Financial Advisors React to SHOCKING Dave Ramsey Call! 😱
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- เผยแพร่เมื่อ 20 ม.ค. 2022
- A caller on the Dave Ramsey Show gets crazy. The Money Guy Show reacts.
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I was in the construction industry in 2009, I ended up with a negative net worth at 45 yo. I read one of Dave’s books and it motivated me to change my life. 14 years later I am debt free (including my house) and have a net worth well north of 1M. I don’t agree with everything Dave says, but he changed my world. On top of that, the only money he has made off of me is through the dozens of his books that I have purchased to give away to others. I’m forever grateful to Dave’s main message to get debt free.
a bot wrote this…
Why would you make a reply like that? False accusations only testify to your character. Shine light, not darkness.
@@rickgray8007 beep boop beep
I own a 1st generation construction company, have a simular net worth as you and did the total opposite of what dave says lol
@@rickgray8007 great job mate. I'm on 120k a year and at the end of the year I got zero money and wonder where it has all gone? I'm starting my debt free journey and plan to pay off all my cars house and credit in the next 7yrs for 255k of debt, I believe the system works and it's simple maths living on less then you make and smash the crap out the debt and work every side gig you can.
I think Dave doesn't want to admit that what made him rich is not his strategy that he preaches, but the business he created around marketing and selling that strategy.
Exactly. 💯
Yeah he is too far in the ditch to switch his public strategy, even if it is wrong.
He's just going to become a joke to all financial advisors over time.
Bingo.
Exactly. He’s selling an idea
Wrong ! Dave got rich using his strategy in his business. Just like thousands of “baby step millionaires” who got rich using the strategy regardless of what they do for s living.
I like Dave Ramsey. His core message is don't be an idiot with debt. Which is a lesson a TON of people could use
Too bad he doesn't understand math.
@@mattbenz99 He does understand math-the math that puts more money in Dave's pocket!
His big premise is the first of the two rules to getting wealthy.1: Spend less than what you earn, so you can move to step 2: invest the remainder. Most financially challenged people can't get step 1 down
@@stevef68 And that math can also put more of your own money in your pocket instead of improper handling of the money, going to others to get rich off your mishandling. plus why shouldn't he get paid something to help others. Any other financial advisor is going to charge you one way or the other.
@@mattbenz99 Yeah, everyone says he doesn't know math, but he made his fortune off investing twice. 75% was made off investing, only 25% off books and seminars. Maybe you should learn some of his non math skills.
A friend of mine told me, "Dave is good at telling people who are bad with money they're bad with money and got rich doing so."
true
Accurate
Dave has a place in the financial world. There are people who are like alcoholics with debt and Dave's show needs to exist for them as sort of an AA meeting. Once you get a hold of your finances, there are other coaches you should listen to on finance.
Not when that coach steers you into high fee actively managed funds.
Recommendations….?
Exactly.
I wouldnt reduce those customers to the equivalent of alcoholics, especially when nearly 40% of the workforce is up to their necks in school debt. Theyre not alcoholics, they're working adults who are dealing with the financial consequences of their 18 year old selves. Plus, the presumption in your argument is that a financial coach with a different ideology can provide you more return. This is entirely speculative and ignorant of risk. The fact is that Dave's way is straightforward and will absolutely land you in a great spot by retirement. You literally have no argument against that.
@@makeedahbaker6045 simple path to wealth by jlcollins
Dave is a millionaire because of his radio show and books, not just because of his stock investments.
He was a millionaire AGAIN before his radio show...clown
The caller is right, but delivery was obviously terrible. Dave has not, and will not, change his strategy and advice. Listen to Dave if you are in debt, listen to the Money Guy if you want analytical information.
I tend to agree with you, but we are going to have to move away from this type of content to maintain that perspective.
Dave is bad for wealth building.
He will tell you to stop investing in your retirement, to get out of debt faster.
He will tell you to sell your rentals, to pay off your main house.
He's bad at helping you make money.
Yes!
@@saulgoodman2018 It's only good if someone is so bad with money they have credit card debt but still have all the new phones, homes, and cars.
That paragraph should have ended at, the caller is right.
Good example showing that “being right” and “being convincing” are completely separate things. Every combination is possible, but nothing is more frustrating than being right and unconvincing.
Being right is sometimes a lonely job.
If I was Dave Ramsey I would be filled with rage at this point. How many times does he have to repeat himself and still have people straw manning or just ignoring his arguments and reasoning
Well said! If I were a betting man I’d bet you work in sales. I do and I learned a long time ago the veracity of your statement. I gave up on trying to be “right”.
There is a famous Mark Twain quote, about it being easier to fool a person, than to get them to admit that they have been fooled. This is true in personal finance as well. One of the best policies I ever heard is that, if you cannot understand how an investment works, stay away from it.
LOL! You made my day!
I made more wealth by avoiding 50% of Daves advice.
Plz share
Honestly, I was amazed at how calm Dave remained after a huge insult from the caller. Having said that, Dave’s fortune consists mostly of a huge subscriber base, selling books, financial peace university, and getting revenue from his recommended providers.
How do you get rich, teach others how to get rich. That said, Dave Ramsey's advice is pretty solid for his audience. It's not for Financial Mutants, but it's pretty solid. And unlike others, I don't think I've ever witnessed Ramsey try to imply, or otherwise say, that his wealth was gained through keen business prowess or investing prowess.
But Dave never tells us what mutual funds he uses.
And yes. I'm amazed that Dave remained so calm. is this a new Dave? Somebody better check that this is the real Dave.
@@benchoflemons398 which funds does he get kickbacks on?
