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Dave's advice is good for 99% of the general population. These individuals are the savers, low risk takers, low economic knowledge, and middle class (if it exists). Phil your audience are more knowledgeable and stock market investors.
Phil Town's Rule #1 Investing And what would Phil Town do if he maxed out his Roth IRA and still wanted to make additional monthly contributions in order to buy wonderful businesses at a MOS🤔
Phil Town's Rule #1 Investing I just finished the first week of TIC webinars👍🏼 Q: So according to this video are you saying (not advice😉) that if your 457B retirement plan is not matching any contributions that you would instead stop contributing to that plan and instead choose a say Roth IRA and max that out and invest those contributions and buy wonderful businesses???
It’s called maturity and intelligence. You can also agree to disagree after you’ve heard the other out. We’re giving two ears and one mouth for a reason.
Watching great investors disagreeing each other with respectful debating and expressing their own insights is one of the best ways for us to learn. Thanks for sharing it! Cheers. :)
Ramsey isn't a great investor he is only good at personal finance and helping people out of debt and improving bad financial habits. Big diffrence don't think he will even come close to beating the market with his high cost actively managed funds.
All I can say for certain is that listening to Dave Ramsey got me out of debt that was up to my eyes in 2009. I followed his "baby steps ". I'm a multimillionaire today with no personal debt, and several streams of income. Ive taught Daves strategies and thought process to both of my sons in hopes that they never put themselves into a terrible financial position like I did. I do believe that all personal debt is bad. Thank you Dave.
That’s because as Dave says, it’s not a math problem, it’s a behavior problem. Dave’s plan may be worse from a purely mathematical point of view, but it works because it changes the mindset and the habits. Congrats by the way!
Great it worked for you we are doing well. In Canada mortgage rates are low as 2.5 (same as inflation) meanwhile a balanced portfolio can make avg 7-8% annually so doesn’t make sense to pay mortgage off first and lose what you can accumulate for retirement in same years. Opportunity cost. To make the interest on mutual funds he says is not realistic esp net minus fees. Also many of the every day millionaire videos talked about using credit cards and having new cars before being a millionaire. I know successful Business owners who are wealthy and lease cars. More than one path to wealth.
When you’re near the top of the mountain, you need a little bit different advice than what Dave offers. The caller was in a better financial trajectory than 90% of Americans. If you are like most Americans living paycheck to paycheck, Dave Ramsey’s advice is for the most part the way to go.
The amount of sound sleep I get and a smile on my face every morning is only achievable with low to zero debt. No stress alone is more valuable than potential greater returns you could have gotten for your cash elsewhere.
It depends on your mindset and method for me. In other words, if I'm putting an extra $500 into a brokerage account that is earning way more than my car loan interest, it's liquid money, so I know in my mind I could liquidate and pay that loan any time I want. Also, if you have a reasonable term like 36 months, it's an easy decision because the car is going to paid off relatively quickly regardless.
@@chriswalden3624 Some people do that, but I sure as heck wouldn't, also a personal loan (unsecured loan) is a much higher interest rate - so you'd have to extremely confident in the stock market or your investments. What do you think people are doing when you invest and you have a mortgage, you're borrowing against your house to invest.
Man Phil, I love that I first found Dave’s work several years back, which helped me get on track, then found you (& our Rule 1 family) in 2018. Looking back, Dave Ramsey feels like finance 101, while your thought process was an advanced level class for me and my family. Thank you for helping me be much smarter about where I have my money and what to do about it!
Julian Johnson We all start somewhere. God’s got a plan. I started with Dave many many years ago as well. Then started The Year it Less last year. And discovered Rule 1 investing in October 2019. It’s so cool to see how things build on top of each other and I can’t wait to see where it goes from here!
I think Dave's advice would help a different group of people than Phil's audience. Dave's advice to stay debt free and invest into Index Funds generally works for people in the bottom strata of the economy. These are the people went crazy with education, cars and fancy items, and become waist deep in debt and have no savings. These people who live paycheck to paycheck might have zero financial education, let alone reading a balance sheet of a corporation. Phil's audience, I assume, has a good amount of financial education coming in. Higher saving rate is a given. Most of us here adhere by value investing strategy, and we think that investing into the market randomly is far riskier than a well researched individual company. I agree a little debt is good when the borrow money can help generate return greater than the interests. However, I don't think this would work for the vast majority of the population who has less than 1000 dollars in their bank account and can't balance their checking account. I think Dave is doing a good work with his audience, and so does Phil with his. Good luck everyone!
I don't entirely understand your second point. What do you mean by "investing into the market randomly"?. Are you saying that index funds are risker than "well researched individual companies?" If so, most research would disagree. I'm not disputing the fact that value stocks have shown to outperform growth stocks, but diversification is always recommended in a portfolio, which index funds offer in spades.
Concerned Citizen People have literally become millionaires on Dave Ramsey’s plan. If your money is not stuck in debt you can use your money to build wealth
I went through Dave’s program about 8 years ago. I thought the same ‘why pay off a mortgage at 3.8%, when I can invest that money at 12%’. I understand those that say think that way. Those people generally think only in financial terms, and that’s also great. As a doc I really learned the psychology and emotional power of living debt free, with a paid off car and house. The emotional stability that comes with that is almost priceless. The power of debt free living is priceless without limit. Getting a better rate of return can’t compare to the stability it comes from debt free living. My 2 cents...
absolutely correct! that topic has been discussed several times on Dave's show, and TH-cam searching "Dave Ramsey pay off debt or invest" will bring up several clips. anyone who thinks it's smarter to keep the low interest debt and invest at higher interest rates needs to watch and LISTEN to those videos. there is a reason, several reasons actually, Dave teaches financial peace and not basic personal finance
As Dave says, one should remember that debt equals risk. If you have a guaranteed income for the rest of your life then aiming at yield is a great idea. If you lose your job in a financial crisis and dont have unemployment benefits, you could quickly find yourself without anything. Investing isn't always about comparing returns, it's also about comparing risk and creating cushion for falls.
Once I achieved that ‘financial cushion” I moved from Dave to Phil. Made more money in 2 years Phil’s way than I did in 20 years Dave’s way. Like you said, I had minimum risk when I made the switch. Follow Dave, until you feel secure.
At age 19 I found Ramsey and he guided me financially. Now that I’m 22 I watch him for entertainment but not for investment advice. He’s great for starters! I do a dividend based/secular stock portfolio
IV been following Dave for 12 yrs now, I'm 29. I have followed his investment advice and have had my mutual funds setup how he suggests. Last 10yr AVG has returned 12.5-ish % I have been going hard for 10yrs and putting 35% of my income in there, close to 6m now, another 5 or so yrs Il be hitting 10m mark
Alex Campili I invest on my own and my average return yearly is more than 30% for the last few years. And little to no costs. DIY invest is the best if you can put DD.
"Most of us have really strong demands on our entire paycheck" This is exactly why Dave teaches people to pay off all of their consumer debt first before investing. Any debt that you carry around ties down your cash flow and is yet another hungry mouth to feed financially. Also, as Dave teaches, it's just as important to stay out of debt. There's not much point in getting hyper-focused and crushing debt that you have if you're just gonna go right back into it to pay for stuff like cars, vacations, etc. From a value investing standpoint, I'd look at it this way: if you get focused and wipe out all (yes, even low interest) consumer debt that you have, that'll put you in position to jump on deals later. Not carrying debt keeps you financially flexible and able to jump on opportunities that you find.
David Jones, I was literally gonna say all of this. I’m happy that someone else said it for me though because it shows that I’m not the only one thinking like this. Dave knows what he’s talking about. He’s worth over $200M so I don’t get why people criticize him.
If he was dude. You would get no stimulus check and he wouldnt give any money to small business. Dave has no idea how to run a economy of this size. All he knows how to do is run his mouth and sell you on his babystep rules which most people know our just ridiculous. You never pay the smallest to largest debt first. You pay the debt that has the most interest. I am not sure who put this stuff together but it is crazy
Dave Ramsey would never explain to you that the system is designed to rob you, nor could he or would he explain the difference between currency and money.
