I discovered Dave Ramsey after i learned about personal money management, and i am extremely grateful i didn't run into him first. I dont even want to put a dollar value on the amount of return i would have lost if i had put my head down and focused all my money on my student loans. I merged one and three by putting money into a Roth. Thanks to not having missed out on the returns (and having extreme job security), i was able to withdraw my contributions and use it for a down payment. The amount that was still in the account after the withdrawal was greater than all the money i had put in over 5 years!!! I feel bad for anyone that missed the bull market prior to 2020 (and the summer of 2020)
First, I absolutely love the podcasts, been listening from the beginning. The one on the "why do we invest in the market" was fabulous. I love to ignore the noise of the daily news. I am a Dave Ramsey fan, been debt free for years, I'm 52 now. The feeling of having everything paid off is amazing. I do disagree with you on not paying off the house, what you are not calculating is risk and peace. When you have no payments you have plenty of money to do what ever you want to do like investing, It's really fun buying a new car cash, a home improvement, helping out the animal shelter. Love you both but I'm with Dave Ramsey, he has to keep it simple for the majority of the people that are struggling. Thank you for all your wonderful information that you provide.
I'm a loyal Ramseyite as well! I do deviate with Dave on paying off your mortgage (depending on the interest rate) and Credit Cards (for those of us who have a solid income and can control ourselves!). I'm a self made Millionaire and think I can say this with confidence. It is Not advice for everyone though
I think knowing what is right for you is easier as you get into your 50s. You know your lifestyle and what you desire in retirement, so you can calculate your number ($$$$) needed in retirement cashflow. When you are in your 20s and 30s, you just do not see that far out so it makes sense to save at least 15%. You can always push harder at the end, but you can never make up time in the market. Great video! I like Dave Ramsey's principles, especially for people that have no self-discipline and need a checklist to follow. I, like you have a few caveats that work better for me.
Mathematically, Dave's steps aren't that great - but psychologically, his steps are great. I think that's why he advocates those steps in that order, due to psychological effect
Love this video. Wish I had this advice when younger. I followed some without knowing but could have been more frugal. Now I understand why a some people I know were frugal. They are now retired at 62 with no debt.
Great video. Your “know yourself” message was very helpful. I’m a little older with a pension so it’s good to hear that I shouldn’t feel bad about adjusting the “baby steps” a little!
Excellent video! I too modified the baby-steps and got Excellent results! Changed my life! I am a huge Dave Ramsey fan but don't agree with his plan 100%. But without a doubt it is an excellent foundation. I recommend it to anyone that is carrying debt aside from a mortgage. I am on baby-step 6 and struggling with paying extra on my mortgage or saving more in a taxable brokerage account to give me more options as i go into retirement, which is only 3 years away.
I believe that Dave Ramsey's podcast isn't just about finance; it's about freedom and empowering people to take control of their lives so they can build a stable future. Even if he were paid to take out a loan, he wouldn't because he would never become beholden to anyone.
Great to hear your perspective on The Baby Steps. Too often they are positioned as a black & white choice, but I've modified them in a very similar fashion as you suggest and it has truly changed my financial well being over the past couple of years that I've been following them. We have a goal of buying a second home, but I never wanted to do that until my first mortgage was paid off, but with rates today, I am far more comfortable investing to buy that second home for cash and I'll payoff my current 2.25% mortgage per the schedule. It would be crazy to walk from that rate today!
You're right that you have to know yourself. When it comes to the mortgage, I'm in the camp that says a paid-off home is priceless. When the home is paid-off, you can invest the money you were using for the mortgage at the best return you can find.
I still have student loan debt, but I'm investing in the market as I'm paying it off. DR would not approve 😂 and I'm glad I did. I'm in my 30s and hit major investment milestones that will have enough time to compound before retirement. The student loan debt will still get paid off, but paying off debt is far from the only financial goal I need to consider.
I'm really turned off by how Dave Ramsey belittles people on his show. But, I also have to admit he set me on a path to having a more secure relationship with my money
@@CheckThisOut77 Yes. But he purports himself to be this holier than thou Christian and follows all the teachings of the Bible. His behavior and the way he talks about other people and their ideas run counter to that.
This was great. I have been a Dave Ramsey follower for about 20 years. It has been great for me, and I am much further along than I would have been on my own, but I have always wondered about the 12% returns. Anyone know what the geometric calculation of S&P gains comes to?