@@Mehwhatevr he isn't really teaching people how to get rich. If you listen to the callers the people who follow dave ramsey are the kind of people who are not responsible with their money. His service is he is just constantly reminding them that they need to pay down their debts and once they've done that set up a safety net then invest in safe bets.
@@appropriate-channelname3049 I think you misunderstood me.
But since you bring it up. He does teach you how to get rich. What he doesn't teach is how to get rich quick. The end result of the baby steps is to retire a millionaire. His advice on debt is spot on for his audience. His advice on investing is wrong for his audience. People who can barely manage a credit card are unlikely to be able to pick a mutual fund like him. Most of his callers are on baby step 1-3ish, but not all of them. Just because most of his audience haven't made it to the latter baby steps, doesn't mean the former ones aren't part of his plan of becoming wealthy
He got rich by teaching people how to get rich. Not rich quick, just rich. Or, in his words, wealthy. Paying off debt is the first step to becoming wealthy
@@Mehwhatevr Exactly! You nailed it.
To be fair, Ramsey loves calling other people idiots, so he also deserves the childish name calling.
And Ken Coleman doesn't have the balls to tell Dave Ramsey to read that frickin' book.
I think the caller approached it that way because that is exactly how Dave talks to his callers.
Agreed! Another reason why DR is horrible.
@@robertblake60 I love Dave hes awesome
Agreed, his condescending tone is laughable at best…. DR is a joke in the world of real finance. His success revolves around grifting his cult following, nothing more…
Transfer of wealth usually occur during market crash, so the more stocks drop, the more I buy, in the meanwhile I'm just focused on making better investments and earning more as recession fear increases, apparently there are strategies to 3x gains in this present market cos I read of someone that pulled a profit of $350k within 6months, and it would really help if you could make a video covering these strategies
An uptick in volatility is not necessarily a bad thing, there are opportunities to be found even in this whirlwind. volatility gives you a chance to rebalance... Netflix , Amazon , may have gotten beaten up, but they are still good companies.. You have to get a fiinancial-advisor/broker to aid you diversify your portfolio
I'll suggest you create a diversification strategy because building a good financial-portfolio has been more complex since covid. Recently my colleague advised me to hire an advisor, surprisingly I have accrued over $150K under the guidance of my coach during this crash. She figured out Defensive strategies to protect my portfolio and make profit from this roller coaster market
Please can you leave the info of your investment advisor here? I’m in dire need for one
I've shuffled through investment-advisers in the past and so far Christine Ann Podgorny has proved to be the most effective and well grounded, she has quite an audience so you can easily just reach her on the web to gain access to her, just look-the name up.
Scam bots unite! ✊️
This caller used the same harsh tactics that Dave is known for but for some reason people come to Dave's defense.
I'm actually glad that this caller talked to him, the same way Dave talks to his callers.
But in the end, the caller recanted and was defeated. He wasn’t prepared for Dave’s response. And he should have been
Was going to write the same thing. Dave is arrogant. He talks about things he knows nothing about like he is an expert.
He does use condescending terms like stupid, moron and idiot. Not the best way to present yourself to a national, largely Christian, audience.
Well said
@@newagain9964 You have an odd definition of defeated.
Dave isn’t stupid, but he’s totally arrogant. Not without cause, I will concede! I owe a lot of thanks to Dave. Much of my household’s positive financial situation can be attributed to the things I learned from listening to him. But I’ve considered myself a “Reformed Ramseyite” for many years; I think there is a difference between “foolproof” and “optimized”, and Dave’s teachings are the former.
Many people need the “foolproof” method. If most people can't save 500 dollars for emergency then this is why people need to follow his method. For those who continue on to financial freedom, they will move on from Dave. But arrogant is a strong word to use just because you moved on from him.
@@MashiroRedo I didn't use my comment very well as a platform for demonstrating Dave's arrogance. I mostly used it to discuss my more personal interactions with his lessons. But he's arrogant whether I've moved on from him or not. He's very convinced that his way is the only right way.
However, like Brian and Bo, I don't like to dwell on that. He's undoubtedly helped hundreds of thousands of people to be in a better position than they otherwise would have been. For that alone, I'm glad he's been teaching.
@@MashiroRedo I agree that many people *do* need the foolproof method! I'm glad that it's an option for people who are looking for help in their financial dealings.
Just like how he tells people not to use credit cards when they argue paying them off in full each month. Also the 15 year mortgage vs the 30. Most people won’t pay the cards in full and pay the 30 earlier. So it’s easier to make a blanket statement. Can’t argue it.
@@FastAligator1234 totally. I'm sure so much of his approach is based upon seeing where people fail. He sees enough people getting caught back up in credit card debt after initially getting themselves free, he's going to eventually just say "no credit cards at all, then!"
Appreciate what y'all do on this channel. I am a Dave Ramsey fan even though I don't necessarily follow his rules to a tee. I think he does a good job emphasizing the psychological element of money management that a lot of other people ignore in favor of pure mathematics.
This! 🙏🏻❤️
I agree. He emphasizes that dealing with money is just as much of a mental or emotional challenge as it is a numbers thing in that it's about how each of us relate to money because that's what habits are based on. Some of us need that.
Ramsey treats personal spending as an addiction. Not everyone is an adict, or needs to go to rehab
@@NasciParaAdorar7 You no speka English.
One very important variable that was not mentioned is fund expenses. First, you want to be sure you buy no-load funds, actively managed or not. Next, the annual expenses for managed funds are higher than index funds and this can make a big difference. It’s easy to identify the fund expenses at places like Fidelity, Vanguard, and Schwab. Those three firms are the only places I would invest my money, and personally I use Vanguard. Over time, higher expenses make a big difference in the total return.
