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I often listen to this guy's radio show. I'm not particularly following his saving & investing plan, but it's inspiring to hear testimonials from people who work themselves out of the debt, on ordinary incomes, in this slow economy.

I prefer this guy:

http://www.mrmoneymustache.com/2011/05/ ... ve-ramsey/

There's a fair amount of cross pollination between the company I work for and his in TN. My boss' daughter works for Ramsey and his name keeps popping up amongst friends trying to get their finances under control.

Does he really yell at his listeners a lot? I don't think he's actually on in Maryland, though I've never checked.

I rarely hear Ramsey yell. But the ads for his show feature him at maximum bombast.


Is this representative of Mr. Moustache's approach?
http://www.mrmoneymustache.com/2012/10/ ... o-kickass/

I listened to the Total Money Makeover audio book and liked it alot. We're following it to get out of a little debt although we're not going the full on selling a bunch of stuff route. It seems really good, simple and logical. I haven't listened to his radio show, though.

johno wrote:I often listen to this guy's radio show. I'm not particularly following his saving & investing plan, but it's inspiring to hear testimonials from people who work themselves out of the debt, on ordinary incomes, in this slow economy.

I like bootstrapping stories. His advice about cars is unbelievably bad, which makes me suspect it's all pretty terrible.

johno wrote:I rarely hear Ramsey yell. But the ads for his show feature him at maximum bombast.


Is this representative of Mr. Moustache's approach?
http://www.mrmoneymustache.com/2012/10/ ... o-kickass/

Pretty much, stripping away his bombastic nature, obsession with bikes and being, well, Canadian: ruthlessly go after your costs and save, save, save.

This might be a better summary:

http://www.mrmoneymustache.com/2012/06/ ... -per-year/

Grandpa's Spells wrote:

johno wrote:I often listen to this guy's radio show. I'm not particularly following his saving & investing plan, but it's inspiring to hear testimonials from people who work themselves out of the debt, on ordinary incomes, in this slow economy.

I like bootstrapping stories. His advice about cars is unbelievably bad, which makes me suspect it's all pretty terrible.

I'm curious to hear what's bad about his advice.

Grandpa's Spells wrote: I like bootstrapping stories. His advice about cars is unbelievably bad, which makes me suspect it's all pretty terrible.

From what I recall, he has people drive beaters until they have paid off consumer debt. That's good advice.
I would qualify that with, "Buy beaters with decent ratings from Consumer Reports."

Freki wrote: This might be a better summary:

http://www.mrmoneymustache.com/2012/06/ ... -per-year/

Thanks. I've read a few of his articles & like much of what he has to say. He seems like a combo of Ferriss (design a quality life) and Ramsey (ruthlessly cut costs, and save).

johno wrote:

Grandpa's Spells wrote: I like bootstrapping stories. His advice about cars is unbelievably bad, which makes me suspect it's all pretty terrible.

From what I recall, he has people drive beaters until they have paid off consumer debt. That's good advice.
I would qualify that with, "Buy beaters with decent ratings from Consumer Reports."

That's exactly what I get from what he says. I don't why that would be considered unbelievably bad.

I used to travel from Detroit to Grand Rapids a lot, and would listen to his show on the drive home.
I've read his books too. He is a little to radical for me on some things, like credit cards. He says to cut them all up and never have one.
Otherwise his philosophy is basically his "baby steps" - with an overriding theme of live on less than you make, and plan a monthly budget.

Step 1 - save up a "baby emergency fund" of $1000
Step 2 - pay off your debts (except mortgage) smallest to largest. Using a "debt snowball" you pay minimums on all debt but the smallest, and put everything you can on the smallest, once that is paid off, put everything you were paying into the next smallest, etc. - This is contrary to what most others recommend when they say to pay the highest interest debt first.
Step 3 - save 3 to 6 months living expenses in an emergency fund
Step 4 - Invest 15% of income for retirement (he recommends Roth IRA or roth 401K) and invest in 4 types of mutual funds (growth, growth and income, international and one other I forget) -If your company has a non roth 401K, he says to use that to get any match then go roth IRA on your own.
Step 5 - Save for kids college (if applicable)
Step 6 - Pay off home early
Step 7 - Build wealth and live debt free.