I am a C-level finance exec, and my largest critique of Dave is his declaration of 12% returns and an 8% SWR Assuming an 80/20 stock/bond mix, which will be too aggressive for a lot of people, I would rely on a long-run withdrawal rate between 3.5 - 4% annually. Mathematically, 2 out of 3 people who try to withdraw 8% annually will run out of money before 30 years have passed
Great video, but on paying off one's mortgage vs investing, one should also consider the net return on investment after paying taxes on the investment gains. This reinforces the recommendation.
Saving for retirement by definition is always at the expense of what you’re doing today. You can’t simultaneously spend the money you’re saving for retirement on your lifestyle and save it for retirement.
200k at 4% is not better than a paid off mortgage at 3%. You would be taxed on that 4% whereas a paid for house = zero tax. Pay off the house, and use the money you'd otherwise commit to mortgage payments to invest (at 4% in a CD if you must, but that seems like a waste).
"Pay yourself first". "Cash is king"! In other words if you do not have the money do not buy it....shop and find the lowest price for that which you want to buy...use your cell phone. Buying a tv? Check Amazon Amazon Costco. Etc etc. Buy store brands...a dollar saved today is a dollar spent tomorrow. Buy a new car for $28000 or find a good used car same make and model for $14000. If you have nillions who cares..most of us do not...😮😊
The issue I have with his process is waiting until step 4 to put anything in your retirement accounts. If your company has a 401k with match you are giving up FREE money. Depending on your situation it could take a long time to get to step 4.
I am simply not a DR fan, but it has more to be with him being a narcissist and no matter what not updating his steps based on the environment. It made sense to pay down a mortgage when you have a 10% or higher rate, absolutely! However, for him to not adjust based on sub-3% rates and still push his flock to pay that down is damn near criminal! Good to hear your thoughts on the EF, his doesn't change at all. It truly frustrates me is when he speaks with military personnel, more so retired military. Take me: I am a retired Air Force E-9 with a high VA disability rating. My wife is a 10+ year Federal employee making 6 figures and her job is the most secure on the planet! Even if I don't work, which I do and also make 6 figures, we make $183,000 annually. Again, this is if I don't work. Our mortgage is a 2.25%, $1600 a month on a 2014 build, 3,500 sq ft home. That's all! He would still tell me I need a 3-6 month EF. He can't give any other reason but, "life happens". No, that life doesn't happen in my situation.
Retired Air Force E-7 as well in similar situation as yourself and I agree 100%. IMO Dave Ramsey's plan doesn't apply to everyone. Commen sense money management skills and financial discipline goes a long way. It also helps to have a big shovel in terms of your income. I'm sure with the shovel you and your wife have, your "emergency fund", ie bank accounts are way more than that 6 months he suggest. I know ours is.
@@kenqman Exactly! Dave serves a purpose for those who can't properly manage their money. Hopefully they gain tht required education and break away from Dave to truly amplify their wealth growth.
If you are savvy enough to use a 2% mortgage and invest to make more in the long run, and actually invest and do keep it, he isn't talking to you. If you have 3 maxed out cards, and a mortgage, you aren't ever going to invest to make a profit until you deal with the bad habits that got you where you are at. The reason he doesn't make changes, is most people that need his advice are always looking to cheat. Start to bend here and there, cheating from your students gets a lot easier.
Stop the insanity and don't pay for your kid's college and possibly retire years earlier. Let them go into debt. They have plenty of time to pay it off.
Ramsey's basic tenant of staying out of debt makes sense. Otherwise he is a despicable human giving lousy advice... James's clients are more advanced than needing Ramsey.
My motto even before I knew of Dave Ramsey is “you are never sorry you’re out of debt”.
Glad it was helpful!
I discovered Dave Ramsey after i learned about personal money management, and i am extremely grateful i didn't run into him first. I dont even want to put a dollar value on the amount of return i would have lost if i had put my head down and focused all my money on my student loans. I merged one and three by putting money into a Roth. Thanks to not having missed out on the returns (and having extreme job security), i was able to withdraw my contributions and use it for a down payment. The amount that was still in the account after the withdrawal was greater than all the money i had put in over 5 years!!! I feel bad for anyone that missed the bull market prior to 2020 (and the summer of 2020)
First, I absolutely love the podcasts, been listening from the beginning. The one on the "why do we invest in the market" was fabulous. I love to ignore the noise of the daily news.
I am a Dave Ramsey fan, been debt free for years, I'm 52 now. The feeling of having everything paid off is amazing. I do disagree with you on not paying off the house, what you are not calculating is risk and peace. When you have no payments you have plenty of money to do what ever you want to do like investing, It's really fun buying a new car cash, a home improvement, helping out the animal shelter. Love you both but I'm with Dave Ramsey, he has to keep it simple for the majority of the people that are struggling.