The goal is to get an actively managed fund that charges more mer but has better returns by more than that difference. Then the lower mer of the index fund doesn't make it a winner. It's about overall return
I don’t think the caller was wrong, but probably could be delivered differently. I honestly feel like he was giving Dave a taste of his own medicine, look at how often Dave uses the terminology of “stupid” when referring to actions, thoughts, or ideas of other people that he might not agree with. Just my thought.
That’s a fair analysis. Dave does routinely insult or down talk challengers so it’s fair he gets taste of his own medicine
I respect Dave has given me some good advice on money management but sometimes he thinks he knows it all and never has an open mind to change or other people's ideas when it comes to money management or investing.
Not just with people he disagrees with but with those that influence the average Joe to make bad financial decisions and/or encouraging a bigger hole in their pocket
I think of Dave as a gateway to personal finance. He offers a great basic framework for those who suck with money, puts out enough free content you never really need to buy his products to succeed, and his rules are clear and simple.
For some, his rules are enough and they are happy. For others, they want more and so they learn more and find other ways, people, etc. I don't think either is wrong, and people need to understand personal finance is exactly that - personal. What works for you may not work for someone else. If you don't like Dave's content, don't listen.
Agreed. You can absolutely follow the Baby Steps without buying a single one of his books or classes. It's just that as a guy who also emphasizes the psychological aspects of _personal_ finance, I bought his class and some of the books. Not because I "drank the Kool-Aid," but because I support the people who support me. Hell, I'm "that guy" who doesn't even use a gas station restroom unless I purchase something first on principle. His advice improved my life, and I show my appreciation with greenbacks;
It's like if Dave Ramsey was the financial education basics we all deserved in high school and for people who want to go further, then there is education you can seek out elsewhere
@@TrainerAQ he says that many times in his radio show. " giving you the advice your grandmother should have, only we keep our teeth in." 😂. Pretty close to his exact quote.
@@wallygator1827 XD
That’s why I followed Dave I didn’t really start until 2 weeks ago when I hit absolute rock bottom became homeless, lost my job, lost my family and finally a car accident that took away the only roof over my head. Luckily I was still a SGT in the National Guard who had a bunch of friends in the city I wrecked in. They put my on orders so I could earn income while I get on my feet, put me in a hotel so I had a place to sleep and thanks to that foothold everything only went up from there. It was a hard pounding god gave me but now I’m following Dave to the letter to make sure I’m never in that situation again.
I consider dave great for people bad with money looking to get out of debt and awful for people good with money who want to invest and grow their wealth.
Very well said. Totally agree!
Exactly. If you don’t know how to manage money, start with Dave and then when you know more money on.
I'm so thankful that you guys handle your disagreements with such grace and humility. Thank you for always leading by example!
These react videos are so good. It helps us understand how to better apply the FOO. Keep it up. It adds a nice flavor to the channel!
You nailed it when you addressed investor's return expectations. It changes with age for most. Very rare to find an all growth mutual fund investor from age 20-30 through to their 60-70s. It is one thing to lose $10,000 when the market goes down, but very hard to watch $500,000+ evaporate without addressing one's risk profile.
I feel like I've been waiting for this video to happen for years! Thank you boys!!!
Dave isn't stupid. Arrogant, yes. (Though this caller actually makes him look less so in comparison). You just need to understand Dave's motivations to understand why he's not stupid. He's running a business and a lot of it is based on outdated and sometimes self serving advice. He can't undercut his advisor network (who work on commission).
This isn't meant to be a jab at Dave but I can't help but be reminded by the Mungerism, "It's not supposed to be easy anyone who finds it easy is stupid."
Agree 100%
Dave is for a different audience than some of the shit house inversters are.
@@DR.Detroit11 what is a shit house investor?
He’s stupid. Only a stupid person would advise someone to not take advantage of free money (employer matched 401k funds)
Dave means well, but he refuses to alter his strategy, even if it’s no longer valid. Credit cards are good if people can pay them off each month, ETF/Index funds are a good choice for most people, his $1000 initial emergency fund is 30 years old and adjusted for inflation should actually be ~$2000. He definitely helps people get out of debt, but not in the most efficient or financially advantageous ways.
Nail on the head here.
Dave's audience is not the same as this audience. He targets people who can't manage money. People who watch the Money Guy Show are past that
Bingo !!!!
JP, I agree with you. But I just want to point out that the initially $1000 for emergency fund is still a good starting point because it’s used to cover an insurance deductible.
For example, your for auto insurance if you wreck your car. And as far as I know, inflation hasn’t affected that (yet).
I like to think that Dave knows he cannot change what he says or he will lose creditable.
@@waterdd1 You're right that it's better than nothing, but the audience he's talking to who shouldn't have credit cards are the same people who have high deductible health and auto insurance.
The key here with the active funds versus index funds is that VOO, for example, has a fee of 0.03% while active funds have a fee of 1%+ and that fee difference is what adds up to that 50% difference over a lifetime of investing. An active fund has to outperform the index every single year for this not to be true and all funds underperform at some point.
Well a fund can underperform some years as long as it outperforms in others to offset but yea most active funds it's profitable to steer clear.
Yup PLUS Dave's suggest mutual funds charge 5% front load fees too. So you lose 5% of your principle from the start.
I think Bogle said the actual amount the mutual fund takes over time is 66 percent which in my view is robbery.
Dave actually recommends funds where you pay a fee up front. These are harder to compare without... you know... math. The fees are worth it... if they can beat the index by more than the fees. But over long periods of time, there are no large scale funds that have done that.
