Dave Ramsey on dvc

[dclpluto]

Dave says don’t buy a stupid timeshare. Bad people selling a bad product. He said he doesn’t recommend any timeshare but he said Disney timeshare is a whole another class of timeshare. He doesn’t have it or any timeshare but talks good of Disney.

 

[bwvBound]

Sorry in advance. My response, "Blah, blah, blah, blah, blah."
Yeah, whatever.

 

[BillPA]

Who is Dave Ramsey? Does he have a claim to fame?

 

[WilsonFlyer]

Who is Dave Ramsey? Does he have a claim to fame?

Apparently he's some god to some people that got wealthy teaching others how to get wealthy by teaching them common sense and charging them big bucks for it.

 

[BillPA]

Ah, a modern carpetbagger.

 

[CookieandOatmeal]

Apparently he's some god to some people that got wealthy teaching others how to get wealthy by teaching them common sense and charging them big bucks for it.

I don't know about techniques to get wealthy but definitely methods to get rid of debt and to stay out of debt. At least that's the perception that I get from reading about him and his believers.

 

[LAX]

Dave says don’t buy a stupid timeshare. Bad people selling a bad product. He said he doesn’t recommend any timeshare but he said Disney timeshare is a whole another class of timeshare. He doesn’t have it or any timeshare but talks good of Disney.

Was he talking about DVC a decade or two ago? Because the DVC being sold today is becoming more like those "stupid timeshares" (the industry standard!).

LAX

 

[Chuck S]

He was more popular a few years ago. He was giving people ways to get out of debt, which debt to pay off first, which debt to forgo if you had to and so forth. He was one of many personal financial gurus that were popular back in the day. He made the talk media circuit, like Oprah, This Morning, etc. He like others on the talk show circuit (Dr. Phil. Dr. Oz, et al) have waned in popularity the last 2 or 3 years.

 

[bwvBound]

@dclpluto ,

Setting my initial sarcasm aside, is there something you wanted to truly talk about concerning timeshare? Do you have questions about DVC ownership?

 

[i<3riviera]

͏

 

[dclpluto]

@dclpluto ,

Setting my initial sarcasm aside, is there something you wanted to truly talk about concerning timeshare? Do you have questions about DVC ownership?

nope been a dvc member almost 20 Years I’m good. Thanks

 

[cruisehopeful]

Interesting comments. I did the Dave Ramsey course a few years ago. At the time, I had over $30K in non mortgage debt and no emergency savings. Now, I have zero non mortgage debt and enough emergency savings for 5 months. It worked excellent for me. Sorry to read that some of you had other experiences. Makes me wonder if you did what they taught? I know someone who told me it didn't work for him, but when I pressed him for details by asking questions like.. Did you snowball your debt payments? Did you make putting $1K in savings your first priority? It sounded like he just sat through the course but didn't do any of the things that were taught. So, it didn't work for him.

 

[we"reofftoneverland]

Dave Ramsey is cool. We listen sometimes on the radio and read his book a long time ago— like20 years. For us he reaffirmed a lot of things we already knew but did not think about. We’ve never followed his program specifically, but we have definitely incorporated a lot of his ideas into our lives. We don’t do car loans because of his show. Even when the dealership tries to force you into a car loan to get a “discount.” Fools game. And his message about slow and steady wins the race is golden. Spend less than you earn= liberating. And student loans! Wow. Haven’t and never will allow our children to take out any student loans. Dh and I did. Just isn’t necessary, even if you’re broke. I love how he points out that the majority of CEOs went to state schools, and I also love how he says young adults should move out of their parents’ homes. Totally agree on that. Leads to dysfunction. When you do not use debt you lead a very different life and you end up wealthy in the end. True. The big piece of his advice that we haven’t followed is no credit cards. I find that one very hard. But we are very conservative with them and do not carry debt. A lot of people do not get this type of information anywhere else, so he really provides a great service.

 

[Grumpy by Birth]

I don't know a lot about Ramsey, but have heard him on the radio a few times over the years while in the car.

I didn't spend a dime on any of his courses, books, seminars, etc, so I can't speak to every facet of what he espouses. But I did employ the "snowball" concept (along with saving and living within our means), and paid off all our credit card debt a few years back (this is one of the reasons we were finally able to afford to buy DVC!).

I think there's certainly some merit in the advice to pay off debt, don't buy things you can't afford, etc.

 

[DVC Doctor]

I have never listened to him either, but IF he recommends people to live below their means, save money for rainy days, invest in the future, avoid debt, avoid revolving credit card payments, pay off high interest loans, be smart about choosing colleges, avoid unnecessary commercialism, then he sounds like someone I would like to meet some day.

 

[DVC Doctor]

Good and not so good advice:

Ramsey supports the debt snowball method, where debtors pay off their lowest balance debt first instead of paying off their highest interest rate debt first. While this approach has been criticized by some, research done by the Kellogg School of Management has found that the debt snowball method is generally effective. The small victories give debtors motivation. A 2016 study by the Harvard Business School found that people who used the snowball method to pay off their smallest account first, paid down more of their debt than those who used other methods.

* I don't have debt, but would advise paying off high interest first, but understand the psychology in small victories. If people get motivated, then this is a win.