Black Vito - Moneyology I vehemently disagree if u have any level of decent intelligence. It’s a little hard work but there is no reason to follow those strategies.
Black Vito - Moneyology, literally 80% of Americans are financially undisciplined. So his advice is literally for almost everyone. He has great advice, not just great get out of debt advice, but great investing advice. That’s why he’s worth over $200M and you’re not.
One aspect of Dave’s teaching that sometimes gets missed is that he teaches that finances is 80% behavior, it’s not just about the math & where you can make an extra percentage point. That’s the reason for paying off the car first, then the car payment can go towards retirement or paying off the house. People get in trouble not because they can’t do math, it’s behavior.
I agree. I was raised to be financially responsible so I do not need Dave's advice but he is dead wrong on credit cards. They are like alcohol..some people can be responsible, others cannot.
Re. the car. One thing you’re not adding into the equation Phil is “risk.” Something that Dave talks about. If this guy loses his job he can lose everything - his car, his house etc. So that’s why Dave is deadest against investing while still paying on a car. Yes, Dave’s mutual fund advice is terrible. Thank you for showing us a better way Phil!
Dave is anything but conservative he has you invest all your hard earned money in aggressive funds and use his wealth management team which I am sure he gets a nice chunk from all the smart vestor names that he endorses. Mutual funds ...especially some that a wealth management team put together will have a high expense ratio and you can incur a large fee for taking funds out, A index fund that Warren buffet talks about will do the same without any fees or penalty at withdrawel
Also he goes off historical data and we are in a pandemic that may change data so how can he predict that length of recession with 25 trillion debt. Yeah its not his whole life savings in the market
CB FIT Runner, do you even listen to Daves investing strategy? Lol. He doesn’t invest in all aggressive funds. He invests in mutual funds which are known to be less risky. He invests in four different types of funds, growth, growth and income, aggressive growth and international. He doesn’t put all his eggs in one basket. That’s not being aggressive or risky. And he doesn’t have his entire life’s savings in debt. Again, if you actually listened to his show and didn’t just criticize him you’d know that he’s a real estate guy. A good chuck of his net worth is in real estate. I’ll take you’re advice when you’re worth more than Dave. He’s worth over $200M by the way.
One thing to consider is Dave's net worth is about $200m while Phil's is about $5m and even though Dave has books and Financial Peace university, Phil's course costs to learn his technique is about 6 grand, plus he has a bunch of book sales. I would rather take advice from a guy who has a larger portfolio.
@@kevinbrown1073 The money has to be paid in 3 months. So it is unlikely that many people could make 15% in that time. He cannot default on the payment he needs to make it. The reason why Dave is suggesting pay it off is to start a program or habit that involves no debt and savings with investments.
You don't get nothing from paying off $1500 early unless you have other debt but just keep making your payments on time and you'll be fine. However the investment part is where I think he needs help $65k with little to no debt you definitely need to invest some of that.
A car loan is simple interest, so it's not going to save you any money paying early. You could invest that $1500 and earn interest on it 3 months sooner. As for the condo, yeah I would pay that early since you can save thousands of dollars on interest. But get the money you have working first is Phil's point I believe. Plus your credit will drop about 50 point when you pay off the car.
Suze and Dave were my saviors when I got into trouble about 20 years ago. They are master teachers when it comes to helping people get control of their finances.
Information is the key. This is why I follow both Dave & Phil, they offer different view points in certain scenarios this is a real benefit for grasping knowledge from 2 men who are both very good in their field. Both Dave & Phil rock in my opinion 🙌
I love Dave Ramseys baby steps. I stopped juggling bills and not live paycheck to paycheck. However, Phil is how Im learning to invest what I have left over.
It’s nice to finally see someone discuss the power of interest rates and rate of return. This is a much more nuanced discussion than Dave typically engages in.
This guy sounds like every advisor, some good some just greedy. Dave seems interested in making people secure. Then he moves you forward relatively risk adverse. For 99% of people that makes their life and family happier and healthier. Making wealth for wealth sake does not make you healthier or happier, really!
Yeah - Dave prefers you use an investor pro. He will give you general advice but nothing super specific. I say listen to everyone to build your own approach.
Passive Income Tom, yeah Dave doesn’t have great investing principles, that’s just why he’s worth over $200M. I love how broke people love telling a multimillionaire that he doesn’t know what he’s doing when it comes to investing.
@@tylerlever7733 The market is back to normal regardless of your unemployment rate. Literally. Not even sure why you bring unemployment up to be honest. Not relevant to me, but the market is relevant to me.
Following Dave Ramsey’s Baby Steps got me to the point where I could even open my mind to what Phil Town has got to say. I am at BS6 now. After watching my investments grow over the last 5 months, I’m about to break away from DR. I mean, my mortgage is 3.25%. Thanks, Dave! You taught me how to budget and pay myself first. Time to fly away from the nest now. Whoot!!
I love both Dave and you! I took Dave’s Financial Peace University almost a decade ago and have done pretty good at staying out of debt. But I haven’t saved or increased my wealth until I started learning how to invest using Rule 1 style! My husband and I pulled all of our money over into Ameritrade and took as much as we could out of mutual funds and indexes (although we had to keep his 401K but only put forth the percentage his employer will match). We’re currently enrolled in your class and have an options trade open. Unfortunately we lost BIG (for us) in our first live options trade the week the market plunged in March... but it was a big important lesson we learned right out the gate! So I’m grateful for that.
How often dos a pandemic happen? The money still exists an you can access it. I am a fan of both these guys and my rainy day fund is NOT in a saving account.
As Warren Buffet says, “You can always tell who has been skinny dipping when the tide goes out”. There are a whole lot of people who have lost their job in the past few months wishing they hadn’t kept that car payment or low interest credit card. Emergency rainy day fund is for when it rains, and right now it is raining. I was following Dave Ramsey before I knew about him, because it is exactly what my dad taught me. Raised 7 kids and never made more than $18,000 a year. Retired with a paid for house, always paid cash for cars, and left an inheritance for 7 kids. Our house has been paid for almost 10 years, and at 58 and retired I work for fun and part of Chris Hogan’s club.
I’d like to see a breakdown of that because the math isn’t adding up. 18k is less than 2k a month. That’s doable bare bones for a single person that did nothing in their spare time. With 7 kids?? How??
Flch95, I am sure you would, but I am not going to lay out my father’s income that started when he got home from WW2 and went to college on the GI bill. But they lived in a camping trailer 18x8 when he was in college. Plus he worked 2-3 jobs while in school. They always lived in the country until they retired to a double wide north of Seattle. I don’t know how old you are, bu my dad passed away in 1997. He was born in 1926 and lived during the depression. Doing so, our family inherited his ability to stretch money. As a child, we always had a very large garden that would feed us all summer, and food was canned or frozen for winter. Growing up in South Dakota or North Dakota, I had two older brothers, so we hunted a lot. Venison, antelope, duck and pheasant was the predominate meat on our table for many many years. At one time we lived near the Missouri River, so there was plenty of fish on the table then. Of the 7 children, 5 finished college, one joined the military, and got his BA while serving. Parents did not kick in. My dad was Dave Ramsey before Dave Ramsey was. We always lived on less than he made. He always paid cash, except when he borrowed money for a house. Never once did I see him use a credit card.
I am debt free with an emergency fund following Dave Ramsey’s baby steps. I am now on the verge of a lay off. I am so grateful that I don’t have the extra stress of a car payment, credit card debts etc. This is Dave’s exact point when everything is good a little debt is no problem but what happens when things go wrong?
There are jobs EVERYWHERE. Your next job may not be exactly what you want, but you certainly don't have to be jobless. And since you don't have debt, you have...options!