Thank you for all your wonderful information that you provide.
Glad it was helpful!
I'm a loyal Ramseyite as well!
I do deviate with Dave on paying off your mortgage (depending on the interest rate) and Credit Cards (for those of us who have a solid income and can control ourselves!).
I'm a self made Millionaire and think I can say this with confidence.
It is Not advice for everyone though
Excellent video, James. I found your explanation of the "12% return" particularly helpful.
Glad it was helpful!
I think knowing what is right for you is easier as you get into your 50s. You know your lifestyle and what you desire in retirement, so you can calculate your number ($$$$) needed in retirement cashflow. When you are in your 20s and 30s, you just do not see that far out so it makes sense to save at least 15%. You can always push harder at the end, but you can never make up time in the market. Great video! I like Dave Ramsey's principles, especially for people that have no self-discipline and need a checklist to follow. I, like you have a few caveats that work better for me.
Mathematically, Dave's steps aren't that great - but psychologically, his steps are great. I think that's why he advocates those steps in that order, due to psychological effect
Glad it was helpful!
That's Exactly what he says. On his show...
Plus, one can quibble about the steps, the order and investment strategies... but if you follow his plan before you are old you won't die broke.
Love this video. Wish I had this advice when younger. I followed some without knowing but could have been more frugal. Now I understand why a some people I know were frugal. They are now retired at 62 with no debt.
I’m glad it was helpful!
I love these types of videos. Comparing known personalities.
Great video. Your “know yourself” message was very helpful. I’m a little older with a pension so it’s good to hear that I shouldn’t feel bad about adjusting the “baby steps” a little!
Excellent video! I too modified the baby-steps and got Excellent results! Changed my life! I am a huge Dave Ramsey fan but don't agree with his plan 100%. But without a doubt it is an excellent foundation. I recommend it to anyone that is carrying debt aside from a mortgage.
I am on baby-step 6 and struggling with paying extra on my mortgage or saving more in a taxable brokerage account to give me more options as i go into retirement, which is only 3 years away.
Glad it was helpful!
Great video.
Keep up the great work.
Thanks, will do!
I believe that Dave Ramsey's podcast isn't just about finance; it's about freedom and empowering people to take control of their lives so they can build a stable future. Even if he were paid to take out a loan, he wouldn't because he would never become beholden to anyone.
Yet another clear-headed ace video.
Great to hear your perspective on The Baby Steps. Too often they are positioned as a black & white choice, but I've modified them in a very similar fashion as you suggest and it has truly changed my financial well being over the past couple of years that I've been following them. We have a goal of buying a second home, but I never wanted to do that until my first mortgage was paid off, but with rates today, I am far more comfortable investing to buy that second home for cash and I'll payoff my current 2.25% mortgage per the schedule. It would be crazy to walk from that rate today!
Glad it was helpful!
Second home? Check out the TH-cams on that.
Great job, I really enjoyed this.
Glad it was helpful!
I totally agree on this new approach vs Dave's approach. This makes more sense for me. Thanks for the fresh look at this.
You're welcome, Miguel!
You're right that you have to know yourself.
When it comes to the mortgage, I'm in the camp that says a paid-off home is priceless. When the home is paid-off, you can invest the money you were using for the mortgage at the best return you can find.
I still have student loan debt, but I'm investing in the market as I'm paying it off. DR would not approve 😂 and I'm glad I did. I'm in my 30s and hit major investment milestones that will have enough time to compound before retirement. The student loan debt will still get paid off, but paying off debt is far from the only financial goal I need to consider.
I love this!!!!
Beautiful content 😊
I'm really turned off by how Dave Ramsey belittles people on his show. But, I also have to admit he set me on a path to having a more secure relationship with my money
Glad it was helpful!
Sometimes there are hurt feelings/insults on Dave’s show. No big deal. They help the wake-up call (and are more entertaining).
@@CheckThisOut77 Yes. But he purports himself to be this holier than thou Christian and follows all the teachings of the Bible. His behavior and the way he talks about other people and their ideas run counter to that.
@@scotteshanks
Why does his being a Christian equate as "Holier than thou"?
Gail Vox-Oxlade is a financial retired guru also.
Great!
This was great. I have been a Dave Ramsey follower for about 20 years. It has been great for me, and I am much further along than I would have been on my own, but I have always wondered about the 12% returns. Anyone know what the geometric calculation of S&P gains comes to?