Dave claims there are and that he knows how to pick them, but isn't it suspicious that he never shares any of the details of his portfolio?
im 40 years old and compleatly debt free including my house thanks to dave ramsey . say waht you like the guy deserves a medal.
I think that people forget that Dave’s target audience are those in deep debt. It’s a simple process to help people get out of debt and break terrible financial habits. If one is arguing the difference in investing tactics, they probably aren’t Dave’s target audience.
I just discovered your channel today, and I really appreciate your content. I am slowly building my personal finance literacy as an adult and your critique of Tik Tok financial advice videos are very helpful in discerning what is true and what is not. Thank you!
Caller is spot on.
Dave provides a lot of solid personal finance advise when it comes to debt management and basic money stuff. His ideas on investing and especially his 12% return expectations for equities is a dangerous input into anyone’s financial plan. Look, I would like to see his return expectations come true, but for planning purposes, I’d rather use the 4% expectation of Vanguard for the coming decade.
@@aaront936 true, a lot of his investing ideas (if not all of them) make no sense or are outright detrimental. Maybe he should have stopped at baby step 2 and leave the rest to others with a more fiduciary mindset.
I know a lot of people who have followed his advice to get out of debt (with the exception of his $1K baby emergency fund as it’s just too low and hasn’t been adjusted since he rolled it out 30 years ago), but after getting out of debt and fully funding their emergency fund, they’ve all ditched his plan. They’ve also ignored his advice not to invest in retirement while getting out of debt because they would be giving up company match (free money). His investing advice isn’t great.
His debt advice is actually terrible.
I agree. A basic accounting principle is conservatism. Figuring to make 12 percent a year is crazy because very unrealistic, better going off history than just hoping rest of my life is going to be during a booming time.
@@sybo59 His advice is for people that have already shown they are horrible with money. For this group of people, his advice is 100% accurate.
Dave ISNT an idiot. Those funds make HIM money since he partners with ELPs
50% lol likely more. Paying 5% LOAD fees AND 1-2% annual fees are horrible !!! That's 6-7% of your money guaranteed gone.
And how much in taxes, because of turnover?
Do you think the mutual fund industry is a scam? Even though they are broadly held by the wealthiest and smartest members of society?
@@DavidRamseyIII I think you're a scam.
@@DavidRamseyIII no, Vanguards mutual funds are great. What Dave suggests is absolute shite. His 12% annual returns aren't backed by ANY data.
@@saulgoodman2018 😳 I don't want to know
Such a narcissist who enjoys belittling people simply because they don't follow a plan that's 30 years old and doesn't fit today's environment.
What would you change?
Dave Ramsey is good for motivating people to change their bad habits of spending to better habits of savings. He does push advisors but considering his main target audience is people that have made bad financial decisions using an advisor although cost money might help them avoid bad decisions when it comes to investing too. The most important part is saving early for a long time and not panic selling. Being too conservative can hurt your returns as well.
He motivates people to change bad habits for slightly less bad habits. He pushes people away from actual good habits.
When you read articles about financial freedom, you may hear people talk over and over again about how they spend next to nothing to be able to retire at a younger age like 30. Instead, they may have already achieved financial freedom and boast about how frugal they were in order to retire well before the typical retirement age.
The first level of financial freedom is creating an emergency fund. Ideally, this will also include paying off any credit card debt.
Unfortunately, living paycheck to paycheck is the reality for millions of Americans. I think I like to play again with the stock market, any recommendations?
Would you mind sharing information about the advisor who helped you? I am now 39 years old and would love to grow my stock portfolio and plan for my retirement.>>>
Dave called my coworker an “idiot that lives in stupidville” when he called about buying $5k of Bitcoin a while back. Today, that Bitcoin is worth $650k.
Ok so.
Lots of great investors also think that Bitcoins is a bad idea.
Does them also being wrong on this one thing mean that they know nothing?
You are human and have been wrong before so I guess we have to conclude that you are wrong on every thing.
@@mjs28s
The commenter is just pointing out that Dave Ramsey is arrogant and he had it coming for him when this caller was arrogant back to him
The Money Guys are sooooo nice. Can't wait to have your management guys.
This is actually the first deeper financial conversation I've seen on Dave Ramsey. Nice to see Dave be able to double down and fend off the trolls reasonably.
Thank you for reminding me of the Golden Rule - never too often to hear about how to apply it in life. And I love your coffee mug!
First caller is 100% right, not a polite guy but he’s right and Dave is 100% wrong. His logic flaw is that he’s basing his position on the folk who have made it using active funds, and ignoring how much more they would have had in passive and how many folk lost big in active and failed to make it to Dave’s list.
Dave uses folksy anecdotal wisdom when he's wrong and statistics when he's right (though sometimes he does tend to intentionally misread statistics).
I wonder if Dave is missing the point that, just because his active funds have outperformed the market, does not mean it is easy to pick active funds that will do so.
That statement you just said is the stupidest thing I’ve heard in a long time. I’m not saying Dave is right all the time, but you can’t deny his success and the success of the people that follow his plan. There are a lot of ways to become wealthy. So to say one way is right and one way is wrong is ridiculous. I’m an active investor because it’s my money and my responsibility. I might have a financial advisor, but I ultimately make the decision. I will also outperform The index funds. Many ways to skin the proverbial cat!
@@duanehebebrand5330 exactly. I use a planner and buy actively managed funds and have out performed the market substantially net of fees for an eternity. And my planner isn’t even that bright. The gall to criticise someone like Ramsey and declare your opinion absolutely correct over him. Bizarre
@@DavidRamseyIII I hope it won't come has insulting, but you realize that - let alone that studies basically shows that anyone who end up picking winning funds on the long run is down to luck - people can't mathematically beat the indexes on average...
