Dave Ramsey on new car purchases.

[CKN]

Originally Posted By: supton
Anyone look at what is paid out in fiance on a typical mortgage?



Taking a loan out to buy a property is the only way the vast majority can afford to buy houses. In many locales-if you try to save up the money to pay cash-the houses appreciate faster then you can save. Again, in many states and major cities rents now equal a house monthly payment.

When I was younger I purchased 4 rental properties-I was mortgaged up to the hilt, they were all rented consistently over the years, are now paid off and provide an income steam which let me retire at 54 years of age. If I would have listened to Dave Ramsey, this wouldn't have happened.

Now it's my understanding that Dave did the same thing (on a much,much larger scale) and this was one of the reasons for his financial ruin at a young age.

 

[Mykl]

Originally Posted By: CKN
I look at it like this-It's easy for a multimillionaire to tell everybody to follow his example and pay cash.

Let me repeat-he is a MULTIMILLIONAIRE!


I drive frequently between Northern Utah and Southern California. There are miles and miles of desert with NO SERVICES whatsoever. I am not doing this EVER in a car with 150,000 miles on the odometer. It's not going to happen!


Would he be more credible if he was poor and broke?

 

[Bladecutter]

Originally Posted By: supton
Whatever. I'm just sure everyone is envious of my base model Toyotas.


Ummn, not really?

I have a base model Ducati SuperBike, does that count?

So, I guess most of the time I do agree with you.

But, I also like my cars a heck of a lot more than you do.
I buy cars that I like to drive, where as you buy cars that cost you less to operate.

To each their own.

BC.

 

[CKN]

Originally Posted By: Mykl
Originally Posted By: CKN
I look at it like this-It's easy for a multimillionaire to tell everybody to follow his example and pay cash.

Let me repeat-he is a MULTIMILLIONAIRE!


I drive frequently between Northern Utah and Southern California. There are miles and miles of desert with NO SERVICES whatsoever. I am not doing this EVER in a car with 150,000 miles on the odometer. It's not going to happen!


Would he be more credible if he was poor and broke?


Let me say this again-he has very little credibility IMHO telling average people to pay cash for vehicles, when he is a multimillionaire. I listen to another "financial guy" Clark Howard who lives in reality. He will tell you which credit cards get the best rebates(all tho not to carry a monthly balance), which banks offer the best interests rates for mortgages, cars, etc.
This is real world-at least for average guy.

 

[Mykl]

Originally Posted By: CKN
Let me say this again-he has very little credibility IMHO telling average people to pay cash for vehicles, when he is a multimillionaire. I listen to another "financial guy" Clark Howard who lives in reality. He will tell you which credit cards get the best rebates(all tho not to carry a monthly balance), which banks offer the best interests rates for mortgages, cars, etc.
This is real world-at least for average guy.


I don't really like Dave Ramsey all that much so it pains me to have to defend him.

I think that trying to sum up his experiences and lessons with "pay cash for vehicles" is doing him a disservice.

Seek advice that best fits your needs. My opinion is the message you need to take away from what Ramsey says is that you should be very deliberate when deciding to take on debt. It should require thought, planning, and reason. If nothing else it should shock you out of the mindset of going to the dealership every three years and trading a perfectly good vehicle in on something newer that pushes your payments out for a number of additional years.

 

[CKN]

We agree that you need to think about taking on any debt. But Mr. Dave basically says don't take on ANY DEBT except for maybe a house to live in.

 

[Hokiefyd]

Originally Posted By: dishdude
Dave Ramsey is for people that have zero financial common sense.


This has been seconded already, but I'll third (or fourth...or fifth) it. And I don't see it as a negative thing. Some people don't have the desire to be financially-savvy. And that's okay; I don't have the desire to learn how to figure skate. That's alright, too. For people like me, the best advice for skating is to stay close to the wall. Got it. That's what Dave Ramsey's advice for many people is: stay close to the wall. If you never (or rarely, if you except your house) become financially indebted, it's much harder to get behind in your finances. They learn a new culture of cost-conscious living where cash is used 100% of the time, and it works. It's fine advice...you can't spend cash you don't have, right?

