Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

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Nate79
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by Nate79 » Tue Jun 12, 2018 12:05 pm

Jebediah wrote:
Tue Jun 12, 2018 11:40 am
AIVSX returns after-tax are 8.91% since inception (per morningstar), and it trails the market by over 2% over the last 15 years.

VFINX (Vanguard 500) has a 9.58% after-tax return since inception.

Image
Which is why DR doesn't nor do most people recommend using AIVSX in a taxable account for this exact reason. DR recommends using the S&P500 index fund for example from Vanguard in taxable accounts.

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willthrill81
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by willthrill81 » Tue Jun 12, 2018 12:08 pm

knpstr wrote:
Tue Jun 12, 2018 9:08 am
willthrill81 wrote:
Mon Jun 11, 2018 10:50 pm
...
Are these people better off than they would have been otherwise? Probably, but that's along the lines of what I've heard called the "better than nothing" fallacy. There can be a big gulf between "better than nothing" and adequate. DR's advice here is akin to throwing a person 200 miles offshore a tiny lifebuoy. It's far better than nothing, but it's also a far cry from what they really need to get where they want to go safely.
His core advice is to put 15% into retirement accounts while you're getting out of debt and to max accounts (401k and Roth) for the rest of your life once out of debt. You'll end up with a little more than "a lifebuoy 200 miles offshore" following this advice.

One could easily end up with $1M+ dollars, have S.S. to supplement that, and have no debt of any kind by age 62. In a world where the median networth of people age 55-64 is $165,900 (as of 2014) I'd say that is an adequate result. I'm pretty sure there are retirees here on this board that had less than that and do just fine in retirement.
It depends entirely on how long they maintain that 15% savings rate. With a 5% real return and 4% withdrawals, it would take about 43 years to reach financial independence with a 15% savings rate (not accounting for SS, but reduced benefits are coming down the line according to the SSA). Most practitioners of DR's advice seem to be at least in their 30s, and many are older.

More importantly, even with a million dollar (though $1M in 30 years at 3% inflation would be worth 'just' $417k in today's dollars) portfolio, those 8% withdrawals DR recommends, whether fixed or flexible, are very likely to deplete portfolios with great haste.
knpstr wrote:
Tue Jun 12, 2018 9:08 am
When it comes to investments, Bogleheads tend to be a little of the "my way or the highway" type crowd. People are better off going with Vanguard for sure, but people could still do fine if Vanguard never existed.
Again, I don't have a huge problem with his recommending active funds over passive. But he doesn't need to create extremely unrealistic expectations when it comes returns and especially withdrawals.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

indexonlyplease
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by indexonlyplease » Tue Jun 12, 2018 1:58 pm

Grt2bOutdoors wrote:
Tue Jun 12, 2018 8:17 am
indexonlyplease wrote:
Tue Jun 12, 2018 7:48 am
I just found this on my taxed deferred account. Is this where my money should be??

AMCAP Fund(R) - Class R6 Trade restrictions may apply. Please refer to the fund prospectus for more information.
Prospectus | Fact Sheet
3.40 19.40 10.95 14.36 10.86 11.98 05/01/1967 0.36

American Funds American Balanced Fund - Class R6
Prospectus | Fact Sheet
-1.15 9.78 8.06 9.68 8.24 10.99 07/25/1975 0.28

11.98 for life of fund not bad
10.99 for life of balance fund not bad either.

Can I get these returns for the next 30 years.
What does your crystal ball say?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe"

This is a great quote you have below your post. I really like it. I starting following this 2 years ago when I changed my AA. I could make more but I will take what the market gives me and be happy with a lower stock AA. Why because it is all I need.

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nedsaid
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by nedsaid » Tue Jun 12, 2018 2:14 pm

Dave Ramsey isn't an idiot but you can tell he has been stung by critics. He was defensive in the video but does acknowledge that indexing beats most active funds. Many worse things you can do than pay the load and hold American Funds for the long term. There are alternatives out there, including well-run and cheaper active funds at Vanguard. This sort of reminds me of the discussions about factor investing.
A fool and his money are good for business.

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by postselect » Tue Jun 12, 2018 2:56 pm

Jebediah wrote:
Tue Jun 12, 2018 11:40 am
AIVSX returns after-tax are 8.91% since inception (per morningstar), and it trails the market by over 2% over the last 15 years.

VFINX (Vanguard 500) has a 9.58% after-tax return since inception.

Image
+1

indexonlyplease
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by indexonlyplease » Wed Jun 13, 2018 12:32 pm

For Dave Ramsey to be true to his listeners he would have to show us his investments for the last 30 yrs. or at least the length of his show. Not the amounts in $$ but the fund he has used. Then he can say he has really beat the market.

I am s fan of Dave Ramsey and believe in his debt free lifestyle. That has been proven. Now I need proof on the funds he wants us to use to beat the market.

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by welderwannabe » Wed Jun 13, 2018 12:41 pm

He is getting a lot of people to clean up their debt and start investing. His 'show' is entertaining and uplifting. If his followers follow his advice and do active funds, most would be far better off than if they never ran into him to begin with.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by Grt2bOutdoors » Wed Jun 13, 2018 1:20 pm

welderwannabe wrote:
Wed Jun 13, 2018 12:41 pm
He is getting a lot of people to clean up their debt and start investing. His 'show' is entertaining and uplifting. If his followers follow his advice and do active funds, most would be far better off than if they never ran into him to begin with.
I just heard a podcast where he advised a young caller who had no money not to take out $120k in student loans to become a registered nurse in LA. I think that was poor advice.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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willthrill81
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by willthrill81 » Wed Jun 13, 2018 1:45 pm

welderwannabe wrote:
Wed Jun 13, 2018 12:41 pm
He is getting a lot of people to clean up their debt and start investing. His 'show' is entertaining and uplifting. If his followers follow his advice and do active funds, most would be far better off than if they never ran into him to begin with.
I agree that most will be better off. It's just sad that someone with so much exposure to millions of people is herding them toward high fee financial advisors, giving highly questionable investment advice, and espousing 8% portfolio withdrawals in retirement. Most of these people will probably never question these recommendations.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

save-early-often
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by save-early-often » Wed Jun 13, 2018 2:10 pm

But he's got the heart of a teacher........