I would say Dave Ramsey and Mr Moustache are quite different philosophically. One is more hippy and wants to live as inexpensively as possible, doesn't use a budget, to be able to do what he wants to do. The other wants people to budget all the time, and bust their ass to do what they want to do, much more corporate ladder type.

msr2112 wrote:

Grandpa's Spells wrote:

johno wrote:I often listen to this guy's radio show. I'm not particularly following his saving & investing plan, but it's inspiring to hear testimonials from people who work themselves out of the debt, on ordinary incomes, in this slow economy.

I like bootstrapping stories. His advice about cars is unbelievably bad, which makes me suspect it's all pretty terrible.

I'm curious to hear what's bad about his advice.

Here is a video summing up his philosophy:
http://www.daveramsey.com/articles/arti ... tomobiles/

Here's what it says. The average car payment is $475/mo. If you own a $1500 car, and instead of driving a new car, keep driving it for 10 months, while socking away $475 in payments, you can sell your car and you'll have $6250 to buy a major upgrade of a vehicle. You can repeat this process for a year and buy an $11k car. Then you reap mad stacks of $$$ which give you free cars forever.

The problem is, it's bullshit. His cars don't depreciate (the $1500 might not much, but the $6k will). The $1500 car is going to suffer from poorer fuel economy and reliability than a newer one. This is why all analysis on cost of ownership relies heavily on factors other than your car payment (though payment is important). Driving a beater has money leaking out in other ways. People who are budget conscious also aren't considering cars with $475/mo. in payments, so he's offering a false alternative.

In short, the newer cars people would be more likely to buy would be much cheaper than what he suggests, and the amount saved by driving beaters would absolutely be less than he suggests. So the scenario of free cars forever he depicts will never materialize in remotely close to the timeframe he claims.

johno wrote:

Freki wrote: This might be a better summary:

http://www.mrmoneymustache.com/2012/06/ ... -per-year/

Thanks. I've read a few of his articles & like much of what he has to say. He seems like a combo of Ferriss (design a quality life) and Ramsey (ruthlessly cut costs, and save).

Yeah, he likes Ferris (or did, he does reevaluate things), there's an article on there about Ferris if you poke around.

http://www.mrmoneymustache.com/all-the- ... g-of-time/

That has all of them in order. I find him entertaining and has a thought provoking perspective on things. I was surprised at one point when I read their budget had a CrossFit habit for the Mrs. was included. A while later he built a place for her to do that at home.

I like Ramsey and have his TMM book and have started following his plan. I accrued a bunch of debt when I got laid off a few years ago and my wife was still in nursing school. I'm about to start putting in applications fir a weekend job too.

Grandpa's Spells wrote:...

Driving a beater has money leaking out in other ways. People who are budget conscious also aren't considering cars with $475/mo. in payments, so he's offering a false alternative.

In short, the newer cars people would be more likely to buy would be much cheaper than what he suggests, and the amount saved by driving beaters would absolutely be less than he suggests. So the scenario of free cars forever he depicts will never materialize in remotely close to the timeframe he claims.

IMO, you are quibbling with Ramsey's example and missing his point. There are so many moving parts to the pros/cons of car buying that we could argue ad infinitum. For example, I strongly value safety. Our higher fuel cost is the insurance premium my family pays to lower the risk of serious injury. It's worth it.

Anyhow, many of Ramsey's callers are not "budget conscious," and often are buried under mountains of debt, especially student loan debt. And they blithely step into new car purchases...that is their normal. And think they need to upgrade to a new car every two years. That is the mentality that Ramsey challenges, promoting a frugality ethic. (Sometimes to the extreme.)

I look at my April Consumer Report mag, and they recommend plenty of used cars under $10,000. Mostly Toyotas & Hondas. Someone struggling with credit card debt should buy a 10 year old Jap car and drive it til the wheels fall off. Maintenance will usually not be a big problem, and many Toyotas & Hondas are getting 250,000 miles without big problems.
Myself, I bought my Acura for cash when it was 2 years old; now it's 10 years old, with no signs of quitting and no maintenance problems.

*****

Frugality is just half of Ramsey's program - he also pushes people to make more $$$. As Mickey illustrates.