Hi Phil Thanks for calling it out; I like the emphasis on the different types of financial education. I agree that Investment education is the next level of financial literacy or education after mastering budgeting and debt management.
Loved how you addressed this. Dave Ramsey is a great cheerleader to help people to start thinking about their financial future. Your advice is great for those people that are disciplined enough to be more strategic. I especially like your advice on emergency funds. I have 4 months expenses set aside for quick access, but I invest 30% of that in a robinhood account, to get the best of both worlds quick access/but also working for me. Thank you.
Phil's a master teacher with respect to investing. There are a lot of Americans who - like Dave - swear by the indexes and don't think people should deviate. But Phil's more of a gambler, which aligns with the mindsets a lot of us have. Now that I've got a little capital to work with, I'm thankful for him as well, but I understand why MOST people are better off sticking solely to index funds.
Getting rid of debt is my current goal, Keeping in mind that I borrowed this money to start a business and it’s eating a huge chunk of my net income from the business . I just can’t imagine how free I will feel when I pay it all off .
I agree with Dave about keeping emergency fund in savings/checking account. It gives you peace, so you can invest a remaining part of your money more risky and walkthrough all ups and downs.
I’m with you on that. I don’t like the idea of touching my emergency fund . That’s the point of it in the first place. I can invest other money elsewhere.
This is fantastic. It’s really helpful to hear an objective review of his methods. So many people act like his advice is infallible and the only way to handle finances.
I like how you are able to separate the types of people that probably should be following Dave Ramsey vs those who are smart enough to manage the small amount of debt they have.
Dave helped me understand the importance of a frugal lifestyle early in a professional career and importance of minimizing risk (debt). But once the risk became manageable (psychologically), felt drawn to investing time in figuring out how to obtain better returns on savings which led me to Danielle's book. In my opinion, people will lean more or less between Dave and Phil depending on their ability to overcome the fear of independently analyzing stocks. Factors like having a knowledgeable mentor, life circumstances playing a large role.
i think for most people following Dave is the best choice, Mr. Phil is good as a more advanced step after you master daves system which is quite simple for everyday people (its even called baby steps). Will help with self-control, money management basics and discipline.
I'm probably late with this but straight up mathematically you are 1000% correct. Dave's steps factors in Discipline, and Emotions. When I paid off my student loans early. I felt like weight was lifted off my shoulders. I can easily imagine a paid for home is 1000x more uplifting. After the paid for house, roll the house payment into your retirement at like a 20-25% of your income.
New to your content, Phil, but I'm a bit perplexed. You're obviously a smart and successful guy in your own right and you must know Dave's overall strategy. Dave's advice is designed with the perspective of his typical listener [student] in mind. If these people were as savvy as your advice implies they would never have needed Dave in the first place. They're called Baby Steps for a reason.
Funny how many financial guys on TH-cam compare their advice to Dave to get additional views, but Dave doesn't use anyone else to get views. That says something about his business model. Compare his business model and net worth to the others offering advice; not saying their advice isn't good, I just have a problem with them building themselves up by comparing themselves with someone that is highly successful and has helped a ton of folks.
Bingo.Spot On.Nothing wrong with comparing financial ideaologies,but you speak absolute "Truth".Peace.Love.Blessings to you & everyone else in comment section!!!
I'm a big Dave Ramsey fan. I don't use credit cards and bought a $5000 car. In just two years, I've amassed millions of dollars of wealth making only $38k a year. Now I'm living generously like no one else.
One thing that is hard to calculate is the value of living debt free. The peace of mind that comes from knowing no matter what happens you will be fine because your house and cars are paid off, and not stressing about paying bills, is worth much more to me than a few extra percentage points.
I always consider whether my interest on debt outweighs likely potential returns on my investments. Like you said, Ramsey is very strict because I think he operates under the assumption most people will not make responsible or reasonable decisions in these circumstances. For those of us who do, having a small amount of debt while continuing to invest isn’t bad.
Very great video reaction to Dave's advice!! Everyone has thier own steps and keep pushing forward and you will most likely get to those goals sooner than you think!!
Phil, The big difference having a emergency money in a savings or a Money Market Fund, vs investing it and cashing out when you need it is Tax purpose. You would incur taxes when you sell any securities vs money coming out of your savings account.
Love this guy . I haven’t paid my house off instead I have invested in stock market so I can save for deposit for another house. Also max out the employer contribution on retirement account .
We took Dave Ramsey's advice fifteen years ago, and paid everything off. In the meantime, we had a serious illness with the main breadwinner and other setbacks, the crash in 2008 that torched our real estate investment value, etc. We went from barely any net worth to well over a million, now we are in retirement in a paid-off house, have a bit in investment property, a large emergency fund, lots in retirement funds (401K and Roth) and have been able to help relatives and charities, as well as have some fun ourselves. The only piece of advice we did not fully take is that we kept a couple of credit cards, BUT we treat them like the old green American Express original - pay it off EVERY month without fail. With no interest debt, it seems like we have lots more money. Wrote a check in full for a car, put a complete new roof on the house, and it did not hurt a bit.
Hey Phil, I have not watched the video yet I’m about 13 seconds in but just had to say well done on the marketing. I watch Ramsey (mostly just for laughs) and this got me to click on your video. Great idea mate.
Someone may look rich, act sophisticated, & get better returns than the neighbor next door but be broke. I like what Dave teaches, In the end it’s about Net Worth & cash flow, some people have a big hat & no cattle.
They are both great advisors and teachers. I like Dave's idea of paying off all debt as through experience having owns stressed for years. However, Phil's idea of avoiding mutual funds and finding your own companies gives one more control and expands their financial knowledge. I guess combining them both can work really well in specific situations.
Dave is not about building long term WEALTH, he is about making sure you have just enough to live out your days. It all depends on what you want to be and how safe you want to play it. Dave always takes the safest way to get through life.
The one thing that must be accounted or taken into account as this. I saw a documentary on people who had large portfolios in 2008. They were wiped out to half or less. It’s not guarantee that you will continue to make interest and you can always lose it it’s a great crash happens. But if you have no mortgage payment to the car payments you at least have no debt that is what DAVE preaches
No doubt your math is correct and applicable. Dave's point is beyond math. People aren't as rational as you can hope, becoming complacent with debt creates a lifestyle of overspending which in turn leads to a lifetime of lack of wealth building. It's less about the short term investment math and more about the lifelong strategy.
I don’t know what you taught, using debt to leverage income growth? You leave out risk, not all investments make money. Also the sheer freedom of not owing anyone especially during the pandemic, NICE. I’m on baby step 7- saving, investing making large returns but NO Debt. If I become ill or unable to work, NO worries. I’ll be just fine. So I respectfully disagree with your logic. Oh I am 50 YO and a millionaire + following Dave’s program. It works.
The guy has $60,000. He can afford to invest $1500 AND keep his car payment without worry. In fact he can afford to invest ALL that $60,000 as long as it's diversified with almost zero worries as it pertains to paying off his car. The likelyhood of his diversified investments bringing in a nice return is greater than the chances all of them goes to zero. I think this fear of debt even when you're in a great financial position to pay it down is a bit much.
I feel like you are both right, although Dave's way is maybe safer, but much slower. Your way is much more aggressive and involves actually knowing about investing, which can pay off huge obviously and would be faster way to get financially independent, because remember none of us live forever
Thank you for this. This is a great help for me. I am planning my money where it will go, if I receive salary this month. That money is my computed funds for future retirement. I am conflicted if it is right to " park it in a bank" Because of this video, I realized I could add it on my initial investments on UITFs. I started my UITFs last yr Sept & Selling when it is high. Been enjoying the ups & downs.
Dave's way is for people who have a debtor's mentality. Your advice for the caller is a lot more appropriate and will earn him more money in the long run.
I would say that Phil and Dave are for different audiences. Phil’s info is for people who are ready to invest and have the desire to build generational wealth, where Dave is for people who are trying to dig out of crippling debt. Once you dig out of the debt, you can start to invest and build that wealth.