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by goblue100 » Wed Jun 13, 2018 2:55 pm

Grt2bOutdoors wrote:
Wed Jun 13, 2018 1:20 pm

I just heard a podcast where he advised a young caller who had no money not to take out $120k in student loans to become a registered nurse in LA. I think that was poor advice.
Why? 120K sounds excessive to get a degree in nursing. Are there not any community colleges in California? Is the young caller really going to get a better job with a $120,000 degree than a $15,000 degree?
Some people are immune to good advice. - Saul Goodman

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by Grt2bOutdoors » Wed Jun 13, 2018 2:56 pm

willthrill81 wrote:
Wed Jun 13, 2018 1:45 pm
welderwannabe wrote:
Wed Jun 13, 2018 12:41 pm
He is getting a lot of people to clean up their debt and start investing. His 'show' is entertaining and uplifting. If his followers follow his advice and do active funds, most would be far better off than if they never ran into him to begin with.
I agree that most will be better off. It's just sad that someone with so much exposure to millions of people is herding them toward high fee financial advisors, giving highly questionable investment advice, and espousing 8% portfolio withdrawals in retirement. Most of these people will probably never question these recommendations.
That's because he makes a compelling argument; when he's not feeling well he visits a doctor, when he needs surgery he uses a surgeon, when he invests in mutual funds, he goes to the mutual fund experts, he's not an expert on mutual funds, he's an expert on investing in real estate and getting out of debt. He uses his show to recommend SmartVestor Pro's and ELPs, what he doesn't disclose to the audience is he is getting referral fees (he claims those ELPs and SmartVestor Pros (heart of a teacher) have been thoroughly vetted by his firm to be above board) from those ELPs and SmartVestor Pro's in the form of advertisement fees, that in and of itself presents a conflict of interest but only if you act upon the recommendation to talk to those third parties and only if you purchase something from them. It's a well thought out script.
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by Grt2bOutdoors » Wed Jun 13, 2018 3:00 pm

goblue100 wrote:
Wed Jun 13, 2018 2:55 pm
Grt2bOutdoors wrote:
Wed Jun 13, 2018 1:20 pm

I just heard a podcast where he advised a young caller who had no money not to take out $120k in student loans to become a registered nurse in LA. I think that was poor advice.
Why? 120K sounds excessive to get a degree in nursing. Are there not any community colleges in California? Is the young caller really going to get a better job with a $120,000 degree than a $15,000 degree?
Umm, we are talking about a registered nursing degree, no community college is going to get you a 4 year nursing program degree. If the degree starts out with pay of $100K which caller claimed they are paying for first year nurses in the LA area, it's not ridiculous to take on the loan. Is it better to attend community college to get a lower paying job instead? You must be thinking of an LPN - big difference. Where the trap is, if student takes a loan for years 1-2 and then does not complete school but is now saddled with $60K in student loans.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by goblue100 » Wed Jun 13, 2018 3:29 pm

Grt2bOutdoors wrote:
Wed Jun 13, 2018 3:00 pm
goblue100 wrote:
Wed Jun 13, 2018 2:55 pm
Why? 120K sounds excessive to get a degree in nursing. Are there not any community colleges in California? Is the young caller really going to get a better job with a $120,000 degree than a $15,000 degree?
Umm, we are talking about a registered nursing degree, no community college is going to get you a 4 year nursing program degree. If the degree starts out with pay of $100K which caller claimed they are paying for first year nurses in the LA area, it's not ridiculous to take on the loan. Is it better to attend community college to get a lower paying job instead? You must be thinking of an LPN - big difference. Where the trap is, if student takes a loan for years 1-2 and then does not complete school but is now saddled with $60K in student loans.
If you do two years at community college and two years at USC what does your diploma say and what did the degree cost? I don't know the best nursing schools in California, and don't really care, but $120,000 for an education that could easily be had for a fourth of that is expensive. And about a year after you get your first job what your diploma has on it doesn't matter anyway.
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by willthrill81 » Wed Jun 13, 2018 3:46 pm

Grt2bOutdoors wrote:
Wed Jun 13, 2018 3:00 pm
Where the trap is, if student takes a loan for years 1-2 and then does not complete school but is now saddled with $60K in student loans.
I have a family member who took six or seven years to get a B.S. in an area with limited usefulness. This person now works for the USPS and is saddled with $30k of students loans for something that was about as close to a pure waste in terms of both opportunity cost and money as a college education can be. Another family member has significantly less student debt than that but never graduated at all. Two others attended and aren't use their education at all; both are working for menial pay.

Despite my working in higher ed, I'm very much opposed to the idea of encouraging every breathing 18 year old who has no clue what they want out of life to jump straight into an expensive university, keeping their fingers crossed that a bolt of lightning will reveal it to them. Taking a break between high school and college, attending a few courses at a community college, etc. can help young people figure out what they want to do with their lives.
goblue100 wrote:
Wed Jun 13, 2018 3:29 pm
If you do two years at community college and two years at USC what does your diploma say and what did the degree cost? I don't know the best nursing schools in California, and don't really care, but $120,000 for an education that could easily be had for a fourth of that is expensive. And about a year after you get your first job what your diploma has on it doesn't matter anyway.
Why buy a Lamborghini when a Toyota will get you back and forth to work?
I'm inclined to agree. I not an expert in nursing, but university prestige seems very unlikely to carry any significant weight at 90% or more of the hospitals, clinics, etc. that I've seen. As long as the degree-granting institution is accredited and recognized by the state of practice, most employers would be more than satisfied.
Last edited by willthrill81 on Wed Jun 13, 2018 3:54 pm, edited 1 time in total.
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by Grt2bOutdoors » Wed Jun 13, 2018 3:49 pm