Grandpa's Spells wrote:Here's what it says. The average car payment is $475/mo. If you own a $1500 car, and instead of driving a new car, keep driving it for 10 months, while socking away $475 in payments, you can sell your car and you'll have $6250 to buy a major upgrade of a vehicle. You can repeat this process for a year and buy an $11k car. Then you reap mad stacks of $$$ which give you free cars forever.

The problem is, it's bullshit. His cars don't depreciate (the $1500 might not much, but the $6k will). The $1500 car is going to suffer from poorer fuel economy and reliability than a newer one. This is why all analysis on cost of ownership relies heavily on factors other than your car payment (though payment is important). Driving a beater has money leaking out in other ways. People who are budget conscious also aren't considering cars with $475/mo. in payments, so he's offering a false alternative.

In short, the newer cars people would be more likely to buy would be much cheaper than what he suggests, and the amount saved by driving beaters would absolutely be less than he suggests. So the scenario of free cars forever he depicts will never materialize in remotely close to the timeframe he claims.

IMO it depends on several factors:
1. Where you live (easier to find gently used cars in the suburbs than in urban areas and rural areas)
2. Weather (salted roads do damage)
3. What you know about cars (know how to research and how well can you evaluate the car on your own or get it evaluated)
4. Time frame (how soon do you need a different vehicle)
5. Marriage (when the car needs expensive repair, can you walk away and get another one)

If you are good on all five, it isn't hard to find a beater you can be comfortable with (that gets good gas mileage). A lot of people are not.

You can disagree with the Bible, but Ramsey who is a no apology Christian basically goes by Proverbs 22:7 - The rich ruleth over the poor, and the borrower is servant to the lender.

And even if you choose to disagree with the Bible, it is hard to argue the opposite.

Ramsey is a debt hater. Both having it and taking any on. Having no debt does allow you to post a kiss my ass sign up list on your front door. That last part is not from the Bible BTW.

For most people, his advice is wise.

powerlifter54 wrote:You can disagree with the Bible, but Ramsey who is a no apology Christian basically goes by Proverbs 22:7 - The rich ruleth over the poor, and the borrower is servant to the lender.

And even if you choose to disagree with the Bible, it is hard to argue the opposite.

A little simplistic.

We got a Bible analogy on the first page of this one?

How long til we can get a Team Red vs Team Blue thing going?

Turdacious wrote:

powerlifter54 wrote:You can disagree with the Bible, but Ramsey who is a no apology Christian basically goes by Proverbs 22:7 - The rich ruleth over the poor, and the borrower is servant to the lender.

And even if you choose to disagree with the Bible, it is hard to argue the opposite.

A little simplistic.

Please expand upon your premise.

baffled wrote:We got a Bible analogy on the first page of this one?

If you listen to Ramsey, and i do occasionally, it is hard to miss that his philosophy is based on his faith. Since he says that a lot. FWIW.

powerlifter54 wrote:

Turdacious wrote:

powerlifter54 wrote:You can disagree with the Bible, but Ramsey who is a no apology Christian basically goes by Proverbs 22:7 - The rich ruleth over the poor, and the borrower is servant to the lender.

And even if you choose to disagree with the Bible, it is hard to argue the opposite.

A little simplistic.

Please expand upon your premise.

The Bible also spends a lot of time extolling poverty, see the story of Lazarus and the rich man. I think Ramsey offers great advice, but come on.

Well we can agree to disagree on the rich and the poor and the story of Lazurus, but the key point is the debtor is slave to the lender. Which Dave says about twice every show.

I actually disagree with the level Dave goes to the avoid all debt. But again, for the average schlub who is up to his eyeballs in debt, a super aggressive pay that stuff off program is life changing.

Ask those fools who borrowed money on home equity loans and stated income balloon mortgages in the early 2000s, who had no chance of making the first payment let alone any balloon payment, and are now upside down if they are still in a house they couldn't afford, if they are getting jerked around by their mortgage holder.

Avoid debt. Have a cash emergency fund. Don't buy things you can't afford. Whether you love the baby Jesus or the summer solstice, it is very good advice.

Proverbs? Always gotta turn to the Jews.

Nothing from Jesus to justify greed, I suppose.

Avoiding debt I agree with. Avoiding credit altogether? Not so much.