Thank you a nice calm analysis and pointing out where you differ and clearly explaining why. I wish all our politicians could learn how to do that lol.
Most people just aren't value investors, temperamentally. They should definitely do Dave's plan. I'm going in on a version closer to yours, but that's because I know (by buying Baba and not being tempted to sell when it's down), that I can hold on to investments I believe in, even if they go down.
Good comparison. I think in everything you teach, the foundation is a rock solid budget. A weekly Excel budget works like a champ. You earmark your money to every expense and every investment or savings piece and work it every week for about 15 minutes. It can change your financial future.
This is a very civil and informative way to disagree with Dave Ramsey. With that being said, in my opinion, Dave did not give any good advice to the caller. From what I heard, the caller doesn't have a debt issue - he has an investment issue. The $65k he already has set aside sounds more than sufficient to be an emergency fund... doing math on the fly, as Dave put it, the caller already has 71% of his yearly salary in an account - before taxes and monthly expenses are factored - and I'd speculate he has 12 - 18 months set aside for "granny's rainy day fund". If the caller wants to do more with his money, he could, in 3 months after the car is paid off, invest the $540 car payment, make some reallocation in his 401k, and/or shop around for a better rate to house the $65k or invest it some other way (call a good broker)... Dave didn't give any real help to a guy that obviously already had it figured out and tried to force feed his 7 baby steps to his audience at large...
So Americans do know how to disagree with class? Probably it's a "generation" thing. Jokes apart, I will need to rewatch this video again and again. Cheers to Dave & Phil.
I like both Dave and Phil. To incorporate both of their philosophies into one is ideal. I definitely agree with Phil about investing at a higher rate and keeping the lower interest debts. Invest in your company 401(k) a minimum of what your company matches and invest the rest in IRA’s outside. You have more options outside of your company 401(k) to invest in, like Phil said you can get a lot higher rate of return. Just do your due diligence. Great video.
keecefly Personal/consumer debt such as credit card or auto loan debt is dumb yes. But using leverage for real estate investing is the right kind of debt.
@@od4407 just for your information..... Dave went bankrupt in his 20s with "leveraging" debt. He was a millionaire, but lost it all. Do what you want, but I would (and have myself) put the "lever" down. Best of luck either way.....
Mike Beehler Shall I name you all the successful people? What you are doing is stating anecdotal evidence. Finding one person who overleveraged himself (keyword over) and is now terrified of debt. You don’t draw conclusions from a single person Mr. Beehler.
@@od4407 using debt as leverage is like driving drunk. yeah, some people sometimes get away with it, but it was still a dumb and dangerous thing to do. there is no such thing as good debt. debt is financial cancer. saying you have good debt is like saying you have good cancer
15-20% is unrealistic. I paid off ALL MY DEBT and every month the money I invest and save keep growing like mad. And I sleep well..very well. Kinda waiting for another market correction to buy stocks on sale.
@@Thatguy-mo8jd When multiple experts consistently agree that it's out there, it's because it's actually out there- you just have to learn how to research & find it.
@@soonermagic24 Putting 15% in your 401k is not getting a 15% return on your investment. However much your employer matches is a 100% return, but the rest of it all depends on what it is invested in.
I agree with Dave on 80% paying off debt is huge gives you a big shovel to save BIG money quick .The part that Dave does wrong he picks high fee mutual funds ,if you use a mutual fund route go with Vanguard, go with the risk that works for your age ,risk tolerance .Or use a IRA pick stocks that are top ,or a good ETF .
The question I have about the emergency fund is, if you put that money into a brokerage account, don't you get penalized by taking some of that cash out (if you don't repay it back in time)? Sometimes it takes a while to build back up your E. Fund/Put it back. Also, may not be as fast to get to.
People that have any discipline at all don’t really listen to Dave’s full advice, part of it yes but definitely not all of it. I’m purely a mathematical person and I treat almost everything in life like that because I’m very numbers oriented..I understand not everyone is like that but for me Dave’s way isn’t the only way unlike his followers say.
If you have a lack in self control, like myself then Dave is the route you want to go! But i see this mans points and on paper he is correct mathematically. If I was better disciplined id go his way
Well I did what you talk about emergency fund and it works. My high interest banking account was not high enough for me. I did invest it. Actually I did diversify it. Now we are talking. I just keep a thousand dollars in my bank. Just for quick access. The rest need to work as much as I did to earn it.
What will YOU do with the money you have saved in the bank? Leave a comment below.
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Dave's advice is good for 99% of the general population. These individuals are the savers, low risk takers, low economic knowledge, and middle class (if it exists). Phil your audience are more knowledgeable and stock market investors.
Phil Town's Rule #1 Investing And what would Phil Town do if he maxed out his Roth IRA and still wanted to make additional monthly contributions in order to buy wonderful businesses at a MOS🤔
Phil Town's Rule #1 Investing I just finished the first week of TIC webinars👍🏼
Q: So according to this video are you saying (not advice😉) that if your 457B retirement plan is not matching any contributions that you would instead stop contributing to that plan and instead choose a say Roth IRA and max that out and invest those contributions and buy wonderful businesses???
@@hongyang3620 Everyone is different. It's important to view it from all angles!
Does a brokerage ever invest 90% of your liquidity like a bank does?
This is how people with class disagree with others.
Exactly, you got love this.
It’s called maturity and intelligence. You can also agree to disagree after you’ve heard the other out. We’re giving two ears and one mouth for a reason.
Yeah not like Dave. It's o.k. to disagree but calling people idiots is what turned me off from him.
It all depends on your age & health & career job ...60k not much if you over 60 ? You may need cash on hand..not locked up ? ..
It is easier to be a spoiled brat socialist and write a bunch of nonsense. That works always 😂😂😂
Watching great investors disagreeing each other with respectful debating and expressing their own insights is one of the best ways for us to learn. Thanks for sharing it! Cheers. :)
Ramsey isn't a great investor he is only good at personal finance and helping people out of debt and improving bad financial habits. Big diffrence don't think he will even come close to beating the market with his high cost actively managed funds.
All I can say for certain is that listening to Dave Ramsey got me out of debt that was up to my eyes in 2009. I followed his "baby steps ". I'm a multimillionaire today with no personal debt, and several streams of income. Ive taught Daves strategies and thought process to both of my sons in hopes that they never put themselves into a terrible financial position like I did. I do believe that all personal debt is bad. Thank you Dave.
That’s because as Dave says, it’s not a math problem, it’s a behavior problem. Dave’s plan may be worse from a purely mathematical point of view, but it works because it changes the mindset and the habits. Congrats by the way!
Wow!! Thats awesome, congrats man!! Stories like yours keep me fired up
I'm not a multimillionaire but I followed Dave Ramsey and I am now totally debt free with a paid off house saving half of my income for retirement.
Great it worked for you we are doing well. In Canada mortgage rates are low as 2.5 (same as inflation) meanwhile a balanced portfolio can make avg 7-8% annually so doesn’t make sense to pay mortgage off first and lose what you can accumulate for retirement in same years. Opportunity cost. To make the interest on mutual funds he says is not realistic esp net minus fees. Also many of the every day millionaire videos talked about using credit cards and having new cars before being a millionaire. I know successful Business owners who are wealthy and lease cars. More than one path to wealth.
Amazing! I hope to be in the same situation in 10 years!
The most polite reaction video ever. Phil Town is a gent.
Seriously! Now days its like disagreeing is disrespecting someone.
I officially gave no excuse when not being nice lol
Buy calling Dave a TH-camr is an insult! Lol. 😂
Investor coach vs personal finance coach. It’s just for different people.
Stanley best definition.
Merge both but with Ai for best experience.
Well said!!! @stanley
When you’re near the top of the mountain, you need a little bit different advice than what Dave offers. The caller was in a better financial trajectory than 90% of Americans. If you are like most Americans living paycheck to paycheck, Dave Ramsey’s advice is for the most part the way to go.