His advice is a little too...hmmm...single-tracked for others. By that, I mean you leave a lot of opportunity on the table with just one way of doing business. His advice is really just a fresh coat of paint on the classic notion of minimizing risk and reward at the same time. Not unlike money market accounts and bonds vs. small company growth stocks. One is likely to be much more profitable than the other...but it also carries much more risk.

Ramsey's advice for financial management is no different. I appreciate that he's a big name brand giving safe financial advice to many people. With a little attention to what you're doing, however, and with the right desire, I think most folks can do just as well not being on the Dave Ramsey plan...

 

[Jarlaxle]

Originally Posted By: CKN
I look at it like this-It's easy for a multimillionaire to tell everybody to follow his example and pay cash.

Let me repeat-he is a MULTIMILLIONAIRE!


I drive frequently between Northern Utah and Southern California. There are miles and miles of desert with NO SERVICES whatsoever. I am not doing this EVER in a car with 150,000 miles on the odometer. It's not going to happen!


I guess I shouldn't mention my brother's platoon-mate doing North Carolina to Seattle in a 245,000-mile Concorde, then?

I would have done it in my 300,000+ mile F350 in a second.

 

[CKN]

^^^^^^^^^^^^^^^

Not me...to each his own!

 

[gfh77665]

Originally Posted By: andrewg


Buying a "used car in good condition" doesn't always go hand-in-hand for folks that don't have $10k cash to spend on one. But yes...if a person has enough cash (very, very, difficult for folks starting out and with a couple of kids), the skills and ability to tell if a vehicle is mechanically sound, and SOLID employment/money flow, then it would be great to avoid financing one. But $8-$10k? Not likely. Most folks, even thrifty ones, would be hard pressed to have that much. More like $5k to $7k. And nobody said anything about a $32k car.



We were penniless kids back in the early 80's. I started to care for my future wife a year before we married, because her family was dead broke. She was 17, living with them, but I bought her a $500 car so she could finish her senior year of high school. I drove a beat up PU truck, working part time at Sears and going to college.

She graduated HS, and started college, I paid for all of it by leaving college and getting a contact industrial job, and still worked at Sears nights and weekends. She started driving my PU after we married (it was a bit better) and I commuted in the $500 car.

We lived in a modest apartment and I banked all I could. After a few years of financial discipline and sacrifice, she got a good job at NASA, and I got a full time technical job in industry. We, in our early 20's, bought a new car for $9000 cash. We lived on what I made, and banked hers. In our late 20's. we paid for a $67,000 house, in cash. Debt free.

No one even thinks like this anymore. I know a young family of 5 today that is having trouble making their rent. I came by to visit him last month, and he has a new 2015 Lincoln Navigator sitting in his driveway. You see, "...his family deserves the best". Go figure.

So, OK, even a "$5000-$7000 car" thats paid off is attainable, but few are interested in it. They want that 32K car, that I mentioned earlier.

Dave tries to break the public from its obsession with debt. I appreciate him.

 

[supton]

Originally Posted By: Bladecutter
Originally Posted By: supton
Whatever. I'm just sure everyone is envious of my base model Toyotas.


Ummn, not really?

I have a base model Ducati SuperBike, does that count?

So, I guess most of the time I do agree with you.

But, I also like my cars a heck of a lot more than you do.
I buy cars that I like to drive, where as you buy cars that cost you less to operate.

To each their own.

BC.


Yep, I hear you. In the last couple of months I've come to the conclusion that, after driving at least 437kmiles in less than 15 years time, that I don't really enjoy driving. I like going places; but I've got no desire for exploring the outer limits of a car. Driving is just a means to an end. Maybe when I get a garage wrenching will be fun, but until then crawling around in the dirt isn't that much fun. Less so in the rain, although it's not so bad once the ground freezes up.

Cheers!

