtu.be/0SN0lqh-v7g

I would just call it yet another Lazy Portfolio.
https://www.portfolioeinstein.com/235-p ... han-yours/

CyclingDuo

Maybe call it the Lazy Dave Portfolio? I agree it is boring portfolio, but the board is filled of them.

[Grt2bOutdoors]

I love Dave. I do. I just don't get his investment advice, especially his bond hatred. However, as I've told others he believes in a heavy investment real estate twist. If you do rental real estate you pay a lot of $$$ up front to buy something that pays you a predictable cash flow every month. Sounds like a bond, doesn't it?

If you are trying to do his thing with ETF, the first solution makes the most sense to me.

More like equity unless you are paying cash, then perhaps it’s a floating rate bond which pays a higher coupon as rental fees are jacked higher.

[Jazztonight]

I don't know much about Dave Ramsey and never paid much attention to him--I'm a Boglehead, I know about Jack Bogle, his history and character, and had the honor and pleasure to meet him once.

But this thread prompted me to check out Ramsey's Wikipedia page:
https://en.wikipedia.org/wiki/Dave_Ramsey

Sigh. To me, it's got "Beware!" signs all over it.

If someone wants to cherry-pick an investing philosophy or style, I can think of better models.

Just my 2 cents.

[CyclingDuo]

I know some here really do not like Dave Ramsey's advice on investing; I do not care much about it either (other than the part about aggressively saving).

However, I was curious about what is portfolio really meant with "Growth and Income", "Growth", "Aggressive Growth" and "International". I found that he advocates a 100% stock portfolio with 25% each in large-cap US, mid-cap US, small-cap US, and international respectively.
(See https://www.ramseysolutions.com/retirem ... sification)

Learning this, I thought I would take a twist on it. I used index ETFs from Vanguard. I did three versions benchmarked against VT (global stocks): 25% of each of the S&P classes (500, 400, 600) with VXUS (international), 25% of each of the CRSP index classes (70%, 85%, 98%) with VXUS, and just VTI (total US market) at 75% with VXUS. In short, it is a small factor US tilt.

https://www.portfoliovisualizer.com/bac ... tion8_3=75

Thoughts on this? It might be more reasonable if done this way (if you want 100% stocks, that is).

Boglehead Rob Berger did a nice YouTube cast on this:

https://youtu.be/0SN0lqh-v7g

I would just call it yet another Lazy Portfolio.
https://www.portfolioeinstein.com/235-p ... han-yours/

CyclingDuo

Maybe call it the Lazy Dave Portfolio? I agree it is boring portfolio, but the board is filled of them.

I’ve got the ETF symbols for a version somebody posted on Seeking Alpha a few years ago in a well thought out article. I’ll post up that author’s ETF choices once I get home from work and take a peek on my computer. If I remember right, the author split the international with VWO and something else, so it was a 5 fund ETF to get the Ramsey version.

[secondopinion]

I love Dave. I do. I just don't get his investment advice, especially his bond hatred. However, as I've told others he believes in a heavy investment real estate twist. If you do rental real estate you pay a lot of $$$ up front to buy something that pays you a predictable cash flow every month. Sounds like a bond, doesn't it?

If you are trying to do his thing with ETF, the first solution makes the most sense to me.

More like equity unless you are paying cash, then perhaps it’s a floating rate bond which pays a higher coupon as rental fees are jacked higher.

It is market-driven with the property value and partly the rental fees. It is not as stable, however. If one ignores the market price, then any decent stock ETF appears rather stable in their annual income.

[welderwannabe]

Dave also recommends an S&P index fund quite often, but he recommends it in taxable accounts.

Again he hates bonds, but likes rental income. Personally I like bonds more than rental income, but whatever.

[nedsaid]

I know some here really do not like Dave Ramsey's advice on investing; I do not care much about it either (other than the part about aggressively saving).

However, I was curious about what is portfolio really meant with "Growth and Income", "Growth", "Aggressive Growth" and "International". I found that he advocates a 100% stock portfolio with 25% each in large-cap US, mid-cap US, small-cap US, and international respectively.
(See https://www.ramseysolutions.com/retirem ... sification)

Learning this, I thought I would take a twist on it. I used index ETFs from Vanguard. I did three versions benchmarked against VT (global stocks): 25% of each of the S&P classes (500, 400, 600) with VXUS (international), 25% of each of the CRSP index classes (70%, 85%, 98%) with VXUS, and just VTI (total US market) at 75% with VXUS. In short, it is a small factor US tilt.

https://www.portfoliovisualizer.com/bac ... tion8_3=75

Thoughts on this? It might be more reasonable if done this way (if you want 100% stocks, that is).