Dave Ramsey completely altered my perspective on money and debt, but his investment advice....
The amount of sound sleep I get and a smile on my face every morning is only achievable with low to zero debt. No stress alone is more valuable than potential greater returns you could have gotten for your cash elsewhere.
Just eat right, and excercise daily for a sound sleep, and invest hard for an awesome future
It depends on your mindset and method for me. In other words, if I'm putting an extra $500 into a brokerage account that is earning way more than my car loan interest, it's liquid money, so I know in my mind I could liquidate and pay that loan any time I want. Also, if you have a reasonable term like 36 months, it's an easy decision because the car is going to paid off relatively quickly regardless.
Exactly.
@@Scorpiomaj27889 then why not just go to the bank and borrow money and put it in a brokerage account?
@@chriswalden3624 Some people do that, but I sure as heck wouldn't, also a personal loan (unsecured loan) is a much higher interest rate - so you'd have to extremely confident in the stock market or your investments.
What do you think people are doing when you invest and you have a mortgage, you're borrowing against your house to invest.
Man Phil, I love that I first found Dave’s work several years back, which helped me get on track, then found you (& our Rule 1 family) in 2018. Looking back, Dave Ramsey feels like finance 101, while your thought process was an advanced level class for me and my family. Thank you for helping me be much smarter about where I have my money and what to do about it!
Julian Johnson We all start somewhere. God’s got a plan. I started with Dave many many years ago as well. Then started The Year it Less last year. And discovered Rule 1 investing in October 2019. It’s so cool to see how things build on top of each other and I can’t wait to see where it goes from here!
Yep everyone's gotta start somewhere. I started with Whole life insurance.
I think Dave's advice would help a different group of people than Phil's audience.
Dave's advice to stay debt free and invest into Index Funds generally works for people in the bottom strata of the economy.
These are the people went crazy with education, cars and fancy items, and become waist deep in debt and have no savings.
These people who live paycheck to paycheck might have zero financial education, let alone reading a balance sheet of a corporation.
Phil's audience, I assume, has a good amount of financial education coming in. Higher saving rate is a given.
Most of us here adhere by value investing strategy, and we think that investing into the market randomly is far riskier than a well researched individual company. I agree a little debt is good when the borrow money can help generate return greater than the interests. However, I don't think this would work for the vast majority of the population who has less than 1000 dollars in their bank account and can't balance their checking account.
I think Dave is doing a good work with his audience, and so does Phil with his. Good luck everyone!
good points...i prefer Phil's way and investing in high growth stocks !
San Diego this! 💯
I don't entirely understand your second point. What do you mean by "investing into the market randomly"?. Are you saying that index funds are risker than "well researched individual companies?" If so, most research would disagree. I'm not disputing the fact that value stocks have shown to outperform growth stocks, but diversification is always recommended in a portfolio, which index funds offer in spades.
Concerned Citizen People have literally become millionaires on Dave Ramsey’s plan. If your money is not stuck in debt you can use your money to build wealth
Dave is not against investing in stocks/shares. He just addresses many people that do not understand stocks.
I went through Dave’s program about 8 years ago. I thought the same ‘why pay off a mortgage at 3.8%, when I can invest that money at 12%’. I understand those that say think that way. Those people generally think only in financial terms, and that’s also great. As a doc I really learned the psychology and emotional power of living debt free, with a paid off car and house. The emotional stability that comes with that is almost priceless. The power of debt free living is priceless without limit. Getting a better rate of return can’t compare to the stability it comes from debt free living. My 2 cents...
absolutely correct! that topic has been discussed several times on Dave's show, and TH-cam searching "Dave Ramsey pay off debt or invest" will bring up several clips. anyone who thinks it's smarter to keep the low interest debt and invest at higher interest rates needs to watch and LISTEN to those videos. there is a reason, several reasons actually, Dave teaches financial peace and not basic personal finance
Well said.👏
Wonderful summary of Dave’s philosophy of money
How is that realistic when you still have to pay property tax every year
As Dave says, one should remember that debt equals risk. If you have a guaranteed income for the rest of your life then aiming at yield is a great idea.
If you lose your job in a financial crisis and dont have unemployment benefits, you could quickly find yourself without anything.
Investing isn't always about comparing returns, it's also about comparing risk and creating cushion for falls.
Well said
Once I achieved that ‘financial cushion” I moved from Dave to Phil. Made more money in 2 years Phil’s way than I did in 20 years Dave’s way. Like you said, I had minimum risk when I made the switch. Follow Dave, until you feel secure.
Return should be corrected for risk, yes.
At age 19 I found Ramsey and he guided me financially. Now that I’m 22 I watch him for entertainment but not for investment advice. He’s great for starters! I do a dividend based/secular stock portfolio
IV been following Dave for 12 yrs now, I'm 29. I have followed his investment advice and have had my mutual funds setup how he suggests. Last 10yr AVG has returned 12.5-ish % I have been going hard for 10yrs and putting 35% of my income in there, close to 6m now, another 5 or so yrs Il be hitting 10m mark
Alex Campili I invest on my own and my average return yearly is more than 30% for the last few years. And little to no costs. DIY invest is the best if you can put DD.
@@Ramxie35 wow that's pretty good, what is your strategy, if you manage to do 30% for a few more years consistently Il have to have you invest for me👍
+David Hidalgo
Ramsey's advice still applies to you but you are already doing it.
Alex Campili that’s very awesome, congrats on your gains and your journey to success. 🙌🏼🙌🏼🙌🏼
Dave Ramsey saved our financial future! He’s family now.
"Most of us have really strong demands on our entire paycheck"
This is exactly why Dave teaches people to pay off all of their consumer debt first before investing. Any debt that you carry around ties down your cash flow and is yet another hungry mouth to feed financially. Also, as Dave teaches, it's just as important to stay out of debt. There's not much point in getting hyper-focused and crushing debt that you have if you're just gonna go right back into it to pay for stuff like cars, vacations, etc.
From a value investing standpoint, I'd look at it this way: if you get focused and wipe out all (yes, even low interest) consumer debt that you have, that'll put you in position to jump on deals later. Not carrying debt keeps you financially flexible and able to jump on opportunities that you find.
David Jones, I was literally gonna say all of this. I’m happy that someone else said it for me though because it shows that I’m not the only one thinking like this.
Dave knows what he’s talking about. He’s worth over $200M so I don’t get why people criticize him.
@@nathanschwartzrealtor Also he didn't make his money the way he's telling others to.
@@nathanschwartzrealtor because his money come from his guru tactics not his investments he is a poor investor.
Dave Ramsey is the guy that ought to be advising the Fed.
True, cuz in a sense the fed is our emergency fund or at least our financial cushion
End the Fed*
😂😂😂😂😂. Awesome comment!!!
If he was dude. You would get no stimulus check and he wouldnt give any money to small business. Dave has no idea how to run a economy of this size. All he knows how to do is run his mouth and sell you on his babystep rules which most people know our just ridiculous. You never pay the smallest to largest debt first. You pay the debt that has the most interest. I am not sure who put this stuff together but it is crazy
Dave Ramsey would never explain to you that the system is designed to rob you, nor could he or would he explain the difference between currency and money.
I think Dave's advice is great for people who no serious interest in financial matters and also are financially undisciplined
Yup Dave's advice is debtor's anonymous. Great to get people out of extreme financial trouble.
Who don't have any financial control or sense
Black Vito - Moneyology I vehemently disagree if u have any level of decent intelligence. It’s a little hard work but there is no reason to follow those strategies.
@@DCPowerRunner So basically great advice for 90% of the population :D
Black Vito - Moneyology, literally 80% of Americans are financially undisciplined. So his advice is literally for almost everyone. He has great advice, not just great get out of debt advice, but great investing advice. That’s why he’s worth over $200M and you’re not.