 

[supton]

Originally Posted By: gfh77665
Originally Posted By: andrewg


Buying a "used car in good condition" doesn't always go hand-in-hand for folks that don't have $10k cash to spend on one. But yes...if a person has enough cash (very, very, difficult for folks starting out and with a couple of kids), the skills and ability to tell if a vehicle is mechanically sound, and SOLID employment/money flow, then it would be great to avoid financing one. But $8-$10k? Not likely. Most folks, even thrifty ones, would be hard pressed to have that much. More like $5k to $7k. And nobody said anything about a $32k car.



We were penniless kids back in the early 80's. I started to care for my future wife a year before we married, because her family was dead broke. She was 17, living with them, but I bought her a $500 car so she could finish her senior year of high school. I drove a beat up PU truck, working part time at Sears and going to college.

She graduated HS, and started college, I paid for all of it by leaving college and getting a contact industrial job, and still worked at Sears nights and weekends. She started driving my PU after we married (it was a bit better) and I commuted in the $500 car.

We lived in a modest apartment and I banked all I could. After a few years of financial discipline and sacrifice, she got a good job at NASA, and I got a full time technical job in industry. We, in our early 20's, bought a new car for $9000 cash. We lived on what I made, and banked hers. In our late 20's. we paid for a $67,000 house, in cash. Debt free.

No one even thinks like this anymore. I know a young family of 5 today that is having trouble making their rent. I came by to visit him last month, and he has a new 2015 Lincoln Navigator sitting in his driveway. You see, "...his family deserves the best". Go figure.

So, OK, even a "$5000-$7000 car" thats paid off is attainable, but few are interested in it. They want that 32K car, that I mentioned earlier.

Dave tries to break the public from its obsession with debt. I appreciate him.


I think I agree. Although I saw a few people avoiding debt growing up, it was pretty much completely commonplace. Everyone does loans. Why not me?

I doubt I'll ever get off the debt train but it's a good kick in the rump for me.

 

[grampi]

Originally Posted By: gfh77665
Originally Posted By: andrewg


Buying a "used car in good condition" doesn't always go hand-in-hand for folks that don't have $10k cash to spend on one. But yes...if a person has enough cash (very, very, difficult for folks starting out and with a couple of kids), the skills and ability to tell if a vehicle is mechanically sound, and SOLID employment/money flow, then it would be great to avoid financing one. But $8-$10k? Not likely. Most folks, even thrifty ones, would be hard pressed to have that much. More like $5k to $7k. And nobody said anything about a $32k car.



We were penniless kids back in the early 80's. I started to care for my future wife a year before we married, because her family was dead broke. She was 17, living with them, but I bought her a $500 car so she could finish her senior year of high school. I drove a beat up PU truck, working part time at Sears and going to college.

She graduated HS, and started college, I paid for all of it by leaving college and getting a contact industrial job, and still worked at Sears nights and weekends. She started driving my PU after we married (it was a bit better) and I commuted in the $500 car.

We lived in a modest apartment and I banked all I could. After a few years of financial discipline and sacrifice, she got a good job at NASA, and I got a full time technical job in industry. We, in our early 20's, bought a new car for $9000 cash. We lived on what I made, and banked hers. In our late 20's. we paid for a $67,000 house, in cash. Debt free.

No one even thinks like this anymore. I know a young family of 5 today that is having trouble making their rent. I came by to visit him last month, and he has a new 2015 Lincoln Navigator sitting in his driveway. You see, "...his family deserves the best". Go figure.

So, OK, even a "$5000-$7000 car" thats paid off is attainable, but few are interested in it. They want that 32K car, that I mentioned earlier.

Dave tries to break the public from its obsession with debt. I appreciate him.





I served in the Air Force with a guy who was incredible with money...he and his wife paid cash for everything, including a $125K home! He was the envy of every officer in our work center, and he was only an E-4...to this day, I still don't how he did it...

 

[gfh77665]

I have not deviated from these same financial principles even up through today. Its Biblical based financial stewardship. I have been blessed beyond all that I ever dreamed of.