I think the only thing Dave isn’t honest about, is that he preaches investing, but made his net worth in real estate and his business. His actively managed funds are just the cherry on top.
Mr Ramsey relies way too much on his millionaire study to make his arguments, and it's hugely influenced by survivor bias. Just because a lot of people have done something does not mean that is the key action you need to be doing, or that is the best way to do something. His argument about a lot of millionaires made their wealth by using actively managed mutual funds is based on correlation and not causation. The real reason is that these folks are investing their money over a long period of time. They would make more money if they used index funds, but maybe they never heard of index funds or index funds weren't available when they started investing so they just went with what they thought was the best thing to do at the time.
On top of the fact that his millionaire study uses his own audience that kiss the ground Dave walks on
There’s more than one way to skin a cat. I respect Ramsey and his ways, I respect the money guys and theirs, I respect Warren Buffets and so on. I take a combo of all the things I learned and apply them how I see fit. Nothing wrong with different perspectives, people get so butthurt by opinions these days.
@@abrahamflores2566 I think you may be correct. Though they claim they only used a 50% fan base and 50% haven’t heard of Dave Ramsey. Idk.
I believe the first index funds that were available to the general public didn't appear until about 1976 and then were not immediately well known at first
What was available to the wealthy investor who died 20 years ago in his 90's were not the same investments that are available to us now.
@@davidpowell3347 I didn’t even know index funds were a thing until sometime last year. All I ever heard about were mutual funds, stocks, bonds, real estate, & precious metals.
Dave's advice is aimed at the lowest common denominator. It's perfect for non financial people who don't understand how debt/savings/spending/investing all work together. Yes you can become a millionaire, but you could do even better with more time spent learning about investment strategies.
This is gold. I actually respect Dave a lot for this. The reason he is often so over the top is because his average listener is the nascar watching fellow in a trailer with $30K in credit card debt. He HAS to beat people over the head to help them. He’s done great work for his goal. Doesn’t mean it’s the best for everyone however if everyone did his plan they’d at least retire
Sure, if you are a financial wizard you can do fantastic, but Dave's audience generally are rank beginners that need direction and discipline.
He finds people who think credit cards and car loans are a good idea and convinces them that active investing in actively-managed mutual funds is a less worse idea. A saint? Hardly
@@nookymonster1 The fact that they are beginners is all the more reason to recommend index funds over just about any other kind of investing
@@jmnthe3rd , I am a millionaire because I followed his plan. It works. If you have a better plan, go for it.
The biggest problem I have with Dave (and other non fiduciary FA's) is that he never mentions the pitfalls of front end loads and high ER funds... even if an actively managed fund out performs the indexes but comes with a 5% front end load and a 1.5% ER, it is going to lose to something like a Vanguard index. Those fees can erode 30% of an investors wealth over a retirement savings lifetime... Dave is like a kindergarten class into finance but people really should "graduate" from him.
100000x True
When some noobie preaches "Dave Ramsey said....." I just roll my eyes
Yes on paper. But someone buying and holding high fee funds can come out ahead somebody timing the market with index funds.
@@harrisonwintergreen1147 agreed, never said anything about trying to time the market.... For the average investor and assuming dollar cost averaging, high fee and front end loaded funds are a bad idea. Because for the most part, a no front end load and low ER equivalent is out there that will out perform your "Dave Ramsey/Edward Jones" front end load scam fund. However, if we are talking higher returns, entering the world of capital efficiency using derivatives will destroy average market returns but the learning curve and time commitment is quite steep. But once you learn it, you'll never go back to the "buy and hope" strategy.
Which leads to Rule #1 don’t invest in something u don’t understand….And get a multiple opinions. Do your homework!
@@harrisonwintergreen1147
Huh? Who said you should try to time the market with index funds? The whole *point* of buying a broad index is to buy it and hold it. Trying to time the market is stupid no matter WHAT you invest in.
Well caller is right. Passive wins everytime. Its a shame Dave wont admit it.
I remember watching this video on TH-cam (it was awhile ago and you can tell by the old intro). The caller made some valid points but didn’t do it in the right way. I don’t agree with everything Dave says either, but I also can’t deny that he’s helped thousands of people get out of debt and help build their financial mindset.
I agree that index funds are a better way to go. I think Dave does a great job for the masses but when it comes to real investors there are many other options other than mutual funds. The expenses really add up over time with actively managed funds.
The caller may have been a jerk, but keep in mind Dave has been spewing equally jerky language about people who understand investing basics, unlike him. He always doubles down and gets more aggressive any time someone politely disagrees with him. So as far as I'm concerned, this type of caller is what Dave had coming to him.
Caller wasn’t a jerk. He delivered the same communication style Dave does in many calls
Exactly
I love you guys! What a class act. My only issue with Dave is if a person is 30 and just finished med school with 200k worth of debt by the time they finish paying that off they might have missed 10 years of investing which is time in the market they simply can’t get back. Not a good idea to me
Have you ever listened to Dave? At no point has ever suggested they would take 10 years to pay off 200k as a doctor. Even a casual listener would know this.
His advice would be to pay off medical school debt in 18-24 months. And picking up extra shift (moonlighting) to do so. Ironically, his advice is probably most relevant for physicians who tend to be horrible with money and arrogant as well.
