i have come to the conclusion that 90% of all adult humans are incapable of handling money.

Ex., You ever finance a car? Then you incapable of handling money.

That is all i have to say on this topic.

 

For a lot of people credit is a cancer. We live in a society of buy now pay later. People think that as long as they make the minimum monthly payment on their CC's everything is hunky dory. Eventually it catches up with people and then they are screwed.

 

Karnaj:

You are correct, for some people, credit IS a cancer.......but not always, and not to everyone!!

This is where Dave Ramsey and I part company to a certain extent.

Take the issue of buying a home;

Dave says "15 yr. Fixed Rate Mortgage, with 20 " down, and with full contributions to your 401K plan.

That works quite well for above average income earners, but when weighed against the propensity of existing homes to rise in value, along with increasing construction costs of new homes, many people would forever be left like a cat chasing it's tale. There are simply too many people who would never reach the point of being able to but.

Now as a Real estate Broker, I DO, in fact, encourage people to look not only at monthly payments, but also additional lattitude for tax and insurance increases in the next five years and beyond.


Where Dave and I DO agree??

As far as ARM's, Interest Only Financing?? Negative Equity Financing??
Absolutely!!

Contracts For Deeds?? NEVER, NEVER, NEVER!!

Hey, I do lose a few potentioal clients each year, but I do require them to sit and listen to me lecture about those pitfalls before they make any decisions!!

Cars??

Dave says CASH ONLY!!

I SAY:
A good, late model pre-owned, with low mileage, with sufficient down payment to avoid negative equity.

For those who can't buy that way, I do recommend Negative Equity Insurance!!

The most important thing for people to remember is that when you take on debt of ANY kind, you are, in fact, handing some degree of control in your life, in the present and in the future, over to someone else; often, a faceless institution, who cares NOTHING about you except whether you make your payment on time.

You are handing your money, and your control, over to someone who cares NOTHING about helping you build a foundation, and a future of prosperity and financial strength!!

 

I agree. But credit cards are a good tool if you use them right. I use a credit card to pay for everything and I never carry cash. When I carry cash I am more likely to spend small amounts more often and after 30 days it can add up to hundreds. I hate using a credit card to pay for 3 dollars worth of stuff so I tend not to buy things I don't really need. I also use a credit card to pay my bills so when I get a statement I can see exactly how much I spent. My check goes right into my checking account and I make 1 payment at the end of the month to my credit card company. If you pay the entire amount it's interest free plus I also get enough payback points to to take my family on a free vacation.

I just don't agree with Ramsey's idea that you should pay cash for everything. If you never use credit and pay cash for everything your FICA score will go to the toilet and that will keep you from getting the house you want or a car that you want. Also having a low FICA score can keep you from getting a good job. Roadway pulled my credit when I was hired and if you have a low score they will not hire you.

Everyone has an opinion and I don't have the same opinion as Dave Ramsey. Dave Ramsey doesn't want you to succeed, if you succeed and become debt free or become responsible with credit he doesn't have an income.

Ramsey interview

Q: Did you ever think someone could become famous giving advice like, “spend less than you make”?

A: It turns out common sense is marketable.If they ever wise up, I’m out of business. (admission by Ramsey that his listeners are not wise)

 

Ben:
To some degree, I can offer you some elememt of agreement, although to a very limited extent.

Yes, for the vast majority of people, home ownership entails carrying a certain amount of debt; yet, a home is (hopefully!!....but NOT always), an appreciating asset.

Cars?

Nice cars?? This is where people set themselves up for trouble.

A car is for transporting someone from point A to point B, and to do it safeley and reliably.

There IS some place for carefully managed debt; but it should be kept to a minimum.

One of our biggest problems here in America is that the vast majority of people DO NOT live in a state of true prosperity!!!!....
.....Rather, they live at an upwardly mobile level of poverty!!

They hand control of their lives over to others, to buy depreciating assets and material things that become worth less every day, all while the interest payments continue to cost them more everyday.

 

You don't have to go into debt to have nice things. You don't have to go into debt to have a nice car. You can save your money until you can afford to pay cash for a nice car. It may not be exactly what you want right now, but you can always trade up. Basically, a car is nothing but transportation. You don't need a big expensive car to have good dependable transportation. When you finance a car and finance it, you are mostly paying interest for the first 1/3 of the loan, according to a lender I spoke with a few years ago. The reason people get into such financial trouble is because they don't want to wait until they can afford things. They would prefer to pay 1/3 or more for a product to have it now than wait until they can afford to pay cash. A house is a very large investment. It is difficult for most people to save enough to pay cash. However, imagine if you bought a house and had no other debt. You could pay a higher payment and have it paid for in a fraction of the time than if you paid over 30 years. Just paying 13 payments per year will dramatically lower the time it takes to pay the house off and you would save a fortune in interest payments. The problem comes in when people buy more house than they need or can afford. Instead of buying a smaller house that they can afford, they buy a big house that they can't afford. There is a good way to determine whether you can afford something. Just look in your wallet. If you have enough cash to make the purchase you can afford it. If you need to rely on credit to make a purchase, you can't afford it. You may think Dave Ramsey is crazy, but if everyone took his advice, they would be much happier and not be working to pay interest on their credit cards.