My best guess, and I think I am right about this, is that Dave is invested in American Funds.

So what is Dave's method? E-Z P-Z. Just invest in the funds that return 12% a year, if they don't return 12% then don't invest in them. Too bad I never thought of that. Sort of like Mark Twain saying to only buy the stocks that go up, if they don't go up then don't buy them.

I agree the 12% expectations are ridiculous. One might get 12% if they leverage and have income to deal with any major snags on the way, but Dave hates debt. So, then I put forward some alternatives that meet the article's discussion, have low fees, and are not reliant on managers' wit.

But it is easy just to do it indexed.

I think Dave Ramsey has helped a lot of people. His investment advice isn't the greatest though. Several threads on the forum about this.

[Jack FFR1846]

Sorry, I can't get past the Ramsey ELP required qualifications. There was actually a youtube video about this where the host who has zero credentials or experience became an ELP advisor. How? Send in the initiation fee and then the monthly fee. Then when someone in your zip code asks for an advisor, they get sent to you.

I like the Ramsey videos where he advises people who have absolutely no clue about money but with respect to investing....nope.

[sljted]

Make sure you also pay a big fee to a certified financial planner so you get the full Dave Ramsey experience. That's the only way to unlock those 12% annual gains in mutual funds!

/s

And make sure you claim social security at age 62 and invest the payments with Ramsey Solutions. The guy says something that is obvious, like pay your debt down, and save more than you earn, and then suddenly he gets a free pass on all the harm he does to his followers.

First, Dave says only claim social security at 62 if you are going to invest it and second, you can't invest it with Ramsey Solutions. If what he says is so obvious, why is the average consumer drowning in debt? With regard to harm to his followers, you should probably supply some proof. It is known that he has helped millions get out of debt which is hardly harmful and yes, I am one of them.

[Carguy85]

I listened to Ramsey for quite a while. I wish I woulda followed his non investing advice 10 years sooner. I totally get how many don’t like him on this forum for a number of reasons not limited to debt aversion or his investment advice… his name tends to bring out a hate mob. Although most of us understand a simple 2 fund portfolio will beat out whatever his ELPs are trying to do, many in general society would probably benefit from someone to invest their money for them. No, I dont hold real estate investments, dont pay others to invest my money, and think 12% mutual fund returns on average are a bit off base but think it’s fairly narrow minded to discount everything he has to say. I’d take a wild guess that the more debt one has the higher the likelihood of them freaking out and pulling out of the market when times get a bit tough. I’ve taken a lot of what Ramsey, Bogle, Buffett, and bloggers like Collins have said and processed what seems to make the most sense to me. Minimize fixed costs/no debt and VTSAX/chill. Stable employment/no debt/ saleable assets/ relatively young age minimizes my need for bonds.

[secondopinion]

I listened to Ramsey for quite a while. I wish I woulda followed his non investing advice 10 years sooner. I totally get how many don’t like him on this forum for a number of reasons not limited to debt aversion or his investment advice… his name tends to bring out a hate mob. Although most of us understand a simple 2 fund portfolio will beat out whatever his ELPs are trying to do, many in general society would probably benefit from someone to invest their money for them. No, I dont hold real estate investments, dont pay others to invest my money, and think 12% mutual fund returns on average are a bit off base but think it’s fairly narrow minded to discount everything he has to say. I’d take a wild guess that the more debt one has the higher the likelihood of them freaking out and pulling out of the market when times get a bit tough. I’ve taken a lot of what Ramsey, Bogle, Buffett, and bloggers like Collins have said and processed what seems to make the most sense to me. Minimize fixed costs/no debt and VTSAX/chill. Stable employment/no debt/ saleable assets/ relatively young age minimizes my need for bonds.

I actually do respect Dave Ramsey and kind of agree with him on some points; but given my knowledge and personality, there are many points in which I do not agree (even before I knew about this forum). Given that I actually can take advantage of my credit cards rather than the cards taking advantage of me (really, it is nice to earn interest while you take your own sweet time to pay them off during the grace periods), I argue the no credit card point; I collateralize, but not pay off, the credit cards until I have to as to avoid interest. But since most cannot do that without falling victim to buying what they should not, they really should cut their credit cards; but I guess if everyone was savvy, I would not get to have the perks like I do with the credit cards.