@@DavidRamseyIII re read that, a 30 year old ALREADY missed 10 years of investing
It’s not a good idea. Invest immediately at least to get the company 401k match and some return. You’ll have more money after 20 years by investing early vs Dave’s flawed approach
It would take you 2 or 3 years eating rice and beans like Dave would say to pay off 200k if your a doctor.
The thing is if Buffett is setting up index funds for his wife as part of his estate planning strategy, maybe we should pay attention? I'm not a huge fan of actively managed funds but I actually have a brokerage account where I can play. I use it to highlight why I use index funds.
I wish I could find where and what the exact number is, but it’s only like 5% or 10% of buffets total wealth that will go to a S&P 500 fund
@@naidnarnya9448 he's donating his shares of Berkshire to charity, but 90% of the cash (for his family) will be used to buy index funds and the remaining 10% in government bonds.
@@gobot4455 are you saying that you don’t have actively managed funds, but you point to you not doing well with single stock investments as if that’s the same thing as mutual funds? I have actively managed funds that have trounced index funds net of fees for decades
Lol I have the same kind of brokerage account with much less money in it than my other accounts that I can “play with” that highlight why are use index funds.
@@naidnarnya9448 he is leaving about one percent for his wife in an s&p fund, the rest to charity.
Great show guys. Way to break it down.
Dave’s not stupid. He knows exactly what he’s doing and saying. He’s not a financial advisor. He’s a businessman who sells products and services and he’s $10M richer for it.
The saddest thing here is I think the caller was right about most of his claims. Actively managed funds almost always DO underperform a simple passively managed ETF like VTI or VOO, whether it's because their annual returns are lower, or it's because their high fees erode their otherwise decent returns. But the way the caller came out of the gates being needlessly and aggressively confrontational really undermined his point. I disagree with Dave on most things, but his cohort's remark about the caller's attitude isn't one of them.
You have to understand who his audience is. If you were talking to the people he's talking to, you would not be disagreeing with "most" of what Dave says, maybe just a small portion
Dave isn’t a financial advisor. He’s gives life advice . His advice usually works best with stupid people.
If you can make “stupid people” rich with your financial advice, I think that makes you a great financial advisor 😅
@@lauromartinez8948 it’s not financial advice. Calculators agree with financial advice.
@@samuelfranklin4366 calculators don’t account for things like motivation, risk of unexpected things and behavioral psychology.
@@lauromartinez8948 right. He’s a life coach.
Most people are stupid
You don’t have to agree with Ramsey on everything, but being debt free is the key to financial freedom 100%
Credit to Dave for where I am right now, debt- free. You guys are fantastic .
The credit belongs to you. Unless Dave gave you the money to pay your debts lol
@@darbyohara It’s not uncommon to give credit to a teacher. I give credit to my piano teacher. Tho I did the work, my accomplishment is due to their instruction.
@@newagain9964 if their instruction exclusively unique to them? Or was it generic instruction anyone can do. Anyone can teach. It’s unremarkable. But teaching someone a few key strokes isn’t the same as helping someone learn to think or see the world for themselves or what it is.
@@darbyohara huh? Forget ur convoluted claims. U do realize if “anyone can do it” there wouldn’t be any need for instructors. It would all be intuitive. Right?
And as if learning piano is simply about learning a “few keystrokes”. Do u have any other oversimplifications? Ur a 🤡.
Dave does a great service by helping undisciplined people get out of debt. But he also has to make money, he charges financial coaches and financial advisors to be in his network. And those endorsed local provider’s have to push actively managed mutual funds to make their money.
He doesn't "have" to make money this way. There are a lot of people making money off of books, articles and videos alone that have no conflict of interest in the advice they give.
You were fair to Dave Ramsey. I like Dave Ramsey. Yeah, sometimes he gets on his high horse, but it doesn't bother me because I think helps a lot of people. I live debt free, but I do have a credit card which I pay off every month. Living debt free allows me to sleep well at night. I have guys that invest my money because for the most part I have no interest in managing my investments. They do a good job. They live and breathe investing. I can't know everything, so I've created a team of professionals to help me along. I keep my finger in the pie and pay attention to what is going on. Fortunately, I am a person who can think for myself. I take what I need from whatever/whomever I'm listening to and leave the rest.
He is there for most people. Most people aren't looking to be exceedingly rich. They are looking to be okay, and not living pay check to paycheck or at risk of loosing it all. They are looking for ways to be smarter about money.
@@agathachris9722 yep
Lol, the Wilson home improvement for the neighbor to the south was classic!!!
Please I want more of you guys reacting to this
After the Chris Hogan debacle where we found out he fired a woman for being pregnant, I no longer respect Dave as a man. He’s a grifter masquerading as a Christian.
Ive always been able to put aside my disagreements with Dave but I cannot respect someone who would fire a woman because she is about to be a single mother.
DR creates a lot of that noise Jack Bogle warned us about. How he treats his employees and business partners is a perfect example.
He has no integrity.
Glad you have the inside scoop. You can't believe everything you read. This is he said, she said.
If I’m not mistaken, the money guy wealth multiplier is based off of the historic returns of the S&P 500. So buying an index fund that matches the S&P 500 is going to give you i’m more close match to those kinds of returns that are stated on the chart versus an actively managed fund.
Dave Ramsey is also twisting his words a little bit at the end there. He is saying he became a multimillionaire off of actively managed funds. He became a multi millionaire selling his method of getting out of debt he might make some of his money in an actively managed fund but he became a multimillionaire from his business
Love your stuff guys
The caller is right..Dave should stick to budget advice not investment advice..Dave has made his money on his business not his investments. Its easy to say growth stock mutual funds all day long but WHICH growth stock mutual fund. never hear him say WHICH ones..
