[astura]

>Dave Ramsey down-talks to his callers as if they were petulant children and tells you to cut up your credit cards. Dave says they are the work of the devil and you aren’t mature enough to use them. Except we used our cards to make $3,624 in spendable cash last year, all while paying zero in interest — because we paid the cards off in full each month.

The big thing you have to know about Dave Ramsey is he has a biblical approach to debt, not practical. God says debt is bad so it should be avoided.

This leads to some odd advice.

Dave advocates working as much as possible during college to avoid student loans but neglects that, in the aggregate, the more hours a student works the poorer their grades and the less likely they will graduate.

He also advocates stopping 401k contributions until you're out of debt (because he believes debt is evil). That's almost never a great move financially if your employer has a decent 401k match. A better idea is to drop anything above the match until high interest debt is paid off.

His advice is very one sized fits all and he does have a point that many people can't control themselves with debt.

I'm really not a fan of the way he talks to his callers calling them stupid either, especially when he doesn't realize he doesn't really understand his caller's situation. He got super belligerent with a woman who didn't know exactly her husband's pay (who was a servicemember) and basically said she needed a marriage counselor because she didn't have an exact figure. (She said "around $xyz") But it seems he doesn't understand a significant portion comes in the form of several different allowances that are tax free and change based on their current orders, POC, and rank, so it's totally normal to have a non-precise figure off the ttopof your head.

[foogazi]

I think there’s a place for Dave Ramsey’s advice. I don’t care for the religious stuff- but the advice is solid to get out of debt

He mostly talks to people that don’t realize the stranglehold debt has on them.

The first step is to acknowledge the problem

[astura]

Yeah, there probably is.

I just don't know that people really understand that his view of finance is biblical based rather than empirical based and advice is extremely one sized fits all.

At the same time it is the kick in the ass that already well-to-do-people with too many Lexusus who are deep in debt probably need. People who don't have much income? Not sure what they are going to get from Ramsey other than shame. These people have a cash flow problem, they don't need to called a moron. Like TFA says, this advice is more about maintaining wealth, not creating it.

(Of course, TFA ignores the risks of starting a business, but that's another topic)

For me, the best thing I ever did in my life was take out loans to live while in college so that I could devote 100% of my time to my studies. It's the only way I would be able to graduate, and I'm glad I didn't worship the altar of Dave Ramsey at the time (or even know who he was) because I really didn't need extra stress or guilt, I put enough on myself. Dave just thinks people like me don't exist - people who take out debt reluctantly after cost-benefit analysis, pay it back ASAP, and who are better off for it.

Of course, God says debt is bad, so Ramsey doesn't care if I exist.

[foogazi]

Personally I feel I got the message - bad debt bad, don’t over-extend, over consume

I still just refinanced into a 30 year mortgage and didn’t pay off the house YMMV

[jurassic]

I'm approaching a $1M net worth, but I still enjoy listening to Dave Ramsey. His advice is a mixed bag but I find the batshit scenarios people call in with pretty entertaining. His own personal rags to riches story helps him remain a relatable and aspirational figure to many despite having a personal 9-figure net worth.

Ramsey's get-out-of-debt advice is top notch because it creates a roadmap that average people can understand enough to follow. His core audience is the people out there who have demonstrated an inability to use debt responsibly. A lot of these people have no understanding of interest rates, budgeting, or any other type of financial planning or analysis beyond "can I afford the payments?". And so they end up saddled with ruinous levels of stupid debt like cars they want but can't afford. Any boglehead will tell you his advice is often far from optimal mathematically, but distilling down into some idiot-proof heuristics that everyone can understand without math (e.g. pay extra on the smallest one) helps more people than it hurts start taking steps in a positive direction.

His stay-out-of-debt advice is meh. You're right he has a stated biblical position against debt, but I think also that's just a nice cover for a convenient simplification in his message. The fact he says mortgage debt is okay shows his anti-debt stance is not a firm biblical line in the sand which it would be if it were truly a spiritual question. He's a wealthy man and has a background in real estate so I'm sure he's aware of the ways that debt can be a wealth creation tool. But unpacking all the details of every "it depends" situation on the air to see whether using debt in that scenario is responsible or not could easily get complicated, and also could confuse the simplistic people who joined his audience for get-out-of-debt advice. So I understand why he wouldn't want to go there, officially, with people who most-of-the-time are looking for someone to help justify taking a debt they know is a bad idea. Furthermore, when a huge percent of young people today are going deep into debt for degrees that won't help them thrive financially, I don't have a problem with him telling people to explore every opportunity to avoid or minimize that debt. Much of his audience is debt-addicted, and he doesn't want to undermine the messages that getting and staying out-of-debt should be a top priority.

Ramsey's investing advice is trash. He's always talking about some amazing unnamed 10%+ annual return mutual funds that you can't learn about in detail without getting in touch with one of his affiliated "Smartvestor Pros". I have no idea if the advice they give out is any good, but that stuff always sets off my snakeoil alarm. Could easily be a lambs to the slaughter situation.

One thing I appreciate about him that I think other gurus underemphasize is the importance of healthy relationships and communication in long term financial health. Tons of his callers have bigger relationship problems than financial problems and I appreciate that he addresses that directly.

> Of course, God says debt is bad, so Ramsey doesn't care if I exist.

I wouldn't take it personally. A person like you who can do a cost-benefit to use debt as a tool is just not his audience.