One aspect of Dave’s teaching that sometimes gets missed is that he teaches that finances is 80% behavior, it’s not just about the math & where you can make an extra percentage point. That’s the reason for paying off the car first, then the car payment can go towards retirement or paying off the house. People get in trouble not because they can’t do math, it’s behavior.
I agree. I was raised to be financially responsible so I do not need Dave's advice but he is dead wrong on credit cards. They are like alcohol..some people can be responsible, others cannot.
Re. the car. One thing you’re not adding into the equation Phil is “risk.” Something that Dave talks about. If this guy loses his job he can lose everything - his car, his house etc. So that’s why Dave is deadest against investing while still paying on a car.
Yes, Dave’s mutual fund advice is terrible. Thank you for showing us a better way Phil!
Dave is anything but conservative he has you invest all your hard earned money in aggressive funds and use his wealth management team which I am sure he gets a nice chunk from all the smart vestor names that he endorses. Mutual funds ...especially some that a wealth management team put together will have a high expense ratio and you can incur a large fee for taking funds out, A index fund that Warren buffet talks about will do the same without any fees or penalty at withdrawel
Also he goes off historical data and we are in a pandemic that may change data so how can he predict that length of recession with 25 trillion debt. Yeah its not his whole life savings in the market
CB FIT Runner, do you even listen to Daves investing strategy? Lol. He doesn’t invest in all aggressive funds. He invests in mutual funds which are known to be less risky. He invests in four different types of funds, growth, growth and income, aggressive growth and international. He doesn’t put all his eggs in one basket. That’s not being aggressive or risky. And he doesn’t have his entire life’s savings in debt. Again, if you actually listened to his show and didn’t just criticize him you’d know that he’s a real estate guy. A good chuck of his net worth is in real estate. I’ll take you’re advice when you’re worth more than Dave. He’s worth over $200M by the way.
Daves mutual funds advice is terrible , thats true
One thing to consider is Dave's net worth is about $200m while Phil's is about $5m and even though Dave has books and Financial Peace university, Phil's course costs to learn his technique is about 6 grand, plus he has a bunch of book sales. I would rather take advice from a guy who has a larger portfolio.
If you have over $60K in this callers case, paying off $1,500 of car loan makes absolutely sense. Just saying.
But if one could invest that 1500, and was able to get a 15% compounding return for say 30 it would be worth close to 100K.
@@kevinbrown1073
The money has to be paid in 3 months. So it is unlikely that many people could make 15% in that time.
He cannot default on the payment he needs to make it. The reason why Dave is suggesting pay it off is to start a program or habit that involves no debt and savings with investments.
Exactly why not just pay off the 1500. You will be debt free and you won’t be paying someone interest rates n that loan
You don't get nothing from paying off $1500 early unless you have other debt but just keep making your payments on time and you'll be fine. However the investment part is where I think he needs help $65k with little to no debt you definitely need to invest some of that.
A car loan is simple interest, so it's not going to save you any money paying early. You could invest that $1500 and earn interest on it 3 months sooner. As for the condo, yeah I would pay that early since you can save thousands of dollars on interest. But get the money you have working first is Phil's point I believe. Plus your credit will drop about 50 point when you pay off the car.
Suze and Dave were my saviors when I got into trouble about 20 years ago. They are master teachers when it comes to helping people get control of their finances.
Phil.... Dave Ramsey fan here, and now a Phil Town fan. What a true Gentleman. Thanks for the video, will check out all your others now.
Information is the key. This is why I follow both Dave & Phil, they offer different view points in certain scenarios this is a real benefit for grasping knowledge from 2 men who are both very good in their field. Both Dave & Phil rock in my opinion 🙌
I love Dave Ramseys baby steps. I stopped juggling bills and not live paycheck to paycheck. However, Phil is how Im learning to invest what I have left over.
It’s nice to finally see someone discuss the power of interest rates and rate of return. This is a much more nuanced discussion than Dave typically engages in.
This guy sounds like every advisor, some good some just greedy. Dave seems interested in making people secure. Then he moves you forward relatively risk adverse. For 99% of people that makes their life and family happier and healthier. Making wealth for wealth sake does not make you healthier or happier, really!
Two people for whom I have the utmost respect. Thank you Phil for doing this video!
Both of the people I follow Dave helped me with debt and Phil is helping me with wealth
*Dave has some good principles to help someone get out of debt. As for investing, not so much.* 😉
Absolutely
Well said.
I disagree.
Yeah - Dave prefers you use an investor pro. He will give you general advice but nothing super specific. I say listen to everyone to build your own approach.
Passive Income Tom, yeah Dave doesn’t have great investing principles, that’s just why he’s worth over $200M. I love how broke people love telling a multimillionaire that he doesn’t know what he’s doing when it comes to investing.
"it's for an emergency, how often is that going to happen. And with the market down" you mean like right now?
And now it is back to normal again. You were saying?
@@abbemartensson3850 since when is an unemployment rate of 13% normal?
@@tylerlever7733 normal in your country perhaps
@@abbemartensson3850 unemployment rate is usually around 5% in America. How are we "back to normal"?
@@tylerlever7733 The market is back to normal regardless of your unemployment rate. Literally. Not even sure why you bring unemployment up to be honest. Not relevant to me, but the market is relevant to me.
Following Dave Ramsey’s Baby Steps got me to the point where I could even open my mind to what Phil Town has got to say.
I am at BS6 now. After watching my investments grow over the last 5 months, I’m about to break away from DR. I mean, my mortgage is 3.25%.
Thanks, Dave! You taught me how to budget and pay myself first. Time to fly away from the nest now. Whoot!!
I love both Dave and you! I took Dave’s Financial Peace University almost a decade ago and have done pretty good at staying out of debt. But I haven’t saved or increased my wealth until I started learning how to invest using Rule 1 style! My husband and I pulled all of our money over into Ameritrade and took as much as we could out of mutual funds and indexes (although we had to keep his 401K but only put forth the percentage his employer will match). We’re currently enrolled in your class and have an options trade open. Unfortunately we lost BIG (for us) in our first live options trade the week the market plunged in March... but it was a big important lesson we learned right out the gate! So I’m grateful for that.
In your class, are you past the paper trading status? Or, did you jump the gun and trade real money?
I'm still paper trading and ran many back trades scenarios..... that showed me the hiccups that can occur.
6:56 It just happened. Am glad I stuck to Dave's advice and kept my emergency fund
Funny how Phil says "how often is an emergency going to even happen" DURING A PANDEMIC!!
How often dos a pandemic happen?
The money still exists an you can access it.
I am a fan of both these guys and my rainy day fund is NOT in a saving account.
Ha !
@@aytcs It aint inflation proof lol
Murphy's law almost always come when people least expect it.
As Warren Buffet says, “You can always tell who has been skinny dipping when the tide goes out”. There are a whole lot of people who have lost their job in the past few months wishing they hadn’t kept that car payment or low interest credit card. Emergency rainy day fund is for when it rains, and right now it is raining. I was following Dave Ramsey before I knew about him, because it is exactly what my dad taught me. Raised 7 kids and never made more than $18,000 a year. Retired with a paid for house, always paid cash for cars, and left an inheritance for 7 kids. Our house has been paid for almost 10 years, and at 58 and retired I work for fun and part of Chris Hogan’s club.
18k! Kudos, man. That's bonkers.
I’d like to see a breakdown of that because the math isn’t adding up. 18k is less than 2k a month. That’s doable bare bones for a single person that did nothing in their spare time. With 7 kids?? How??