There’s a reason Dave won’t say what his “outperforming” mutual funds actually are. Lol
Look up baron partners fund
I suspect that Dave’s mutual funds are just fine.
Yeah but then some prick loses money and sues him.
😂😂 great video I'm a big Dave fan and actually find him more humble than most people give him credit for, I think you and him both make great content
Humble? He’s one of the most arrogant people on the personal finance sphere
@@darbyohara I disagree, do you listen to his radio show often?
@@tomperegrin1558 yup almost every day on my drive home. Humble means one can accept alternative ideas. Dave can’t. Then he belittles them
@@darbyohara I definitely see that in some cases, I do believe he has a "character" that he plays. Maybe genuine is better word. I know that goes against the character thing as well. To me I just think with most callers he seems very authentic in really trying to help them no matter how small their problems are compared to how much money he has.
@@tomperegrin1558 Dave isn’t genuine if he’s acting in opposition to his outspoken character and the values he speaks about online
Some of the funds that outperform the index are very aggressive funds that can very long periods of time to move up and Dave has enough money to take on that type of risk for better returns and ignore it and live his life for the rest of us this is much much harder for us to do with those very aggressive growth stocks.
The caller had a point, but with that second sentence he completely ended the possibility for a reasonable discussion. Using ad personam makes someone look not only immature, but often also insecure in the point they are trying to prove or an argument their trying to present. Not to mention someone who you can't really argue with, since they will always find something to throw back at you, no matter if their argument is valid or only an eristic statement.
Dave is a salesman. Now salesman aren't always bad and good salesman try to help you, but they dont necessarily give you the best advice since they need to make money from you.
Dave didnt make his millions from active mutual funds, he made his millions selling stuff.
Facts. I resell Lego, I'll sell a 350$ set for 300$ but only because I paid way under that. Lol I'd never tell someone what I paid or where I paid for it because then they wouldn't be happy saving 50$
I'm sure he made most of his wealth from real estate.
He's not "stupid", quite the opposite - he's a brilliant business man. The advice he gives can save you and on the other end , hamper you. Do your homework. Investing is very easy if you put a little effort into it. The 14% (I think it's more like 2% long term) that outperform the markets do not include the fees. The fees are what kills you long term. Vanguard's S&P or Total US Stock Market index funds are the gems in long term investing for me.
The fees are what are making Dave rich and killing his listeners' returns.
The funny thing about becoming wealthy is as simple as not spending as much as you make. I'll never forget I was working as a taxi driver for the CN rail company and I remember driving back this crew about 2 hours away from the location and the guy was talking about how he made $55 an hour and was still living paycheck to paycheck that told me that it has a lot less to do with how much you make and a lot more to do with what you do with your money
Ramsey's advice should be taken with a grain of salt. In one show he recommended a caller to stop contributing to the 401k and stop getting the match in order to pay off the mortgage. Ramsey didn't consider the callers age nor the low amount he had saved for retirement.
MY portfolio has good companies, however was red all through last year. My first year of investing and have been down 35% in the March/April sell off, and now down 17% in the last sell off. I work hard for my money, so investing is making me a nervous sad reck. I don't know if I should sell everything and just sit and wait.
Building a good investment portfolio is more complex so I would recommend you seek professional support. This way you can get strategies designed to address your unique long-term goals and financial dreams.
I've been trying to hire a professional after all it's what really wealthy people do, they hire more experienced persons to do the job but l can't find anyone l can trust.
I met Expert Mrs Alexia Lewis. last year for the first time at a conference in SWITZERLAND🇨🇭. I invested €25,000 and traded in one month making close to €90,000.
†𝟏𝟓𝟎𝟒𝟓𝟑𝟒𝟓𝟖𝟓𝟑 🏀🏀🏀
Frugality is an attractive quality to the majority of the population. Being frugal is about putting your dollars towards the things you care about and not overspending on the things that don't matter.
When you're going though financial peace it doesn't matter whether you're in index or actively managed mutual funds, believe me some people think they're making a killing in their bank savings account. Just get out of debt and then save your money and become financially literate how to make your money grow, you'll find what works best for you
Funny thing is I just watched the original compilation video this is from when you posted this yesterday.
I use both. Some of my actively managed funds on fidelity did 60% in a year. That makes up for their tiny fee. I also have over 50% in index funds because I'm not going to pretend I'm a genius. It's all about risk tolerance. I'm willing to risk part of my portfolio to make higher gains. I'll still be a millionaire either way because of the habit of saving. What I put it in really is less important than the habit of putting it away.
Listen to Dave Ramsey on budgeting and reducing debt. DO NOT listen to Dave Ramsey on investing.
I approve the Boba Fett mug!
Normally, when I see reaction videos I think "lowest common denominator. Nothing to see here, no value added". But the money guys actually did a good job, putting in appropriate calculations and fact-checking BOTH the caller and Dave Ramsey. Good job.
My investing class in my MBA taught that index fund investing is better in the long run if you just want to dump money into it and forget it.
Great video!! Y'all should do a react video to Marko Whiteboard Finance sometime 👀
Dave also wants to sell you on his active fund advisors
You guys are forgetting that Dave most likely gets a cut of the action of every SmartVestor referral from his show. If this is the case, then yes, him having it all in mutual funds is a bigger payoff. He gets the best of both worlds and does not contradict himself. I have to hand it to him, he is a very good and shrewd businessman.