When one is analytical by nature, they take every point and question it. If it makes sense, keep it; if not, toss it. If it depends, it is a discussion point.

Investing (in the sense of what funds are worth it) is not a point that I agree much with either Dave Ramsey and partially so with other Bogleheads. I carry more of a skew discussion and how it relates to the portfolio, and I am actually open to options and singleton stocks/bonds in select cases; I am just too cheap to pay someone to do it. If I cannot trust myself to invest well, how can I trust myself to pick someone to invest for me?

[Carguy85]

OP, given you are at least somewhat into straying from mutual funds, I’m genuinely interested in the probability you think you will on average beat the sp500 over the next say 20-30 years shuffling investments in the stock market? Every day there are very non-bogle-ish schemes people post about on here…boggles my mind that people seemingly disregard overwhelming evidence that such stuff is very unfavorable in the long run. I suppose that’s what makes the world go round.

[the_wiki]

Make sure you also pay a big fee to a certified financial planner so you get the full Dave Ramsey experience. That's the only way to unlock those 12% annual gains in mutual funds!

/s

Right... But my point is that we can have the "Dave Ramsey experience" the "Boglehead" way.

But the Boglehead way is not listening to know-it-all radio hosts.

There is no indication Ramsay knows how to invest any better than Jack Bogle. He got rich selling ads on a radio program, not by investing.

[gtrplayer]

I know some here really do not like Dave Ramsey's advice on investing; I do not care much about it either (other than the part about aggressively saving).

However, I was curious about what is portfolio really meant with "Growth and Income", "Growth", "Aggressive Growth" and "International". I found that he advocates a 100% stock portfolio with 25% each in large-cap US, mid-cap US, small-cap US, and international respectively.
(See https://www.ramseysolutions.com/retirem ... sification)

Learning this, I thought I would take a twist on it. I used index ETFs from Vanguard. I did three versions benchmarked against VT (global stocks): 25% of each of the S&P classes (500, 400, 600) with VXUS (international), 25% of each of the CRSP index classes (70%, 85%, 98%) with VXUS, and just VTI (total US market) at 75% with VXUS. In short, it is a small factor US tilt.

https://www.portfoliovisualizer.com/bac ... tion8_3=75

Thoughts on this? It might be more reasonable if done this way (if you want 100% stocks, that is).

My question is why? Is it realistic to think that this will do better than a “Boglehead” two or three fund portfolio in the long term?

[CyclingDuo]

I know some here really do not like Dave Ramsey's advice on investing; I do not care much about it either (other than the part about aggressively saving).

However, I was curious about what is portfolio really meant with "Growth and Income", "Growth", "Aggressive Growth" and "International". I found that he advocates a 100% stock portfolio with 25% each in large-cap US, mid-cap US, small-cap US, and international respectively.
(See https://www.ramseysolutions.com/retirem ... sification)

Learning this, I thought I would take a twist on it. I used index ETFs from Vanguard. I did three versions benchmarked against VT (global stocks): 25% of each of the S&P classes (500, 400, 600) with VXUS (international), 25% of each of the CRSP index classes (70%, 85%, 98%) with VXUS, and just VTI (total US market) at 75% with VXUS. In short, it is a small factor US tilt.

https://www.portfoliovisualizer.com/bac ... tion8_3=75

Thoughts on this? It might be more reasonable if done this way (if you want 100% stocks, that is).

Boglehead Rob Berger did a nice YouTube cast on this:

https://youtu.be/0SN0lqh-v7g

I would just call it yet another Lazy Portfolio.
https://www.portfolioeinstein.com/235-p ... han-yours/

CyclingDuo

Maybe call it the Lazy Dave Portfolio? I agree it is boring portfolio, but the board is filled of them.

Promised you the ETF symbols from the Seeking Alpha articles I read (two sample versions where one uses Vanguard ETFs, the other uses Blackrock's iShares ETFs). Anyway, here are the ETFs that the author had chosen as his version of the Ramsey Portfolio...

International was split between two which is why the author chose a 5 fund ETF for Vanguard rather than 4...