willthrill81 wrote:
Wed Jun 13, 2018 3:46 pm
goblue100 wrote:
Wed Jun 13, 2018 3:29 pm
Grt2bOutdoors wrote:
Wed Jun 13, 2018 3:00 pm
goblue100 wrote:
Wed Jun 13, 2018 2:55 pm
Why? 120K sounds excessive to get a degree in nursing. Are there not any community colleges in California? Is the young caller really going to get a better job with a $120,000 degree than a $15,000 degree?
Umm, we are talking about a registered nursing degree, no community college is going to get you a 4 year nursing program degree. If the degree starts out with pay of $100K which caller claimed they are paying for first year nurses in the LA area, it's not ridiculous to take on the loan. Is it better to attend community college to get a lower paying job instead? You must be thinking of an LPN - big difference. Where the trap is, if student takes a loan for years 1-2 and then does not complete school but is now saddled with $60K in student loans.
If you do two years at community college and two years at USC what does your diploma say and what did the degree cost? I don't know the best nursing schools in California, and don't really care, but $120,000 for an education that could easily be had for a fourth of that is expensive. And about a year after you get your first job what your diploma has on it doesn't matter anyway.
Why buy a Lamborghini when a Toyota will get you back and forth to work?
I'm inclined to agree. I not an expert in nursing, but university prestige seems very unlikely to carry any significant weight at 90% or more of the hospitals, clinics, etc. that I've seen. As long as the degree-granting institution is accredited and recognized by the state of practice, most employers would be more than satisfied.
You're not going to have the same level of education in the prerequisites within science and math.

Do some investigation - let us know how many nurses went to Community College for the first two years, then college for last two years and walked out with a degree in registered nursing and was gainfully employed in year 1 making $100K. I'll wait for your response.

Would you recommend future doctors follow the same path you suggest above?
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by mancich » Wed Jun 13, 2018 4:03 pm

He compares Large Cap Growth funds over the last 40 years to the S&P 500 and says that the former have averaged 13.02% and the latter 11.8%. But is this net of fees (higher expense ratios for the average actively managed fund, plus the cost of an investment advisor, which DR strongly advocates) ? If even a low cost actively managed fund charges an expense ratio of .50% (and this is low), and there is a 1% AUM fee from the advisor, then I would say the average annual returns are about the same.

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by willthrill81 » Wed Jun 13, 2018 4:04 pm

Grt2bOutdoors wrote:
Wed Jun 13, 2018 3:49 pm
willthrill81 wrote:
Wed Jun 13, 2018 3:46 pm
goblue100 wrote:
Wed Jun 13, 2018 3:29 pm
Grt2bOutdoors wrote:
Wed Jun 13, 2018 3:00 pm
goblue100 wrote:
Wed Jun 13, 2018 2:55 pm
Why? 120K sounds excessive to get a degree in nursing. Are there not any community colleges in California? Is the young caller really going to get a better job with a $120,000 degree than a $15,000 degree?
Umm, we are talking about a registered nursing degree, no community college is going to get you a 4 year nursing program degree. If the degree starts out with pay of $100K which caller claimed they are paying for first year nurses in the LA area, it's not ridiculous to take on the loan. Is it better to attend community college to get a lower paying job instead? You must be thinking of an LPN - big difference. Where the trap is, if student takes a loan for years 1-2 and then does not complete school but is now saddled with $60K in student loans.
If you do two years at community college and two years at USC what does your diploma say and what did the degree cost? I don't know the best nursing schools in California, and don't really care, but $120,000 for an education that could easily be had for a fourth of that is expensive. And about a year after you get your first job what your diploma has on it doesn't matter anyway.
Why buy a Lamborghini when a Toyota will get you back and forth to work?
I'm inclined to agree. I not an expert in nursing, but university prestige seems very unlikely to carry any significant weight at 90% or more of the hospitals, clinics, etc. that I've seen. As long as the degree-granting institution is accredited and recognized by the state of practice, most employers would be more than satisfied.
You're not going to have the same level of education in the prerequisites within science and math.

Do some investigation - let us know how many nurses went to Community College for the first two years, then college for last two years and walked out with a degree in registered nursing and was gainfully employed in year 1 making $100K. I'll wait for your response.

Would you recommend future doctors follow the same path you suggest above?
I don't have access to that level of data, and I frankly doubt that you do either. Can you show that licensed nurses are being turned away from a substantial number of institutions because they didn't attend an prestigious enough university or because their first two years were at a CC?

Let's take a look at what nurses themselves say.
I am just wondering why it would matter where you went to school when in the end the RN license is what matters
No I don't think it matters as long as your school has a decent reputation. Accreditation does matter so make sure your schools is appropriately accredited. And for personal benefits you should care about the NCLEX pass rate as well. But what matters most is that you are a nurse and there is a need for that.
believe me...its the NCLEX result that counts in the long run. All schools aim to get their students to ace the NCLEX. Once you are licensed, no one will care about GPA or where your BSN, Diploma or ADN is from. WE all take the same exam to achieve the same licenses.
And yeah...community colleges, state universities, etc., diploma programs...no one cares where your degree comes
from as long as you're competent on the floor and have RN after your name.
It doesn't matter where you go to school for nursing, but make sure that the school's nursing program is accredited.
I'm from NJ, and I would look into County College of Morris. VERY good program, and extremely affordable. It's all about passing the NCLEX, no one really cares where you go as long as it's accredited and later on your can look in graduate programs at a more prestigious school. I started at CCM before I moved to Nashville. Great program!!!
I go to what some would call a small community college in Pa. But last year our program went against other major universities such as Drexel, Pitt, Duquesne etc and we were top in the state. Just because its a huge university with expensive tuition does not mean you are going into the best program.
https://allnurses.com/pre-nursing-stude ... 82855.html

Every one of these nurses is backing up precisely what I said.

I wouldn't recommend that anyone attend just any nursing school, and these nurses probably wouldn't either. But once you get licensed, where you got your degree from is largely irrelevant.

The situation regarding physicians is different but not as much as many think. Take a look at your local hospital or clinic and see how many of the physicians there got degrees overseas from universities that almost no one here as ever heard of. Certainly university prestige matters in some places, but even with physicians it doesn't seem to be a big factor at most; quality of education is probably the much bigger variable.