Flch95, I am sure you would, but I am not going to lay out my father’s income that started when he got home from WW2 and went to college on the GI bill. But they lived in a camping trailer 18x8 when he was in college. Plus he worked 2-3 jobs while in school. They always lived in the country until they retired to a double wide north of Seattle. I don’t know how old you are, bu my dad passed away in 1997. He was born in 1926 and lived during the depression. Doing so, our family inherited his ability to stretch money. As a child, we always had a very large garden that would feed us all summer, and food was canned or frozen for winter. Growing up in South Dakota or North Dakota, I had two older brothers, so we hunted a lot. Venison, antelope, duck and pheasant was the predominate meat on our table for many many years. At one time we lived near the Missouri River, so there was plenty of fish on the table then. Of the 7 children, 5 finished college, one joined the military, and got his BA while serving. Parents did not kick in. My dad was Dave Ramsey before Dave Ramsey was. We always lived on less than he made. He always paid cash, except when he borrowed money for a house. Never once did I see him use a credit card.
Phil, please keep doing reaction videos on Dave. We all watch both of you anyway. Easy material for you, excellent viewing for your fans.
Dave Ramsey is for ppl thet open up a credit card and max it out the next day. Sad thing is most ppl are doing that .
I am sticking with Dave’s Baby Steps
I am debt free with an emergency fund following Dave Ramsey’s baby steps. I am now on the verge of a lay off. I am so grateful that I don’t have the extra stress of a car payment, credit card debts etc. This is Dave’s exact point when everything is good a little debt is no problem but what happens when things go wrong?
EXACTLY. "Everyone has drains in their paycheck". Not if they are debt free.
There are jobs EVERYWHERE. Your next job may not be exactly what you want, but you certainly don't have to be jobless. And since you don't have debt, you have...options!
Hi Phil
Thanks for calling it out; I like the emphasis on the different types of financial education. I agree that Investment education is the next level of financial literacy or education after mastering budgeting and debt management.
Loved how you addressed this. Dave Ramsey is a great cheerleader to help people to start thinking about their financial future. Your advice is great for those people that are disciplined enough to be more strategic. I especially like your advice on emergency funds. I have 4 months expenses set aside for quick access, but I invest 30% of that in a robinhood account, to get the best of both worlds quick access/but also working for me. Thank you.
Phil's a master teacher with respect to investing. There are a lot of Americans who - like Dave - swear by the indexes and don't think people should deviate. But Phil's more of a gambler, which aligns with the mindsets a lot of us have. Now that I've got a little capital to work with, I'm thankful for him as well, but I understand why MOST people are better off sticking solely to index funds.
Getting rid of debt is my current goal,
Keeping in mind that I borrowed this money to start a business and it’s eating a huge chunk of my net income from the business .
I just can’t imagine how free I will feel when I pay it all off .
Dave is like a doctor. He gives you guidance that is good for a group of people in general, but not necessarily good for you as an individual.
Doctors don’t do that anymore
As far as getting out of debt Dave is the man. For investing my choice is Phil Town.
Dave Ramsey is a life saver. I was in a deep hole and his teachings gave me a ladder and hope to get out of it.
I agree with Dave about keeping emergency fund in savings/checking account. It gives you peace, so you can invest a remaining part of your money more risky and walkthrough all ups and downs.
I’m with you on that. I don’t like the idea of touching my emergency fund . That’s the point of it in the first place. I can invest other money elsewhere.
You have a new fan. This is how two intelligent, classy gentlemen debate. Everyone has a different strategy with a similar common end goal.
This is fantastic. It’s really helpful to hear an objective review of his methods. So many people act like his advice is infallible and the only way to handle finances.
I like how you are able to separate the types of people that probably should be following Dave Ramsey vs those who are smart enough to manage the small amount of debt they have.
Dave helped me understand the importance of a frugal lifestyle early in a professional career and importance of minimizing risk (debt). But once the risk became manageable (psychologically), felt drawn to investing time in figuring out how to obtain better returns on savings which led me to Danielle's book. In my opinion, people will lean more or less between Dave and Phil depending on their ability to overcome the fear of independently analyzing stocks. Factors like having a knowledgeable mentor, life circumstances playing a large role.
i think for most people following Dave is the best choice, Mr. Phil is good as a more advanced step after you master daves system which is quite simple for everyday people (its even called baby steps). Will help with self-control, money management basics and discipline.
I'm probably late with this but straight up mathematically you are 1000% correct. Dave's steps factors in Discipline, and Emotions. When I paid off my student loans early. I felt like weight was lifted off my shoulders. I can easily imagine a paid for home is 1000x more uplifting. After the paid for house, roll the house payment into your retirement at like a 20-25% of your income.
Yes that caller is an exception- He isn't the rule! Great insight!
New to your content, Phil, but I'm a bit perplexed. You're obviously a smart and successful guy in your own right and you must know Dave's overall strategy. Dave's advice is designed with the perspective of his typical listener [student] in mind. If these people were as savvy as your advice implies they would never have needed Dave in the first place. They're called Baby Steps for a reason.
Funny how many financial guys on TH-cam compare their advice to Dave to get additional views, but Dave doesn't use anyone else to get views. That says something about his business model. Compare his business model and net worth to the others offering advice; not saying their advice isn't good, I just have a problem with them building themselves up by comparing themselves with someone that is highly successful and has helped a ton of folks.
Bingo.Spot On.Nothing wrong with comparing financial ideaologies,but you speak absolute "Truth".Peace.Love.Blessings to you & everyone else in comment section!!!
Dave Ramsey got my wife and I out of our financial hole. Now it’s looking bright.
Dave's plan is all about focus. If one can juggle things responsibly, more power to them.
I'm a big Dave Ramsey fan. I don't use credit cards and bought a $5000 car. In just two years, I've amassed millions of dollars of wealth making only $38k a year. Now I'm living generously like no one else.
One thing that is hard to calculate is the value of living debt free. The peace of mind that comes from knowing no matter what happens you will be fine because your house and cars are paid off, and not stressing about paying bills, is worth much more to me than a few extra percentage points.
I always consider whether my interest on debt outweighs likely potential returns on my investments. Like you said, Ramsey is very strict because I think he operates under the assumption most people will not make responsible or reasonable decisions in these circumstances. For those of us who do, having a small amount of debt while continuing to invest isn’t bad.
Absolutely. Not all debt is bad, and as I mentioned, a little bit of it could be a good thing. As long as it's good debt-not bad debt.
Phil Town's Rule #1 Investing absolutely! I really enjoy your videos and I appreciate you explaining these nuances.
Very great video reaction to Dave's advice!! Everyone has thier own steps and keep pushing forward and you will most likely get to those goals sooner than you think!!
Phil, The big difference having a emergency money in a savings or a Money Market Fund, vs investing it and cashing out when you need it is Tax purpose. You would incur taxes when you sell any securities vs money coming out of your savings account.
Love this guy . I haven’t paid my house off instead I have invested in stock market so I can save for deposit for another house. Also max out the employer contribution on retirement account .
We took Dave Ramsey's advice fifteen years ago, and paid everything off. In the meantime, we had a serious illness with the main breadwinner and other setbacks, the crash in 2008 that torched our real estate investment value, etc. We went from barely any net worth to well over a million, now we are in retirement in a paid-off house, have a bit in investment property, a large emergency fund, lots in retirement funds (401K and Roth) and have been able to help relatives and charities, as well as have some fun ourselves. The only piece of advice we did not fully take is that we kept a couple of credit cards, BUT we treat them like the old green American Express original - pay it off EVERY month without fail. With no interest debt, it seems like we have lots more money. Wrote a check in full for a car, put a complete new roof on the house, and it did not hurt a bit.
Hey Phil, I have not watched the video yet I’m about 13 seconds in but just had to say well done on the marketing. I watch Ramsey (mostly just for laughs) and this got me to click on your video. Great idea mate.
Someone may look rich, act sophisticated, & get better returns than the neighbor next door but be broke. I like what Dave teaches, In the end it’s about Net Worth & cash flow, some people have a big hat & no cattle.
They are both great advisors and teachers. I like Dave's idea of paying off all debt as through experience having owns stressed for years. However, Phil's idea of avoiding mutual funds and finding your own companies gives one more control and expands their financial knowledge.