Vanguard ETFs

VGK: 12.5% Vanguard European Stock Index Fund (ER .08)
VWO: 12.5% Vanguard Emerging Markets Stock Index Fund (ER .08)

VOO: 25% Vanguard 500 Index Fund (ER .01)
VYM: 25% Vanguard High Dividend Yield Index Fund (ER .08)
VBR: 25% Vanguard Small Cap Value Index Fund (ER .07)

Blackrock iShares ETFs

IXUS: 25% iShares Core MSCI Total International Stock (ER .07)
HDV: 25% iShares Core High Dividend ETF (ER .08)
IVV: 25% iShares Core S&P 500 ETF (ER .03)
IJS: 25% iShares S&P Small-Cap 600 Value ETF (ER .18)

https://seekingalpha.com/article/310149 ... replicable
https://seekingalpha.com/article/383210 ... onte-carlo

Regardless, I am not championing the strategy for our own portfolio. Rather, I am just responding that like all Lazy Portfolios - sticking with your strategy, staying the course, and the amount of money you save and invest throughout your working career are more key over the long haul. As Berger and the list above from the Seeking Alpha articles point out, there are low cost versions available compared to what would most likely be a much higher fee cost way of doing it via a Ramsey SmartVestor Pro.

Jim Dahle's list of Lazy Portfolios...

https://www.whitecoatinvestor.com/150-p ... han-yours/

CyclingDuo

[HarryBosch]

The Dave Ramsey portfolio Boglehead style is to just use the three fund method and keep it simple. Dave focuses on daily financial behavior like budgeting and getting out of debt and doesn’t claim to be an investment guru. Don’t need to make this bigger than it is.

[bloom2708]

What is the "Income" of Growth and Income? I know Dave hates bonds, but took some liberties.

Dividend paying stocks.

The best kind. Left pocket to right pocket income.

[Jags4186]

The Dave Ramsey portfolio Boglehead style is to just use the three fund method and keep it simple. Dave focuses on daily financial behavior like budgeting and getting out of debt and doesn’t claim to be an investment guru. Don’t need to make this bigger than it is.

I do agree. Dave Ramsey's actual investment philosophy is invest 15% of your income + any company matches in combination of 401k, Roth IRA, and taxable accounts, and then invest everything else in an SP500 fund until you have enough to buy rental real estate in cash.

[burritoLover]

The Dave Ramsey portfolio Boglehead style is to just use the three fund method and keep it simple. Dave focuses on daily financial behavior like budgeting and getting out of debt and doesn’t claim to be an investment guru. Don’t need to make this bigger than it is.

No, I think the Dave Ramsey portfolio is you just pick the actively managed fund with the highest return and then withdrawal 8% each year at retirement.

[firebirdparts]

Looking at the American funds, a couple comments: the history in question is 1985 to the present. They did actually return right at 11 and 12% over that span. the S&P500 returns 11.1% over that span. Endpoints of course are very important, and that's where we are today taking all the data we have on these funds.

I'll just also mention that I gave some money to one Ramsey endorsed financial guy to see what he'd do with it. He was much more mainstream and put in advisor class funds across the board, but none of the American funds. This is just one guy, but he did not follow what Dave Ramsey teaches. Just a regular advisor doing advisor things.

I told him "full on aggressive" and he put in about a 60/40 portfolio. In retrospect, if I had let them keep it, they would have done very well coming out of Covid. I don't have any complaints really about what they invested in. Definitely didn't have any crystal ball.

[firebirdparts]

Although most of us understand a simple 2 fund portfolio will beat out whatever his ELPs are trying to do....

No, see, here's the problem. A 1 fund portfolio generally will win given enough time. Whether or not Ramsey wins depends on the endpoints and he will win most of the time. I always worry when somebody says "we all accept this" and then say something that's not true.

You can argue "this is bad advice because [reasons]" but you can't argue "Dave Ramsey's investing advice had bad results right now", or in fact, most of the time.

The argument against 100% equities is risk adjustment, and the main "fact" that makes risk adjusted returns useful is you get to argue is that "oh you [or worse, 'most people'] are one of those inferiors that'll sell at the bottom."

It is what it is. Time in the market. if you're 40% dry powder, you shouldn't expect to keep up Dave Ramsey.

[secondopinion]

Make sure you also pay a big fee to a certified financial planner so you get the full Dave Ramsey experience. That's the only way to unlock those 12% annual gains in mutual funds!

/s

Right... But my point is that we can have the "Dave Ramsey experience" the "Boglehead" way.

But the Boglehead way is not listening to know-it-all radio hosts.

There is no indication Ramsay knows how to invest any better than Jack Bogle. He got rich selling ads on a radio program, not by investing.

Right. I am merely pointing out how one might adapt the portfolio. Whether people here listen to Dave Ramsey or not is kind of irrelevant.