Here's what Jim (White Coat Investor) said about this:
I suspect if you do well at the CC and go on and do well at the university that no one is ever going to look at your transcript and hold that against you. But I have a hard time buying that a CC course is taught at the same level as a university course. The caliber of students is generally significantly different. Can I prove it? Nope. Do CC administrators argue all the time that because there is no research focus they actually teach better? Sure. Do I buy that argument? Nope. I know the kids going to CC and the ones going to university. They’re not the same caliber of kids. Is doing CC for a couple of years in order to dramatically reduce educational debt probably a good idea for many? Sure.
https://www.whitecoatinvestor.com/the-f ... r-college/
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by welderwannabe » Wed Jun 13, 2018 4:39 pm

Grt2bOutdoors wrote:
Wed Jun 13, 2018 1:20 pm
I just heard a podcast where he advised a young caller who had no money not to take out $120k in student loans to become a registered nurse in LA. I think that was poor advice.
I don't. Less than half of americans that start college finish...but their debt stays with them. That is a poor success rate.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by welderwannabe » Wed Jun 13, 2018 4:41 pm

willthrill81 wrote:
Wed Jun 13, 2018 1:45 pm
I agree that most will be better off. It's just sad that someone with so much exposure to millions of people is herding them toward high fee financial advisors, giving highly questionable investment advice, and espousing 8% portfolio withdrawals in retirement. Most of these people will probably never question these recommendations.
No argument there. I wonder how many people can even find the investments he recommends:

25% Aggressive Growth
25% Growth
25% Growth and Income
25% International

Good luck calling Vanguard and using the above language and ending up with a portfolio.

I don't follow his investing advice, but again I think people are better off following it then doing nothing...which is what most of his callers were doing before they found him.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by Grt2bOutdoors » Wed Jun 13, 2018 4:43 pm

welderwannabe wrote:
Wed Jun 13, 2018 4:41 pm
willthrill81 wrote:
Wed Jun 13, 2018 1:45 pm
I agree that most will be better off. It's just sad that someone with so much exposure to millions of people is herding them toward high fee financial advisors, giving highly questionable investment advice, and espousing 8% portfolio withdrawals in retirement. Most of these people will probably never question these recommendations.
No argument there. I wonder how many people can even find the investments he recommends:

25% Aggressive Growth
25% Growth
25% Growth and Income
25% International

Good luck calling Vanguard and using the above language and ending up with a portfolio.

I don't follow his investing advice, but again I think people are better off following it then doing nothing...which is what most of his callers were doing before they found him.
Have you tried? :twisted:
We've had other posts on this: I can think of at least 8 funds that meet the criteria above, half are indexed, the other are actively managed.
Last edited by Grt2bOutdoors on Wed Jun 13, 2018 4:46 pm, edited 1 time in total.
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by Grt2bOutdoors » Wed Jun 13, 2018 4:45 pm

welderwannabe wrote:
Wed Jun 13, 2018 4:39 pm
Grt2bOutdoors wrote:
Wed Jun 13, 2018 1:20 pm
I just heard a podcast where he advised a young caller who had no money not to take out $120k in student loans to become a registered nurse in LA. I think that was poor advice.
I don't. Less than half of americans that start college finish...but their debt stays with them. That is a poor success rate.
Source? Probably the same source that says over half who get married, get divorced.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by welderwannabe » Wed Jun 13, 2018 5:04 pm

Grt2bOutdoors wrote:
Wed Jun 13, 2018 4:45 pm
Source? Probably the same source that says over half who get married, get divorced.
Statistics can be spun many ways, and you can do your own research if you want to look into it. It has been studied by various organizations...some international, some in the US. Pick your favorite one.

About 42% of college students finish their degree at their first college with their first major within 6 years. The rest drop out, switch colleges, or change their major entirely. When we factor in people that did eventually graduate, but did it with a different major or a different school it jumps up to about 65%.

For adult students, it is even worse...people over the age of 25 only have a 35% rate of finishing their original major at their original school within 6 years of starting. It is about 50% once we factor in people that switched schools or changed majors. The other 50% stopped entirely.

You can spin it any way you like, and so can everyone else, but for an adult student to go tens of thousands of dollars into debt with a 50% chance of finishing the degree at all is not a great plan in my opinion. I think people would spend a lot more time considering their education, their major, and what school they want to go to if they had to pay cash out of pocket to go. It is too easy to get a 100K+ student loan nowadays.

I have a coworker whose wife has $350K of student loan debt. Sure, she has her PhD, but it is in something she is making $50K a year doing.

Here is a quick easy read with some numbers https://www.theatlantic.com/business/ar ... ge/255226/
Last edited by welderwannabe on Wed Jun 13, 2018 5:08 pm, edited 1 time in total.
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by Nate79 » Wed Jun 13, 2018 5:07 pm

Grt2bOutdoors wrote:
Wed Jun 13, 2018 2:56 pm
willthrill81 wrote:
Wed Jun 13, 2018 1:45 pm
welderwannabe wrote:
Wed Jun 13, 2018 12:41 pm
He is getting a lot of people to clean up their debt and start investing. His 'show' is entertaining and uplifting. If his followers follow his advice and do active funds, most would be far better off than if they never ran into him to begin with.
I agree that most will be better off. It's just sad that someone with so much exposure to millions of people is herding them toward high fee financial advisors, giving highly questionable investment advice, and espousing 8% portfolio withdrawals in retirement. Most of these people will probably never question these recommendations.
That's because he makes a compelling argument; when he's not feeling well he visits a doctor, when he needs surgery he uses a surgeon, when he invests in mutual funds, he goes to the mutual fund experts, he's not an expert on mutual funds, he's an expert on investing in real estate and getting out of debt. He uses his show to recommend SmartVestor Pro's and ELPs, what he doesn't disclose to the audience is he is getting referral fees (he claims those ELPs and SmartVestor Pros (heart of a teacher) have been thoroughly vetted by his firm to be above board) from those ELPs and SmartVestor Pro's in the form of advertisement fees, that in and of itself presents a conflict of interest but only if you act upon the recommendation to talk to those third parties and only if you purchase something from them. It's a well thought out script.
Actually he discloses that he gets a referral fee many many times (but not every time).

