Smart Conference - Dave Ramsey, etc

[ktgrok]

Anyone been to something like this? Worth going?

https://www.daveramsey.com/events/smart-conference-orlando.html?gclid=Cj0KCQiAsvTxBRDkARIsAH4W_j-BH9Ws4HSreny2EcQRbrWlXIFVcsbjK1qb5w3uaCME0KE-58bfXfEaAvLFEALw_wcB

[Beth S]

If you & dh have a difficult time with finances, it may be helpful for you both to go together to the conference.
If it gets you both "turned around" in your perspective on money, then the cost of the weekend (beyond admission) would be worthwhile.

But there are many free online resources (esp. personal finance bloggers, even DR youtubes) that can help you get started.

My dh dislikes going to ANY conferences, & would prefer a podcast, or book, etc.   😉
YMMV.

[ktgrok]

ok, that's kind of what i'm thinking. That just the books, podcasts, etc are probably just as good, and free. 

[G5052]

FWIW, it might be more motivating to have it all in one day?

I've been following him for years, but am doing Financial Peace through a local church. There are certain things that are making more sense to me now as a whole though. I'm glad that I'm doing it at this point in my life because I have a lot of upcoming decisions with two in college.

[MercyA]

I'm not a fan of Dave Ramsey. Going to paste something my DH wrote here, just FYI:

I have two main complaints with Dave Ramsey.  First, he shills terrible high-load investments through a network of paid advisors that give him kickbacks for referrals.  That’s about as biased as you can get when you are giving financial advice.  Second, he knowingly lies to his audience about the returns they can get on their investments.  When inflation and actual historical data (not his made-up data) are used, a long-term investor can realistically expect to only get about 25% of what he tells them they can expect.

The youtube video linked in the bogleheads post [below] is fascinating.  He admits that he doesn’t use compound returns (what any respectable advisor uses) because he wants to convince people to invest.  He repeatedly insults advisors who criticize him for using bogus math because those advisors are being “downers” and discouraging people from investing.

http://time.com/money/2794698/save-like-dave-ramsey-just-dont-invest-like-him/

http://whitecoatinvestor.com/how-dave-ramsey-may-be-leading-you-astray/

https://webcache.googleusercontent.com/search?q=cache:ka5qx9he3r0J:https://bucks.blogs.nytimes.com/2011/05/13/dave-ramseys-12-solution/+&cd=1&hl=en&ct=clnk&gl=us

https://www.bogleheads.org/forum/viewtopic.php?f=10&t=143975#p2140541

http://www.erictyson.com/articles/20090313#.VyFA6mPw7AM

Edited February 8, 2020 by MercyA

[Miss Tick]

5 minutes ago, MercyA said:

I'm not a fan of Dave Ramsey. Going to paste something my DH wrote here, just FYI:

I have two main complaints with Dave Ramsey.  First, he shills terrible high-load investments through a network of paid advisors that give him kickbacks for referrals.  That’s about as biased as you can get when you are giving financial advice.  Second, he knowingly lies to his audience about the returns they can get on their investments.  When inflation and actual historical data (not his made-up data) are used, a long-term investor can realistically expect to only get about 25% of what he tells them they can expect.

The youtube video linked in the bogleheads post is fascinating.  He admits that he doesn’t use compound returns (what any respectable advisor uses) because he wants to convince people to invest.  He repeatedly insults advisors who criticize him for using bogus math because those advisors are being “downers” and discouraging people from investing.

http://time.com/money/2794698/save-like-dave-ramsey-just-dont-invest-like-him/

http://whitecoatinvestor.com/how-dave-ramsey-may-be-leading-you-astray/

https://webcache.googleusercontent.com/search?q=cache:ka5qx9he3r0J:https://bucks.blogs.nytimes.com/2011/05/13/dave-ramseys-12-solution/+&cd=1&hl=en&ct=clnk&gl=us

https://www.bogleheads.org/forum/viewtopic.php?f=10&t=143975#p2140541

http://www.erictyson.com/articles/20090313#.VyFA6mPw7AM

Thanks @MercyA, that is a perspective I hadn't seen before.

[itsheresomewhere]

MercyA,  

Glad to see someone else sees the same thing with him. 

[hjffkj]

I think Ramsey is good for getting people in the mindset of paying off debt, starting to save, and learning to budget. And all of that can be learned from his book. But after that there are better people to follow.

I can't imagine a conference being overly helpful passed what the books talk about unless you are completely starting from zero knowledge. Then they might be helpful

[Paige]

Dave Ramsey also has such a nasty, rude attitude sometime. I don't know why he's so loved in some circles. 

We did the class in church once and he has some good ideas but nothing you wouldn't find elsewhere and a lot that isn't practical. If we'd followed his advice to not use credit cards, for example, we wouldn't have been able to fly the kids' grandparents to our house many times, wouldn't have been able to go to them, wouldn't have been able to take vacations as nice as we have- so much value for almost free! We pay off the balance every month, but Dave Ramsey acts like even that is dumb. 