Ramsey claims that investors can get a 12% average annual return, which is the rate he uses in financial analyses. Ann Carrns responded that using an average annual return rate is misleading and that the compound annual growth rate is a better measurement for planning investments. Helaine Olen, author of the book "Pound Foolish: Exposing the Dark Side of the Personal Finance Industry" quoted in Yahoo! Finance stated that a 12% return is unrealistically high. According to The Motley Fool, following Ramsey's calculations could cause individuals to be seriously under-invested for retirement.

* I use 5% as my benchmark. If I could get a guaranteed 12%, I would put 100% of everything I own into that investment. (hello Bernie Madoff)

Ramsey recommends investors to hold all their investments in stock mutual funds, but their volatility increases risk compared to bonds. He recommends that retirees withdraw 8% of their retirement fund each year.

* not sure why he advises 8% when the industry average is 4%, but again if he thinks 12% is normal ROI, then 8% = 12% - 4%, so it makes sense, but I think 8% withdraws is BAD advice.

 

[Grumpy by Birth]

As I said, I'm not really a "follower" and don't know much about the details of Ramsey's method. In fact, reading the description above, I guess I technically didn't use his "snowball" method because I did target high interest first. But once I paid something off, I rolled what I had been paying into the next target for elimination, increasing what I sent to that one and paying it off sooner. As more things got paid off, the payments to remaining debt was able to be increased substantially, which resulted in the last few things being paid off in just a few months ("snowball" effect).

 

[Starport Seven-Five]

Good and not so good advice:

Ramsey supports the debt snowball method, where debtors pay off their lowest balance debt first instead of paying off their highest interest rate debt first. While this approach has been criticized by some, research done by the Kellogg School of Management has found that the debt snowball method is generally effective. The small victories give debtors motivation. A 2016 study by the Harvard Business School found that people who used the snowball method to pay off their smallest account first, paid down more of their debt than those who used other methods.

* I don't have debt, but would advise paying off high interest first, but understand the psychology in small victories. If people get motivated, then this is a win.

Ramsey claims that investors can get a 12% average annual return, which is the rate he uses in financial analyses. Ann Carrns responded that using an average annual return rate is misleading and that the compound annual growth rate is a better measurement for planning investments. Helaine Olen, author of the book "Pound Foolish: Exposing the Dark Side of the Personal Finance Industry" quoted in Yahoo! Finance stated that a 12% return is unrealistically high. According to The Motley Fool, following Ramsey's calculations could cause individuals to be seriously under-invested for retirement.

* I use 5% as my benchmark. If I could get a guaranteed 12%, I would put 100% of everything I own into that investment. (hello Bernie Madoff)

Ramsey recommends investors to hold all their investments in stock mutual funds, but their volatility increases risk compared to bonds. He recommends that retirees withdraw 8% of their retirement fund each year.

* not sure why he advises 8% when the industry average is 4%, but again if he thinks 12% is normal ROI, then 8% = 12% - 4%, so it makes sense, but I think 8% withdraws is BAD advice.

Just to add on:
-Ramsey advises listeners to pause 401k contributions while paying down debt. Many people will miss out on 401k match funds doing this which is an instant 100% return on their investments. This advice is increasingly bad when you consider he doesn't differentiate between 20% CC debt and 3% car loan when saying it.
-He has a hard rule against credit cards and uses some interesting justifications when someone brings up the idea of using one for rewards and paying it off immediately. I get that some people can't control themselves but I regularly get 1-2k in rewards per year from CC's and haven't paid interest on them... ever.
-He constantly pushes his ELP advisors which are not vetted. Requirement for the ELP program is basically your check clearing.

He's better than nothing and if someone is completely lost he might be a good start. I just don't like his hardline rules and blanket advice as personal finance needs a customized approach for maximum effectiveness. He doesn't even leave the grey area that some things might work if well managed. It's his way or nothing.

As I said, I'm not really a "follower" and don't know much about the details of Ramsey's method. In fact, reading the description above, I guess I technically didn't use his "snowball" method because I did target high interest first. But once I paid something off, I rolled what I had been paying into the next target for elimination, increasing what I sent to that one and paying it off sooner. As more things got paid off, the payments to remaining debt was able to be increased substantially, which resulted in the last few things being paid off in just a few months ("snowball" effect).

That is commonly referred to as the "debt avalanche." Not sure the background of the name but I assume it is a tongue in cheek reference to the debt snowball that Ramsey talks about.

 

[gharter]

He still has a talk show on XM radio. Have listened a few times.
Most of what he says is common sense, debt reduction, but done in a style that is easy to understand.
Seems much better than other "Financial" people I've listened to on the radio.
As others noted, he does have non negotiable rules. However, for those who have dug themselves deeply into debt, they often need that to get out.

 

[we"reofftoneverland]

As others have pointed out, we also do not follow his investment advice. It’s ok but just doesn’t resonate with us. I also do not think it is great advice to pause on the 401k. For us retirement savings should be non negotiable from day one, first day you start working. “Kids” need that beaten into their heads. If you start day one, you can retire in your 50s if you live conservatively. That’s real power. But I think part of why he says to pause on the 401k is because he is trying to get people who are out of control to focus on one thing: paying down debt. For some people, debt is making their lives impossible. So I get his reasoning if the pause is only for a couple of years tops.