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by welderwannabe » Wed Jun 13, 2018 5:09 pm

Grt2bOutdoors wrote:
Wed Jun 13, 2018 4:43 pm
Have you tried? :twisted:
We've had other posts on this: I can think of at least 8 funds that meet the criteria above, half are indexed, the other are actively managed.
U got me there. I have not. I will stick with TSM, my treasury funds, and my total international! :beer
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by Nate79 » Wed Jun 13, 2018 5:12 pm

welderwannabe wrote:
Wed Jun 13, 2018 4:39 pm
Grt2bOutdoors wrote:
Wed Jun 13, 2018 1:20 pm
I just heard a podcast where he advised a young caller who had no money not to take out $120k in student loans to become a registered nurse in LA. I think that was poor advice.
I don't. Less than half of americans that start college finish...but their debt stays with them. That is a poor success rate.
+1 There are a lot of fools out there taking on student loan debt.

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by Nate79 » Wed Jun 13, 2018 5:14 pm

welderwannabe wrote:
Wed Jun 13, 2018 4:41 pm
willthrill81 wrote:
Wed Jun 13, 2018 1:45 pm
I agree that most will be better off. It's just sad that someone with so much exposure to millions of people is herding them toward high fee financial advisors, giving highly questionable investment advice, and espousing 8% portfolio withdrawals in retirement. Most of these people will probably never question these recommendations.
No argument there. I wonder how many people can even find the investments he recommends:

25% Aggressive Growth
25% Growth
25% Growth and Income
25% International

Good luck calling Vanguard and using the above language and ending up with a portfolio.

I don't follow his investing advice, but again I think people are better off following it then doing nothing...which is what most of his callers were doing before they found him.
For anyone who listens to his show will know (he explains other names for those categories). For anyone who has access to a computer and looks on American funds page will also see those exact words. For anyone who sits on the internet complaining about DR but doesn't take the time to look things up then probably not. Actually those categories are not so precise than what the level of analysis that goes on on this site. His main point is about having a high savings rate and less worry about the exact percentages so much.

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by Reb Tevye » Wed Jun 13, 2018 6:09 pm

Image
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by nisiprius » Thu Jun 14, 2018 9:50 am

Nate79 wrote:
Wed Jun 13, 2018 5:14 pm
welderwannabe wrote:
Wed Jun 13, 2018 4:41 pm
I wonder how many people can even find the investments he recommends:

25% Aggressive Growth
25% Growth
25% Growth and Income
25% International
...For anyone who has access to a computer and looks on American funds page will also see those exact words. For anyone who sits on the internet complaining about DR but doesn't take the time to look things up then probably not...
Please give me an appropriate link to the American Funds website. Because as a matter of fact, and before I read your post, I did look to see if there were American Funds that obviously aligned with his category names. I expected them to be easily identifiable. After all, for "growth," the "American Growth Fund of America" is so famous that I know it anyway.

I'd always thought that he was referring to specific American Funds under the guise of supposed categories--the equivalent of talking about Vanguard funds and saying "I recommend 'a' capital opportunity fund, 'a' strategic small-cap equity fund, 'an' international explorer fund, and 'a' primecap fund."

But I did go to the American Funds website, and I did not see obvious matchups, either in fund names or in their category names.

For example, they do not give an "aggressive growth" category, nor do they have any mutual fund with "aggressive" in its name. And "international" isn't one of their fund categories, either.

On this page I see:

Image

and if lick on "Growth" and then the "ALL 7 GROWTH FUNDS" link, I do not see any reference to "aggressive growth."

Image

And if I click on each of those seven funds to see what their capsule summary says, not one of them uses the word "aggressive" or the phrase "aggressive growth" in their summary. SMALLCAP World Fund, for example, says, simply "Dedicated to small companies. Focuses on bottom-up global investing in companies with market capitalizations up to $6.0 billion at the time of purchase."
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by Nate79 » Thu Jun 14, 2018 10:03 am

nisiprius wrote:
Thu Jun 14, 2018 9:50 am
Nate79 wrote:
Wed Jun 13, 2018 5:14 pm
welderwannabe wrote:
Wed Jun 13, 2018 4:41 pm
I wonder how many people can even find the investments he recommends:

25% Aggressive Growth
25% Growth
25% Growth and Income
25% International
...For anyone who has access to a computer and looks on American funds page will also see those exact words. For anyone who sits on the internet complaining about DR but doesn't take the time to look things up then probably not...
Please give me an appropriate link to the American Funds website. Because as a matter of fact, and before I read your post, I did look to see if there were American Funds that obviously aligned with his category names. I expected them to be easily identifiable. After all, for "growth," the "American Growth Fund of America" is so famous that I know it anyway.

I'd always thought that he was referring to specific American Funds under the guise of supposed categories--the equivalent of talking about Vanguard funds and saying "I recommend 'a' capital opportunity fund, 'a' strategic small-cap equity fund, 'an' international explorer fund, and 'a' primecap fund."

But I did go to the American Funds website, and I did not see obvious matchups, either in fund names or in their category names.

For example, they do not give an "aggressive growth" category, nor do they have any mutual fund with "aggressive" in its name. And "international" isn't one of their fund categories, either.

On this page I see:

Image

and if click on the "ALL 7 GROWTH FUNDS" link, I don't see any "aggressive growth" fund:

Image
Yes, you seem to be correct. I recall the site differently. Clearly Growth and Growth and Income are the two categories on the American site. For some reason I thought they had the other 2 categories. But looks like not. They have some International funds under each of the two categories but not a separate category. And seems they don't really have much in the small cap (aggressive growth) category except one International small cap fund.

Now I'm wondering why he has stuck with those labels for so long (I had thought it was to match American funds). The words Growth and Growth and Income seem too similar to American funds to be a coincidence in my opinion. So I wonder where the other categories come from.

I've never read his books (just listen to the podcasts for enjoyment) and I wonder if he explains it more there but he has in the past done special segments on investing where he explains what he means by those 4 categories with names we all know (small cap, S&P500 or large cap, mid cap, etc).

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by deltaneutral83 » Thu Jun 14, 2018 1:46 pm

A Ramsey portfolio at AF's is: AMCPX/AGTHX/AIVSX/AMRMX/NEWFX/ANWPX/SMCWX/CWGIX.