 

That must be one of the stupidest remarks I've ever heard. :roll:

Have you ever heard of a thing called "sense of humor" or being "witty." I used to say when working in EMS, "if everyone had common sense we'd be out of business." Did I really mean that? NO!

 

I've never paid for anything from Dave Ramsey. EVER heard of a libary? He is on my radio I already had before I knew of him. So he isn't the reason I subscribe to sirius. I've gotten all his advice for free.
Also if you listen to him. Alot of people that call in that can't afford his FPU or his book. He gives it to them for FREE. What a bad man. How dare he try to help people.
All of you downing him can go on paying your interest. As for me I will be debt free soon.
Also you can get a morgage without a fico score. Its called manual underwriting.
My dad pasted away this past Feb. His last 10 years of his life were dredful. He was broke. He had no savings and lived on Disablilty. A whopping 933.00 a month. He rented and barely bought his medications. I have piles of medical bills and credit card bills to prove this.
After seeing him go through this I vowed Not to let myself live that way.
My dad was a Hard working man. If it was daylight he was working. He done heating and air all of his life and had nothing to show for it. So you sit there and say you can't take it with you all you want. You will end up just like him.
I will say this I don't put myself out there like this very much. I expect to hear nothing bad about my father. If you wanna talk junk about me thats fine. I haven't gotten over him being gone. So please make your comments but leave him out of your post.

 

frist Mattangcobra i don't remember if i told you at the time but sorry for your lost i know how much you miss him. and i for one would NEVER speak ill of him

as to the rest the think Dave Ramsey is full of it

07.09.99 i hit a car with my yanaha on I-5 in seattle and couldn't work for 3 1/2 months could walk for 2 of that, i had to stay with firends as my house wasn't wheelchair frendly. he had no Insurance and i was under insured. no income for 3 1/2 months yet i paid all my bills for my house and helped my firends with rent & food and i didn't go into debt to do it.! how you ask well i had this little thing called MONEY in the bank.

last year for my stepson's birthday (he was doing good in school) he has always wanted a nice car so i found him one and took it down and had a very nice stereo put into it(he likes that hip-hop rap crap) so now he's driving around in a very nice Cadillac STS and it was paid for when i gave it to him. real money is a wonderful thing to have

yes we are debt free house, land, cars, trucks, vans, boat, 4 wheeler. and we have money in the bank and if we see something we like we have the money to just buy it.

but if you don't think you can live debt free then take you other half out for a nice dinner and put it on your CC odds are YOU will still be paying for that dinner on your CC after thy have found someone that can handle and save money.

btw the wife is getting a mustang gt or a 4x4 ram for her birthday next year shhhhhhhh and yes it will be paid for.

 

Useless:
Sure you are, and in more than one respect!!

First:
The people who turn to Dave Ramsey are dealing with financial problems caused by any number of issues:

1.) Improper, and/or excessive use and/or abuse of credit......
Over-extending themselves with homes which are larger/nicer than what they nee, wanting to, as you suggest, drive "nice cars", which often entails "Champaign tastes on a berr budget"

2.) Unexpected change in financial circumstances; job loss of one or both spouses

3.) Medical Catastrophe; Injury, Prolonged Disability, protracted illness or disease of a child, spouse, patent, or other family member which not only costs in terms of direct care requirements, but also in terms of time of from work, transportation costs, etc.

Medical Catastrophy, is the Number 1 cause of bankruptcies in America!!

4.) Natural Disasters; hurricanes, floods, tornadoes

5.) Addictions; substance abuse, and/or behavioral addictions, such as gambling, compulsive shopping, etc.

6.) Dishonesty; One spouse opening up charge accounts, taking out "Pay Day" loans (which should be outlawed, IMO) or assuming other forms of debt without a apouse's knowledge or consent. Another example would be a spouse who vacuums out the bank acount(s), takes the money, and runs.......seen it happen too many times. That, BTW, CAN be prevented through proper financial plannning and management.

7.) Divorce, which often leaves the spouse with lesser earning capacity saddles with debt that is viewed by the courts to be joint and several.

..........and the list goes on and on!!

People call Dave Ramsey because they need help; now, you are suggesting that Ramsey is a crook preying upon people by offering advice and tools to help them deal with their situations..

That's like going to see your doctor when you are sick then blaming him/her for "preying upon sick people".

Okay, so everything is good in your world, Debt and all!!

Great!! But for you, there are many others out there in need of help.

Second:
What leaves me curious is that if you don't need Dave's help, then why do you have an axe to grind here?? I can understand a certain degree of ambivalence on your part, even a certain degree of apathy in regards to Dave Ramsey, and/or Financial Peace University.

So, just what is it that drives your antagonism here?? It can't be sympathy for the people who call Dave, asking him for help, because you have offered them nothing better.

So, if all is so good in your world, as you claim it is, then why should any of this matter to you??