My brother in law is a big Ramsey fan. He asked me some questions on investing and kept throwing in "Ramsey" says do this and "Ramsey" says do that. That he is a great "financial advisor" blah blah blah. I told him that Dave's advice for people who are in debt is solid but I wouldn't rely on his investment advice. We kicked that back and forth with him disagreeing with my assessments. I asked him how long he had been a Ramsey fan and he told me at least ten years. Then asked if he followed his "baby steps" and his reply was priceless. He told me that he made it between 2 and 3 but was struggling in completing 3. This from a 75 year old that still works full time because he has to. He finally admitted that he watches Ramsey more for the entertainment value than any other reason.
Dave handled that caller (Chris) well. Chris was not cool to talk to Dave or anyone that way. Complete disrespect. However, Dave talks to some of his callers that way as well. I used to love listening to Dave but once he started adding his political, religious & Covid related views, I had to check out. If I wanted to hear about those topics, I’d turn on the news or listen to an evangelist. There’s another guy that did that and I had to unsubscribe! Keep it separate! This world is messed up enough already - I go to financial, investments, savings, retirement type channels because that’s what I want to hear about! I’m thankful that Brian & Bo are conscious about that and they do stay away from discussing their personal views on those types of issues. Thank you for the content & the channel from which I’ve learned soooo much!
"I used to love listening to Dave but once he started adding his political, religious & Covid related views, I had to check out."
1) Lockdowns affect business, so the COVID and political views had to be mentioned.
2) Dave Ramsey gets a lot of his financial views from biblical principals, hence the religious views.
But Dave Ramsey *is* an Evangelist. Lol
Something else to keep in mind is that Dave Ramsey didn't make all of his money through mutual funds either. Ramsey Solutions isn't an accounting firm and he isn't an investment broker. He sells a product to a mostly religious, almost entirely financially illiterate audience.
Thank you! Alot of people seem to think Daves investment advice made him the millionaire he is.... when in reality it was his business
Any proof they are mostly financially illiterate or are you just talking shit?
@@joshcooper7 his program is called "baby steps" ....so yes its for financial illiterate people with no self control. That's why people succeed far more being "Davish"
There is an important factor to consider in Dave’s system of steering to to an ELP for investing which would be to put a pro in your corner who can talk you off the cliff of selling low or market timing. It’s one thing to compare rates of returns on paper but a very different things to realize them in reality while weathering bear markets. For people who can pick apart every aspect of Dave’s advice I would say they don’t need Dave, for everyone else who doesn’t even understand what a 401k or Roth IRA or simple vs CAGR returns are then Dave is a perfect gateway to get them thinking differently about money. I first heard Dave when I was about 27, and now I’m putting $1,000 a month into Roth investments at age 31 rather than buying a new car.
I met Dave in March when I did my debt free scream. He is really a nice guy.
Would that be when he’s not calling people on his show stupid? Or pushing his religious beliefs on employees? Or firing one employee and keeping another who literally both break the same company policy?
@Prey R he’s not consistent
Can't wait
Regardless of who is correct, don’t start a conversation by calling someone stupid. That was rude and he’s lucky he didn’t just hang up on him immediately which is what he deserved.
When are you guys gonna have Dave on the show?!? Would love to see you guy sit down and have a conversation with him
Oooo the intro music is hype
Thank you for calling out Ramsey’s misinformation. He’s a great debt coach. Beyond this, he’s a bozo.
He is 100% for people that can’t comprehend money management and have a debt problem. Be wary though, his cult members are lurking in this thread for non-believers… 🤣
If you are financially stable you are beyond the need of dave ramseys advice. I have no need to listen to him
Dave is indeed arrogant, and his investment advice is outright outdated and arguably terrible.
But the fact of the matter is, he is good with teaching people who are clueless and have lots of terrible financial knowledge.
That is his niche whether Dave admits it or not.
Dave is a good person to start with but definitely not advice to follow if you want optimal results.
I always viewed Dave as a financial drill sergeant in financial bootcamp. Tough love in the beginning to get people in financial shape. Although he will lie to help his actively managed fund buddies.
His plan has got thousands from broke to millionaires. Isn’t that optimal ?
@@akin242002 Yep. Financial incentives can compromise the critical faculties of an individual -- a well established fact, and a definition for a conflict of interest. Dave Ramsey is no exception to this. The baseline quote is "It Is Difficult to Get a Man to Understand Something When His Salary Depends Upon His Not Understanding It" (unclear to whom it should be attributed, but most commonly Upton Sinclair). As already said, Dave Ramsey has his preferred advisors from whom he gains advertising $/commissions. Those advisers, often have their own conflicts of interest specifically SELLING (not advising, selling) high expense, actively managed funds that in vast, vast majority of cases underperform.
Here, on this forum these are basline, published and proven facts in the economics literature, and stating such facts is simply preaching to the choir. I wonder how that conversation went off among the Dave Ramsey faithful...
He's got good financial advice 👏. But he is abnoxious and can be rude making people feel dumb. I don't agree with his religious opinions.
I will say, this was a great video. I mean we all have our bias and that's okay. As long as we are open and honest with all of our clients, that is what matters most.
The clients
Dave Ramsey definitely motivates you to get out of debt and live debt free. I enjoy listening to what this channel (The money guy show) and Joseph Hogue have to say about investing.
The question seems fair to discuss but the way he asked was totally wrong. In reality, no one wants to talk with the person who calls him/her stupid.
💯
Dave calls people stupid all the time. He can't just admit he doesn't know it all and never open to other ideas that may be better. There's nothing wrong with other people having better strategies one person can't know it all.
I definitely like index or ETFs better than mutual funds.
Bo's reaction in the first 3 seconds to that first comment had me for the rest of the video!
Honestly, the caller said what all the people type in the comment section. Choosing to have someone actively manage your account is silly af