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by nisiprius » Thu Jun 14, 2018 1:58 pm

Nate79 wrote:
Thu Jun 14, 2018 10:03 am
...Now I'm wondering why he has stuck with those labels for so long (I had thought it was to match American funds). The words Growth and Growth and Income seem too similar to American funds to be a coincidence in my opinion. So I wonder where the other categories come from.
Me, too. To everything you said.
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by nisiprius » Thu Jun 14, 2018 2:09 pm

deltaneutral83 wrote:
Thu Jun 14, 2018 1:46 pm
A Ramsey portfolio at AF's is: AMCPX/AGTHX/AIVSX/AMRMX/NEWFX/ANWPX/SMCWX/CWGIX.
What's your authority for that?

Can you point us to something on Ramsey's site (or the American Funds site) that says that this is the Ramsey portfolio? And could you please tell me which of Ramsey's four categories (Aggressive Growth, Growth, Growth & Income, International) each of these falls into, and what the allocation to each fund is (obviously it can't be 25% to each)

AMCPX = AMCAP fund = ??????
AGTHX = American Growth Fund of America = Growth
AIVSX = American Funds Investment Company of America = Growth & Income
NEWFX = American Funds New World Fund = ????? (This one is, specifically, emerging markets stock)
ANWPX = American Funds New Perspective Fund = (Again, not "international" because it includes both US and international)
SMCWX = American Funds SMALLCAP World Fund = ??? What? It's not "international" because it's half US).
CWGIX = American Funds Capital World Growth and Income Fund = Grown & Income

Which of these is, or are, his "aggressive growth funds?"
Which of these is, or are, his "international" funds?

How do these funds fit into his recommended framework?

How to Invest in the Right Mix of Mutual Funds
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by JoMoney » Thu Jun 14, 2018 2:27 pm

What Ramsey describes, especially with regard to "Aggressive Growth" and "Growth and Income" were styles and names for funds I remember seeing as options in my 401k 20+ years ago.
I figured he just never caught up with modern times, and naming conventions, and is stuck in a mindset that was probably taught to him when he got his degree in finance (he graduated in 1982).
Doubtful he makes any specific fund recommendations, as he mainly plugs for people to talk to his "Endorsed Local Providers", which I would expect to be commission based fund salesmen, that will describe whatever they're offering as something that matches Dave's style recommendation.
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by willthrill81 » Thu Jun 14, 2018 3:06 pm

JoMoney wrote:
Thu Jun 14, 2018 2:27 pm
What Ramsey describes, especially with regard to "Aggressive Growth" and "Growth and Income" were styles and names for funds I remember seeing as options in my 401k 20+ years ago.
I figured he just never caught up with modern times, and naming conventions, and is stuck in a mindset that was probably taught to him when he got his degree in finance (he graduated in 1982).
:thumbsup

I think you're spot on. I suspect that this underlies his espousal of 8% withdrawals as well as that was 'common knowledge' before Bengen's study in 1994.
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Re: Interesting video from Ramsey today

Post by LonScott » Thu Jun 14, 2018 3:57 pm

Ramsey's firm charges advisers/Tax/Real Estate a fee to be an Endorsed Local Provider (ELP). For that reason, all his investment ELPs are brokers that sell American Funds. Also they have to take every client that is sent, no account minimum. While American Funds are ok, since his ELP kickback scheme is not in the open show how untransparent (and other adjectives) he really is.

willthrill81 wrote:
Mon Jun 11, 2018 3:09 pm
anonsdca wrote:
Mon Jun 11, 2018 3:02 pm
willthrill81 wrote:
Mon Jun 11, 2018 2:56 pm
nedsaid wrote:
Mon Jun 11, 2018 1:50 pm
Indexing will assure that your investments will be in the top quartile of funds over time. Hold on long enough, your investments will be in the top 10% of funds. Pretty much a no brainer and you can do this without knowing in advance who will beat the market.
I think that Ramsey and other stock-picking advocates don't acknowledge that even if their probability of outperforming the index is 50% (which history says it isn't), their upside potential is very likely a lot smaller than their downside risk (i.e. you're not going to dramatically outperform the index, but you could dramatically underperform it).

Ramsay really strikes me as the kind of person who refuses to learn. His condescension toward virtually the entire academic community, never mind Bogleheads, is truly astounding. The fact that he still espouses 8% withdrawals alone is enough to make me completely avoid listening to anything he has to say.
LOL, what does he have to learn? He has his system and its made him a multi-millionaire. I don't follow DR's investment concepts, but jeeze, he doesn't need to change a thing for himself.
His 'system' was selling books. That's how he got his wealth.

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Re: Interesting video from Ramsey today

Post by Nate79 » Thu Jun 14, 2018 5:36 pm

LonScott wrote:
Thu Jun 14, 2018 3:57 pm
Ramsey's firm charges advisers/Tax/Real Estate a fee to be an Endorsed Local Provider (ELP). For that reason, all his investment ELPs are brokers that sell American Funds. Also they have to take every client that is sent, no account minimum. While American Funds are ok, since his ELP kickback scheme is not in the open show how untransparent (and other adjectives) he really is.

willthrill81 wrote:
Mon Jun 11, 2018 3:09 pm
anonsdca wrote:
Mon Jun 11, 2018 3:02 pm
willthrill81 wrote:
Mon Jun 11, 2018 2:56 pm
nedsaid wrote:
Mon Jun 11, 2018 1:50 pm
Indexing will assure that your investments will be in the top quartile of funds over time. Hold on long enough, your investments will be in the top 10% of funds. Pretty much a no brainer and you can do this without knowing in advance who will beat the market.
I think that Ramsey and other stock-picking advocates don't acknowledge that even if their probability of outperforming the index is 50% (which history says it isn't), their upside potential is very likely a lot smaller than their downside risk (i.e. you're not going to dramatically outperform the index, but you could dramatically underperform it).

Ramsay really strikes me as the kind of person who refuses to learn. His condescension toward virtually the entire academic community, never mind Bogleheads, is truly astounding. The fact that he still espouses 8% withdrawals alone is enough to make me completely avoid listening to anything he has to say.
LOL, what does he have to learn? He has his system and its made him a multi-millionaire. I don't follow DR's investment concepts, but jeeze, he doesn't need to change a thing for himself.
His 'system' was selling books. That's how he got his wealth.
This is not true. It is mentioned on his show all the time that the ELP pays an endorsement fee to be in his program.