I am a C-level finance exec, and my largest critique of Dave is his declaration of 12% returns and an 8% SWR
Assuming an 80/20 stock/bond mix, which will be too aggressive for a lot of people, I would rely on a long-run withdrawal rate between 3.5 - 4% annually.
Mathematically, 2 out of 3 people who try to withdraw 8% annually will run out of money before 30 years have passed
Great video, but on paying off one's mortgage vs investing, one should also consider the net return on investment after paying taxes on the investment gains. This reinforces the recommendation.
The baby steps are great for getting people out of debt.
Glad it was helpful!
I knew you were a DR guy and a man of faith too. God bless.
Glad it was helpful!
ty
Glad it was helpful!
Saving for retirement by definition is always at the expense of what you’re doing today. You can’t simultaneously spend the money you’re saving for retirement on your lifestyle and save it for retirement.
emergency fund should be in Roth IRA - can always take out contributions (can be in cash equiv), starts the 5 yr clock, gets legal protections
200k at 4% is not better than a paid off mortgage at 3%. You would be taxed on that 4% whereas a paid for house = zero tax. Pay off the house, and use the money you'd otherwise commit to mortgage payments to invest (at 4% in a CD if you must, but that seems like a waste).
"Pay yourself first". "Cash is king"! In other words if you do not have the money do not buy it....shop and find the lowest price for that which you want to buy...use your cell phone. Buying a tv? Check Amazon Amazon Costco. Etc etc. Buy store brands...a dollar saved today is a dollar spent tomorrow. Buy a new car for $28000 or find a good used car same make and model for $14000. If you have nillions who cares..most of us do not...😮😊
The issue I have with his process is waiting until step 4 to put anything in your retirement accounts. If your company has a 401k with match you are giving up FREE money. Depending on your situation it could take a long time to get to step 4.
I am simply not a DR fan, but it has more to be with him being a narcissist and no matter what not updating his steps based on the environment. It made sense to pay down a mortgage when you have a 10% or higher rate, absolutely! However, for him to not adjust based on sub-3% rates and still push his flock to pay that down is damn near criminal!
Good to hear your thoughts on the EF, his doesn't change at all. It truly frustrates me is when he speaks with military personnel, more so retired military. Take me: I am a retired Air Force E-9 with a high VA disability rating. My wife is a 10+ year Federal employee making 6 figures and her job is the most secure on the planet! Even if I don't work, which I do and also make 6 figures, we make $183,000 annually. Again, this is if I don't work. Our mortgage is a 2.25%, $1600 a month on a 2014 build, 3,500 sq ft home. That's all! He would still tell me I need a 3-6 month EF. He can't give any other reason but, "life happens". No, that life doesn't happen in my situation.
Uncle Sam's teat must be awful sore with all the sucking you do on it.
Retired Air Force E-7 as well in similar situation as yourself and I agree 100%. IMO Dave Ramsey's plan doesn't apply to everyone. Commen sense money management skills and financial discipline goes a long way. It also helps to have a big shovel in terms of your income. I'm sure with the shovel you and your wife have, your "emergency fund", ie bank accounts are way more than that 6 months he suggest. I know ours is.
Glad it was helpful!
@@kenqman Exactly! Dave serves a purpose for those who can't properly manage their money. Hopefully they gain tht required education and break away from Dave to truly amplify their wealth growth.
If you are savvy enough to use a 2% mortgage and invest to make more in the long run, and actually invest and do keep it, he isn't talking to you. If you have 3 maxed out cards, and a mortgage, you aren't ever going to invest to make a profit until you deal with the bad habits that got you where you are at. The reason he doesn't make changes, is most people that need his advice are always looking to cheat. Start to bend here and there, cheating from your students gets a lot easier.
First! 😃
Glad it was helpful!
There's a reason they are called baby steps. I think your subscribers are too smart to be listening to Dave Ramsey
Well said.
Dave Ramsey likes himself enough so I don’t have to.
Glad it was helpful!
Ramsey misleading people about investing is criminal
Stop the insanity and don't pay for your kid's college and possibly retire years earlier. Let them go into debt. They have plenty of time to pay it off.
sorry, at this point Dave should have a better understanding calculating returns and how money really works.
Ramsey's basic tenant of staying out of debt makes sense. Otherwise he is a despicable human giving lousy advice... James's clients are more advanced than needing Ramsey.
Glad it was helpful!
despicable? No. Lousy advice? No. People getting ready to retire (hopefully) not needing it anymore? Yes.