I guess combining them both can work really well in specific situations.
Dave is not about building long term WEALTH, he is about making sure you have just enough to live out your days. It all depends on what you want to be and how safe you want to play it. Dave always takes the safest way to get through life.
The one thing that must be accounted or taken into account as this. I saw a documentary on people who had large portfolios in 2008. They were wiped out to half or less. It’s not guarantee that you will continue to make interest and you can always lose it it’s a great crash happens. But if you have no mortgage payment to the car payments you at least have no debt that is what DAVE preaches
No doubt your math is correct and applicable. Dave's point is beyond math. People aren't as rational as you can hope, becoming complacent with debt creates a lifestyle of overspending which in turn leads to a lifetime of lack of wealth building.
It's less about the short term investment math and more about the lifelong strategy.
I don’t know what you taught, using debt to leverage income growth? You leave out risk, not all investments make money. Also the sheer freedom of not owing anyone especially during the pandemic, NICE. I’m on baby step 7- saving, investing making large returns but NO Debt. If I become ill or unable to work, NO worries. I’ll be just fine. So I respectfully disagree with your logic. Oh I am 50 YO and a millionaire + following Dave’s program. It works.
The guy has $60,000. He can afford to invest $1500 AND keep his car payment without worry. In fact he can afford to invest ALL that $60,000 as long as it's diversified with almost zero worries as it pertains to paying off his car. The likelyhood of his diversified investments bringing in a nice return is greater than the chances all of them goes to zero. I think this fear of debt even when you're in a great financial position to pay it down is a bit much.
I feel like you are both right, although Dave's way is maybe safer, but much slower. Your way is much more aggressive and involves actually knowing about investing, which can pay off huge obviously and would be faster way to get financially independent, because remember none of us live forever
Of course, you will not agree with everything that someone else says. Thanks for sharing!
Thank you for this. This is a great help for me. I am planning my money where it will go, if I receive salary this month.
That money is my computed funds for future retirement.
I am conflicted if it is right to " park it in a bank"
Because of this video, I realized I could add it on my initial investments on UITFs.
I started my UITFs last yr Sept & Selling when it is high. Been enjoying the ups & downs.
Dave's way is for people who have a debtor's mentality. Your advice for the caller is a lot more appropriate and will earn him more money in the long run.
Great, love the professionalism
I would say that Phil and Dave are for different audiences. Phil’s info is for people who are ready to invest and have the desire to build generational wealth, where Dave is for people who are trying to dig out of crippling debt. Once you dig out of the debt, you can start to invest and build that wealth.
Follow Dave’s advice.... once you’re done enjoy evaluate and then follow this guy. Both have sound advice it depends where you are.
Thank you a nice calm analysis and pointing out where you differ and clearly explaining why. I wish all our politicians could learn how to do that lol.
Great advice. Thanks!
Most people just aren't value investors, temperamentally. They should definitely do Dave's plan. I'm going in on a version closer to yours, but that's because I know (by buying Baba and not being tempted to sell when it's down), that I can hold on to investments I believe in, even if they go down.
Good comparison. I think in everything you teach, the foundation is a rock solid budget. A weekly Excel budget works like a champ. You earmark your money to every expense and every investment or savings piece and work it every week for about 15 minutes. It can change your financial future.
If you're an average middle class guy Dave has great advice for people in that mindset.
This is a very civil and informative way to disagree with Dave Ramsey.
With that being said, in my opinion, Dave did not give any good advice to the caller.
From what I heard, the caller doesn't have a debt issue - he has an investment issue.
The $65k he already has set aside sounds more than sufficient to be an emergency fund... doing math on the fly, as Dave put it, the caller already has 71% of his yearly salary in an account - before taxes and monthly expenses are factored - and I'd speculate he has 12 - 18 months set aside for "granny's rainy day fund".
If the caller wants to do more with his money, he could, in 3 months after the car is paid off, invest the $540 car payment, make some reallocation in his 401k, and/or shop around for a better rate to house the $65k or invest it some other way (call a good broker)...
Dave didn't give any real help to a guy that obviously already had it figured out and tried to force feed his 7 baby steps to his audience at large...
So Americans do know how to disagree with class? Probably it's a "generation" thing. Jokes apart, I will need to rewatch this video again and again. Cheers to Dave & Phil.
I like both Dave and Phil. To incorporate both of their philosophies into one is ideal. I definitely agree with Phil about investing at a higher rate and keeping the lower interest debts. Invest in your company 401(k) a minimum of what your company matches and invest the rest in IRA’s outside. You have more options outside of your company 401(k) to invest in, like Phil said you can get a lot higher rate of return. Just do your due diligence. Great video.
You are spot on Phil!
Thanks for this awesome video!
I will invest my money in bank account. Valuable information.. Tq phill for sharing your ideas..
I’m never going back into debt. Never using a credit card ever
If that works for you then great, best of luck
keecefly Personal/consumer debt such as credit card or auto loan debt is dumb yes. But using leverage for real estate investing is the right kind of debt.
@@od4407 just for your information..... Dave went bankrupt in his 20s with "leveraging" debt. He was a millionaire, but lost it all. Do what you want, but I would (and have myself) put the "lever" down. Best of luck either way.....
Mike Beehler Shall I name you all the successful people? What you are doing is stating anecdotal evidence. Finding one person who overleveraged himself (keyword over) and is now terrified of debt. You don’t draw conclusions from a single person Mr. Beehler.
@@od4407 using debt as leverage is like driving drunk. yeah, some people sometimes get away with it, but it was still a dumb and dangerous thing to do. there is no such thing as good debt. debt is financial cancer. saying you have good debt is like saying you have good cancer
4:20 15-20% is an irrational expectation for rate of growth.
15-20% is unrealistic. I paid off ALL MY DEBT and every month the money I invest and save keep growing like mad. And I sleep well..very well. Kinda waiting for another market correction to buy stocks on sale.
@@tomf9292 same. Disappointed the market didn’t crash today.. lol
Now he sounds as out of touch as Dave when he says should be getting 10-12 percent in high growth mutual funds 😂
@@Thatguy-mo8jd When multiple experts consistently agree that it's out there, it's because it's actually out there- you just have to learn how to research & find it.
@@soonermagic24 Putting 15% in your 401k is not getting a 15% return on your investment. However much your employer matches is a 100% return, but the rest of it all depends on what it is invested in.
You are very polite. I'm not always a big believer in Ramsey either.
Phil, could please do a video on how you got started with a $1000 loan and was a millionaire in five years? Great channel by the way.
I think people would find that very interesting
I agree with Dave on 80% paying off debt is huge gives you a big shovel to save BIG money quick .The part that Dave does wrong he picks high fee mutual funds ,if you use a mutual fund route go with Vanguard, go with the risk that works for your age ,risk tolerance .Or use a IRA pick stocks that are top ,or a good ETF .
last baby step is the best one :)
Agree with all your points. What's your take on refinancing. When will it be worth it?
The question I have about the emergency fund is, if you put that money into a brokerage account, don't you get penalized by taking some of that cash out (if you don't repay it back in time)? Sometimes it takes a while to build back up your E. Fund/Put it back. Also, may not be as fast to get to.
I gave it a thumbs down at the start of the video, but changed it at the end to a thumbs up. This guy is GOOD!
People that have any discipline at all don’t really listen to Dave’s full advice, part of it yes but definitely not all of it. I’m purely a mathematical person and I treat almost everything in life like that because I’m very numbers oriented..I understand not everyone is like that but for me Dave’s way isn’t the only way unlike his followers say.
If you have a lack in self control, like myself then Dave is the route you want to go! But i see this mans points and on paper he is correct mathematically. If I was better disciplined id go his way
Well I did what you talk about emergency fund and it works. My high interest banking account was not high enough for me. I did invest it. Actually I did diversify it. Now we are talking. I just keep a thousand dollars in my bank. Just for quick access. The rest need to work as much as I did to earn it.