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by LonScott » Thu Jun 14, 2018 5:59 pm

@ Nate79 My mistake. However, I think many listeners feel they are getting objective advice when they are not, especially when it comes to investment advice. The ELP program has many issues. http://www.investmentnews.com/article/2 ... 14-but-not

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Re: Interesting video from Ramsey today

Post by Grt2bOutdoors » Thu Jun 14, 2018 6:05 pm

Nate79 wrote:
Thu Jun 14, 2018 5:36 pm
LonScott wrote:
Thu Jun 14, 2018 3:57 pm
Ramsey's firm charges advisers/Tax/Real Estate a fee to be an Endorsed Local Provider (ELP). For that reason, all his investment ELPs are brokers that sell American Funds. Also they have to take every client that is sent, no account minimum. While American Funds are ok, since his ELP kickback scheme is not in the open show how untransparent (and other adjectives) he really is.

willthrill81 wrote:
Mon Jun 11, 2018 3:09 pm
anonsdca wrote:
Mon Jun 11, 2018 3:02 pm
willthrill81 wrote:
Mon Jun 11, 2018 2:56 pm


I think that Ramsey and other stock-picking advocates don't acknowledge that even if their probability of outperforming the index is 50% (which history says it isn't), their upside potential is very likely a lot smaller than their downside risk (i.e. you're not going to dramatically outperform the index, but you could dramatically underperform it).

Ramsay really strikes me as the kind of person who refuses to learn. His condescension toward virtually the entire academic community, never mind Bogleheads, is truly astounding. The fact that he still espouses 8% withdrawals alone is enough to make me completely avoid listening to anything he has to say.
LOL, what does he have to learn? He has his system and its made him a multi-millionaire. I don't follow DR's investment concepts, but jeeze, he doesn't need to change a thing for himself.
His 'system' was selling books. That's how he got his wealth.
This is not true. It is mentioned on his show all the time that the ELP pays an endorsement fee to be in his program.
He also says that DR firm personally vets all of the providers in his SmartVestor Pro network. Of course to belong to this network you have to pay DR too. Someone using logic might see the connection, pay to play. Don’t pay, excluded from the party.
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by Pajamas » Thu Jun 14, 2018 6:05 pm

goblue100 wrote:
Wed Jun 13, 2018 3:29 pm
If you do two years at community college and two years at USC what does your diploma say and what did the degree cost? I don't know the best nursing schools in California, and don't really care, but $120,000 for an education that could easily be had for a fourth of that is expensive. And about a year after you get your first job what your diploma has on it doesn't matter anyway.
Why buy a Lamborghini when a Toyota will get you back and forth to work?
willthrill81 wrote:
Wed Jun 13, 2018 3:46 pm
I'm inclined to agree. I not an expert in nursing, but university prestige seems very unlikely to carry any significant weight at 90% or more of the hospitals, clinics, etc. that I've seen. As long as the degree-granting institution is accredited and recognized by the state of practice, most employers would be more than satisfied.
Just want to point out that there are various types of degree programs that lead to licensure as a registered nurse. There are associate degree programs, baccalaureate programs, and master's programs. Some of them are programs specifically for second-career people with a bachelors degree in another field or for military medics or people licensed as an LPN.

Here are the nursing schools in California, for example:

http://www.rn.ca.gov/education/rnprograms.shtml

It's true that an RN is an RN but some institutions hire only RNs with a bachelor's degree or higher or require nurses with an associate degree to get a bachelor's degree. Pay is also increased for higher degrees. The actual nursing school doesn't matter so much for employment but may matter for getting into a master's or doctorate level program and obviously is important for employment in academic settings or for leadership positions at major organizations.

Bottom line is that Dave Ramsey is right that spending $120k to get a degree in nursing is not advisable unless it is easily affordable. Yes, there are plenty of nurses attending expensive schools (such as NYU and Colombia locally) and nurses can afford to repay student loans, but it's certainly not necessary to take on a lot of debt to become a nurse and it's not going to make that much difference for most nurses. (Certainly the quality of education may be better at some of the more expensive schools but whether that is worth it has been debated on Bogleheads extensively already.)
Last edited by Pajamas on Thu Jun 14, 2018 6:18 pm, edited 1 time in total.

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by GoldStar » Thu Jun 14, 2018 6:15 pm

I'm relatively new here - find it confusing that a Boglehead is posting a Ramsey video as "interesting".

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by Pajamas » Thu Jun 14, 2018 6:17 pm

GoldStar wrote:
Thu Jun 14, 2018 6:15 pm
I'm relatively new here - find it confusing that a Boglehead is posting a Ramsey video as "interesting".
If you search for "Ramsey" on the website and read some of the previous discussions about him, you'll understand! "Controversial" might be a more accurate word than "interesting". :D

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Re: Interesting video from Ramsey today

Post by Nate79 » Thu Jun 14, 2018 6:19 pm

Grt2bOutdoors wrote:
Thu Jun 14, 2018 6:05 pm
Nate79 wrote:
Thu Jun 14, 2018 5:36 pm
LonScott wrote:
Thu Jun 14, 2018 3:57 pm
Ramsey's firm charges advisers/Tax/Real Estate a fee to be an Endorsed Local Provider (ELP). For that reason, all his investment ELPs are brokers that sell American Funds. Also they have to take every client that is sent, no account minimum. While American Funds are ok, since his ELP kickback scheme is not in the open show how untransparent (and other adjectives) he really is.

willthrill81 wrote:
Mon Jun 11, 2018 3:09 pm
anonsdca wrote:
Mon Jun 11, 2018 3:02 pm


LOL, what does he have to learn? He has his system and its made him a multi-millionaire. I don't follow DR's investment concepts, but jeeze, he doesn't need to change a thing for himself.
His 'system' was selling books. That's how he got his wealth.
This is not true. It is mentioned on his show all the time that the ELP pays an endorsement fee to be in his program.
He also says that DR firm personally vets all of the providers in his SmartVestor Pro network. Of course to belong to this network you have to pay DR too. Someone using logic might see the connection, pay to play. Don’t pay, excluded from the party.
There was an amusing show once where a poster said that one of the SmartVestors had recommended an annuity. I should find the video because listening to the podcast you could tell DR was not happy and he asked the poster to stay on the line so they could get the name of the SmartVestor. It was no joke moment... I'm sure the look on DR's face would have been classic.

