Dave Ramsey on new car purchases.

[gfh77665]

I am "all in" investing. The disciplined path I took has allowed me to MAX 401K and MAX Company Stock for decades now.

Save for and buy the basics with cash first, live within your means, be debt free. THEN, aggressively invest with surplus funds.

 

[HardbodyLoyalist]

Originally Posted By: grampi


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...


What did his wife do?

And was either of them a trust-fund baby?

 

[gfh77665]

Originally Posted By: CKN


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".


Thanks for the compliment. My eldest daughter is 23, single and graduated Summa Cum Laude 2 years ago with Elementary Ed/Special Ed teaching degree. She lives in an apartment and is saving for her first home. She hopes to pay cash, just as I did, before she turns 30. She can easily attain this, even with just a modest teachers income.

 

[linkbelt]

"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.

This is exactly what this guy does! I have never had to use his "programs", books, etc., but I think he does provide a valuable service, (for a fee), to people who really are over their heads with money problems. These folks don't know where to turn or what to do, he gives them sound advice, they slowly crawl out of debt.
He has a program, (classes), that he sells to church's that gives detailed instructions about how to handle money problems and how to get out of debt, etc..
I agree that his stuff is not for everone, but it is the right thing to do for many.

 

[99Saturn]

Originally Posted By: gfh77665
I am "all in" investing. The disciplined path I took has allowed me to MAX 401K and MAX Company Stock for decades now.

Save for and buy the basics with cash first, live within your means, be debt free. THEN, aggressively invest with surplus funds.

Kudos to you, but I don't understand why being debt free has to be a prerequisite to save agressively as you describe? At least given today's rates - mortgage rates at 15%-18% - different story.

 

[gfh77665]

Well, for lack of better words, the basics need to be SECURED first. Housing, transportation, etc.

Then, investable surplus funds are some "you COULD stand to lose" in a worst case scenario.

With the basics in place, and debt free, and you have freedom to invest more and invest more aggressively. Even an unlikely "worst case' can't wreck you then.

 

[99Saturn]

To me that's more a question of risk tolerance and can be mitigated by a safety net if needed. Debt itself doesn't preclude agressive savings/investing.

That aside, sounds like it's working well for you so again - kudos.

 

[Darwin1138]

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


Giving out credits at a rate below inflation??

I think the bankers are the first ones that need to listen to that guy.

 

[andrewg]

Originally Posted By: 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.


I agree.

Last place I'd go for sound financial planning is the Bible. But sure, some of the principles in that book do make good sense...but not as a whole in my opinion (as it pertains to accumulating wealth and financial power).

Last time I checked...the main fella in the New Testament was rather poor.

He didn't have any debt though...at least not financially.

 

[Darwin1138]

They don't seem poor now, maybe gfh77665 is on to something, I better go and check out that book

 

[Subdued]

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?

That's the thing. At one time he WAS poor and broke.

 

[hattaresguy]

Originally Posted By: Pop_Rivit
His advice is just that-advice. Anyone can elect to follow it or ignore it.

What he says about auto financing is smart, and anyone can do it. Following his plan takes some self-discipline, and it doesn't allow for keeping up with the neighbors. It's what my wife and I did when we were young and it has paid off handsomely over the years. It has given us the means to purchase a number of new cars over the years out of our vehicle fund, all the while earning interest rather than paying interest, and making payments to ourselves rather than someone else. At this point in our lives we choose not to purchase new, but rather purchase used, which makes even more sense for us. Just because we can afford new doesn't mean we need to purchase new.


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


You can't compare leasing or financing a depreciating asset to a mortgage on a home. And many people (at least those who are smart) manage to pay off their mortgage early-10 year mortgages are becoming quite popular.

Originally Posted By: dparm
Or that taking out a loan below the inflation rate is effectively MAKING money? Getting 1.99% or better isn't hard these days.


Better finances through loans. I think I once read the advertisement for that in the back of a magazine years ago. I knew it was nonsense back then, and it's still nonsense today. I'll choose not to be a slave to payments.

Originally Posted By: hattaresguy
A bar tender I know and was hitting on the other day started talking cars with me, she is paying...get this...13.1% on her new Mazda 3. She is the kind of person Dave here needs to help.


It certainly speaks volumes about the person who hits on someone like that, doesn't it? On a side note-bartender is one word, not two.


Yawn, do you feel better now?

 

[andrewg]

Originally Posted By: Subdued
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?

That's the thing. At one time he WAS poor and broke.


Nothing wrong with being wealthy. But one of my issues with him...and any wealthy Christians...is that they don't model themselves after THE role model that they say they subscribe to. Far too many Christians think being "blessed" means money. That book a few years back soon popular among evangelicals.."The Prayer of Jabez" is a prime example of biblical contortion.

Fantastic examples of of Christians have and do exist of course...Mother Teresa was one. But in my observations...Ramsey is all about his own wealth.