 

[Mr Nice]

Has anyone see Dave Ramsey's house in Tennessee ?

 

[Silverado12]

I think it's a very good thing not to be materialistic. Been there, done that and at the end of the day, my old C-10 got me around just as well as the new truck. Ramsey had some good ideas, but the little political stabs in that video reminded me I was watching Fox News. He lost most if not all credibility then.

 

[otis24]

"He is a millionaire". Maybe he is a millionaire because he learned his lessons the hard way and chooses not to repeat those mistakes. He is trying to show us all how we can be millionaires, or at least a lot less poor, by using common sense.

Many of us do have to buy a vehicle on credit, if we want a reliable vehicle. I was in car sales and many people wanted the "best" or an "suv", which was way more vehicle than they needed or could afford. Many of them paid 25% to 35% intrest. Their cars had over 100k miles in less than two years and they owed more than the cars were worth because they made no dent in the principle due to the high intrest rates.

People who buy on credit do need to learn the difference between a need and a want. You may need a mini-van to haul your family. You don't need a mini-van with a sun roof, leather interior, navigation and DVD player. Not when you have $1000 down, a 600 or less FICO and make a little over $2000/month and are paying 20% intrest.

 

[CKN]

Originally Posted By: gfh77665
Originally Posted By: andrewg


Buying a "used car in good condition" doesn't always go hand-in-hand for folks that don't have $10k cash to spend on one. But yes...if a person has enough cash (very, very, difficult for folks starting out and with a couple of kids), the skills and ability to tell if a vehicle is mechanically sound, and SOLID employment/money flow, then it would be great to avoid financing one. But $8-$10k? Not likely. Most folks, even thrifty ones, would be hard pressed to have that much. More like $5k to $7k. And nobody said anything about a $32k car.



We were penniless kids back in the early 80's. I started to care for my future wife a year before we married, because her family was dead broke. She was 17, living with them, but I bought her a $500 car so she could finish her senior year of high school. I drove a beat up PU truck, working part time at Sears and going to college.

She graduated HS, and started college, I paid for all of it by leaving college and getting a contact industrial job, and still worked at Sears nights and weekends. She started driving my PU after we married (it was a bit better) and I commuted in the $500 car.

We lived in a modest apartment and I banked all I could. After a few years of financial discipline and sacrifice, she got a good job at NASA, and I got a full time technical job in industry. We, in our early 20's, bought a new car for $9000 cash. We lived on what I made, and banked hers. In our late 20's. we paid for a $67,000 house, in cash. Debt free.

No one even thinks like this anymore. I know a young family of 5 today that is having trouble making their rent. I came by to visit him last month, and he has a new 2015 Lincoln Navigator sitting in his driveway. You see, "...his family deserves the best". Go figure.

So, OK, even a "$5000-$7000 car" thats paid off is attainable, but few are interested in it. They want that 32K car, that I mentioned earlier.

Dave tries to break the public from its obsession with debt. I appreciate him.





Your story is one of a GREAT AMERICAN SUCCESS STORY. Congrats! However, times have changed. Buying a house for cash is just about impossible. And getting a half-decent job NOW just about mandates a college education (more debt). Don't get me wrong. I went to a two year trade school and made great money in outside sales. But even those jobs today require a degree in business or marketing. Dave also says on his radio show-the school(college) a potential job candidate goes to (when he is hiring) is secondary to other factors. It maybe in his company, but in real world a diploma from a well-known university moves you closer to the top of the list.

Dave Ramsey tells several "truisms" (to him) that just are not "true".

 

[Mykl]

Originally Posted By: gfh77665
I have not deviated from these same financial principles even up through today. Its Biblical based financial stewardship. I have been blessed beyond all that I ever dreamed of.


I'm not sure how the Bible does or does not make any particular financial plan more or less effective.

 

[SevenBizzos]

If I have $10,000 laying around I can either a) invest it and get a >10% return and then have someone give me a car loan for 2.5% or b) pay cash for a car.