I remember finding some posts online where FA's were talking about joining the DR network. The general consensus was it was very difficult - DR team is extremely strict and his SmartVestors are not allowed to deviate. The other issue about ensuring they take all customers, no matter how small as well as adhering to the DR requirements put financial strain on the FA's (I'm sure these were not boglehead FA's.... it was just an online thread somewhere I found). The SmartVestor's have to strictly adhere to DR investment advice - no annuities, no permanent insurance, no churning, buy and hold only, generally only 4 funds needed, no special funds, no salesman tactics, etc. Any deviation and they get reported (not to mention that DR investing advice is so simple they can't get away with much funny business). Also the cost of the endorsement was not small and it takes a lot of clients to overcome that cost and they didn't like that..... I also got the feeling that his SmartVestor's are mostly independants, for sure not a name brand chain like EJ.

He also recommends no load S&P500 index fund such as Vanguard for taxable accounts which makes me wonder if this would be outside of a SmartVestor's control (perhaps not, it would be under AUM model?). Not sure about that.

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by Nate79 » Thu Jun 14, 2018 6:24 pm

While I have no need and would never hire one of his SmartVestor's (we use index funds and there is no way I'm paying loads and AUM) but I am going to check out his real estate ELP's the next time we need to sell our house. He always talks about them being high octane agents only. That they don't allow low volume sellers and newbies into their real estate ELP program. At least I would like to interview them and see if it is really true. When we sold our last home I wasn't really pleased with the real estate agents we interviewed. It was a relocation for a job and the agents were recommended by the relocation company. They were not exactly high octane and I won't make that mistake again.

The idea of a vetted real estate agent is appealing if true. Especially since the number of times I ever plan to sell/buy a house is so infrequent I wouldn't know where to start to pick out the best agent.

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by Grt2bOutdoors » Thu Jun 14, 2018 7:23 pm

Lower the price enough that you generate traffic and you too can sell a house. What I’d like to know is if the sellers are happy to get that price or just want to offload the house.
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by nedsaid » Thu Jun 14, 2018 11:49 pm

welderwannabe wrote:
Wed Jun 13, 2018 12:41 pm
He is getting a lot of people to clean up their debt and start investing. His 'show' is entertaining and uplifting. If his followers follow his advice and do active funds, most would be far better off than if they never ran into him to begin with.
Except that the American Funds that he recommends have done quite well even after paying the loads. Certainly, indexing is hard to beat and Vanguard has cheaper and perhaps better alternatives even for active funds. Another area of disagreement is advising 100% stocks for investment accounts, way too aggressive for me. I also think that 12% a year is too much to expect from the stock market.
A fool and his money are good for business.

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privatefarmer
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by privatefarmer » Fri Jun 15, 2018 12:47 am

what really erks me is that those who would follow DRs investing advice are novices and don't know any better. He can spout off garbage about "average" returns completely ignoring CAGR and 99% of the population wouldn't know the difference. He can spout off garbage about the track records of the growth funds he promotes, totally ignoring historical data regarding value vs growth. He never talks about fees yet does discuss the impact of just an extra 1% in fund return each year... anyhow its a shame people listen to him for investing advice.

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by WanderingDoc » Fri Jun 15, 2018 1:05 am

Grt2bOutdoors wrote:
Wed Jun 13, 2018 1:20 pm
welderwannabe wrote:
Wed Jun 13, 2018 12:41 pm
He is getting a lot of people to clean up their debt and start investing. His 'show' is entertaining and uplifting. If his followers follow his advice and do active funds, most would be far better off than if they never ran into him to begin with.
I just heard a podcast where he advised a young caller who had no money not to take out $120k in student loans to become a registered nurse in LA. I think that was poor advice.
He also said on several occasions every multi-millionaire got that way without debt. Really? More than 90% of wealthy real estate investors use debt. All the wealthiest (9-figure) exclusively use debt. Ramsey makes some outlandish statements. I don't know what's worse, that or the expected 13% S&P return.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by Grt2bOutdoors » Fri Jun 15, 2018 6:32 am

nedsaid wrote:
Thu Jun 14, 2018 11:49 pm
welderwannabe wrote:
Wed Jun 13, 2018 12:41 pm
He is getting a lot of people to clean up their debt and start investing. His 'show' is entertaining and uplifting. If his followers follow his advice and do active funds, most would be far better off than if they never ran into him to begin with.
Except that the American Funds that he recommends have done quite well even after paying the loads. Certainly, indexing is hard to beat and Vanguard has cheaper and perhaps better alternatives even for active funds. Another area of disagreement is advising 100% stocks for investment accounts, way too aggressive for me. I also think that 12% a year is too much to expect from the stock market.
One of my investment accounts is 100% equity, I have other accounts that hold fixed income. If we looked solely at the equity only portion the annual returns over the last 7 years has been exactly 12%, holding an 80/20 mix of total stock and total international. So yes, you can earn 12%, but the ride is volatile.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Jags4186
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Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

Post by Jags4186 » Fri Jun 15, 2018 6:49 am

There are several misconceptions on what Dave Ramsey says. Just to clear up a few things:

Dave recommends *no* savings until you are out of consumer debt, even passing up 401k matches.

Dave recommends active funds in tax deferred/tax free accounts, but he also admittedly uses an S&P 500 index fund in his taxable account--ostensibly for tax efficiency. Most people who call in are not ready, or never going to be ready to invest in a taxable account therefore he rarely discusses this. When he does discuss it it usually goes something like this:

"When I'm saving up to buy a piece of real estate, I pile money into an S&P 500 fund until I have enough to buy the property I want".

Dave Ramsey recommends saving 15% once you are consumer debt free and while you pay off your mortgage. Once you pay off your mortgage his final step is "to save as much as possible and become very wealthy".

Now, Dave of course recommends no bonds. But while he may give some borrower slave to lender nonsense why bonds aren't good, from his world view he has "sort of" bonds in the form of paid in full rental real estate. If you own clear and free properties throwing off income, you don't necessarily need bonds if you have the appropriate cash cushion. It may not be out of line to hold no bonds if you had say $100,000 in cash, 4 rental properties, and a 100% stock portfolio. There are wealthy people who call in who are in that situation.

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