He didn't start out poor AT ALL though. He was a college graduate with a business degree. He rant some sort of investment firm, reportedly worth $4 million. He was only 26 at the time. He messed up big-time....and his notes were called. He couldn't pay up and filed for bankruptcy.

Next thing he did (as many so called Christians do when on the rocks) was focus more on what the church could do for him to get back on his feet. He then started counseling people financially at church...which led him into his current and varied money making business ventures.

 

[hattaresguy]

Originally Posted By: Clevy
Originally Posted By: javacontour
Originally Posted By: hattaresguy
A bar tender I know and was hitting on the other day started talking cars with me, she is paying...get this...13.1% on her new Mazda 3. She is the kind of person Dave here needs to help.


She suddenly became financially undesirable with that fact.


Well you know she's stupid anyway.

If she'd sign on that note there isn't much she won't do.
I assume she dropped her laundry.......

Originally Posted By: Stewart Fan
Originally Posted By: hattaresguy
she is paying...get this...13.1% on her new Mazda 3. She is the kind of person Dave here needs to help.


That's nothing. I was hanging out with my brother and nephews the other day. One of my nephew's buddies was there also.

My nephew's buddy was bragging up his "new" '09 Honda Civic SI.

I about choked when he told me the interest rate was 30%...yes 30%

The kid is 20 years old,makes $13 an hour and has a car loan with a 30% interest rate.


Wow. Is that even legal.
My loan shark charges 15%. And I thought that was insane.
I bought my charger with 0.9% interest and I put a couple grand down. Basically free money.
Now when you consider the value of my dollar will be less due to inflation the finance company actually looses,not me.
So though I agree with mr Ramsey in principal there are deals out there for those of us who can get them that kybosh his theory.


She was good looking...with and without laundry...

Anyway buy here pay here used car lots finance used cars for insane interest rates.

 

[hattaresguy]

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!


Most people who have substantial net worth lease vehicles, boats, jets, wives... many times they don't even lease stuff, their companies do it for them.

DR is more in line with the Millionaire Next Door, and those guys never have nice cars.

http://www.amazon.com/The-Millionaire-Next-Door-Surprising/dp/1589795474

http://www.amazon.com/The-Millionaire-Mi...Q7PWGS2Y7M74FCP

Here are some good books.

Their is nothing wrong with going bankrupt once or twice in your career, DR did and in his field of RE its not remarkable. Its the bounce back that counts!

 

[andrewg]

Not to go off topic too far....but how did Mr. Ramsey's bankruptcy correlate scripturally with his beliefs? I recall something about giving to Caesar what is Ceasar's. It's ok to just say...sorry...I'm not paying you back?

Just another example of why I don't really follow many folks that try to blend business and religious values. It almost always conflicts...with the money side winning out....and excuses in the form of vague scriptural references that fit the need to justify.

Anyway...sorry. Back on topic.

 

[gfh77665]

Originally Posted By: andrewg


Nothing wrong with being wealthy. But one of my issues with him...and any wealthy Christians...is that they don't model themselves after THE role model that they say they subscribe to. Far too many Christians think being "blessed" means money.


I don't want to be misinterpreted. I have been financially blessed more than I can dream of. But do note I called it STEWARDSHIP, not "ownership".

Its really all His. Allways has been, always will be. Technically, my financial net worth is exactly zero.

 

[jcwit]

Originally Posted By: gfh77665
Originally Posted By: andrewg


Nothing wrong with being wealthy. But one of my issues with him...and any wealthy Christians...is that they don't model themselves after THE role model that they say they subscribe to. Far too many Christians think being "blessed" means money.


I don't want to be misinterpreted. I have been financially blessed more than I can dream of. But do note I called it STEWARDSHIP, not "ownership".

Its really all His. Allways has been, always will be. Technically, my financial net worth is exactly zero.



Right, truly being blessed is being loved and having ones health both physically & mentally. Riches is of little consequence.

 

[CKN]

Originally Posted By: andrewg
Not to go off topic too far....but how did Mr. Ramsey's bankruptcy correlate scripturally with his beliefs? I recall something about giving to Caesar what is Ceasar's. It's ok to just say...sorry...I'm not paying you back?

Just another example of why I don't really follow many folks that try to blend business and religious values. It almost always conflicts...with the money side winning out....and excuses in the form of vague scriptural references that fit the need to justify.

Anyway...sorry. Back on topic.


To be fair...years later Dave Ramsey went back to all the creditors he filed bankruptcy with, and paid them in full. He said it was difficult-trying to give a bank money they wrote off years earlier.

 

[wander2039]

We followed Dave's plan back in 06-08 and paid off over $65k in debt. It was a blessing in disguise as our oldest boy was born at 24 weeks 4 days.. if we would of had all that debt when that happened not sure what we would did. Added alot of medical debt then but finally got the last car paid off in 2010.

Can't say we follow his lead 100%. Typically what we do on big purchases is depending on interest rate just add principle and pay it off in the half of the time or less. That's what we're doing on the RV and half $5-6k equity and only had it a year and half. What others do is their concern but that works for us!