 

[Pawz4me]

I'm another one who has never, ever understood the appeal of DR. Granted I'm nowhere near his target audience--I've never had any trouble at all living within my means, and all I've ever done is listen to his radio program. But to me a lot of his advice seems much more likely to keep people in financial distress than to help them out of it.

[Carrie12345]

I’ve never been to something like that, but I have definitely paid good money over the years for various things to motivate me. (In multiple areas.)  I go in knowing that not every tip and trick is going to be right for my situation or in line with my personal goals, but there’s almost always something I can use to stoke my fire, yk?

For me, a day with DR would be a lot too much, lol. 

[J-rap]

I'm sure he has some good advice.  But, the fact that so many churches jumped on the bandwagon to support him caused me to immediately tune him out, so I've never read any of his material. 

Several people I really respect have recommended I Will Teach You To Be Rich by Ramit Sethi.  I do plan to read that one!  It has a 6-week plan.

[mumto2]

I don’t think the one day event is worth it but I do know several people who have done his Financial Peace through a church with success.  I would look for a Financial Peace starting in your area soon if you want more of a community (for lack of a better word).  His basic plan is good and logical.  The book is clear and easy to implement which is a bonus.

[Pen]

1 hour ago, Pawz4me said:

I'm another one who has never, ever understood the appeal of DR. Granted I'm nowhere near his target audience--I've never had any trouble at all living within my means, and all I've ever done is listen to his radio program. But to me a lot of his advice seems much more likely to keep people in financial distress than to help them out of it.

 

Why do you think it would keep people in financial distress? 

[matrips]

Your library may have his program and DVDs to checkout.  It’s an awesome program.  I did the teen one with my kids

[Corraleno]

22 minutes ago, Pen said:

Why do you think it would keep people in financial distress? 

His investment advice is truly terrible. He recommends 100% investment in high-risk growth stock, suggests that people can count on a 12% annual return with 4% inflation, and can therefore comfortably withdraw 8% of their investments each year of retirement. That is an incredibly risky strategy with a very high failure rate. There have been many many very good statistical studies showing an average real rate of return (market increase minus inflation) of around 4%, and many people think that future returns will be lower than that, and only recommend a 4% rate of withdrawal if you also have the means to significantly cut expenses and/or earn additional money in an economic downturn. Imagine having had your entire life savings invested in high-risk stocks when the market tanked in 2008 — if you continued to withdraw the same annual amount as before the crash your life savings would be gone quickly.

He also insists that high-fee brokerage accounts will beat the stock market average, which is almost never true, and it increases risk as well as expenses. It does make a lot of extra money for Dave Ramsey, though. If you want much better investment advice, that will be much safer, have lower expenses, and almost certainly produce better returns in the long run, read Jack Bogle, or read the Bogleheads forum. There are also bloggers like Mr Money Mustache, who has a very large forum that is focused on living frugally as well as investing wisely. Both of them (and many many others) will tell you that you are better off investing in low-cost index funds with asset allocation divided among stocks and bonds depending on age and risk-aversion (e.g. 90/10 stocks/bonds for a healthy 20-yr-old, but more like 20/80 stocks/bonds for a risk-averse, retired 65-yr-old), with withdrawal rates ranging from 3-4% depending on how easily you can cut expenses and/or increase income by other means.

[MercyA]

Yes to Mr. Money Mustache! Also, this is a great, easy-to-understand guide to investing: Investing Made Simple. 

[ktgrok]

1 hour ago, matrips said:

Your library may have his program and DVDs to checkout.  It’s an awesome program.  I did the teen one with my kids

Oh! Great idea! I hadn't thought to check for it at the library!

6 minutes ago, MercyA said:

Yes to Mr. Money Mustache! Also, this is a great, easy-to-understand guide to investing: Investing Made Simple. 

Definitely going to check out Mr. Money Mustache!

[ktgrok]

I should clarify Dave Ramsey and I do NOT see eye to eye on a lot. One, I am fairly positive he is a libertarian and I'm more a socialist, lol. I dislike his insults as well - no need for that. And yeah, his shilling all those advertisers is annoying - I just fast forward while listening to the podcast, lol. 

And I have zero intention of following his investment advice - we have someone from Edward Jones that we trust and has done very well for us - referred to us by DH's family in Ohio who are very money savvy. So that's covered. 

It's more the motivation - so much of society is buy buy buy buy!!!!!! I mean, even on the YNAB budgeting software groups there are people justifying a 40K car loan while living paycheck to paycheck just because they "like the car a lot". Well, yeah, I'd hope so! But if you are stressing out that you can't cover your bills each month maybe 40K in extra debt isn't a smart move! But thats so normal. Add in Starbucks daily habits, etc which I used to be guilty of, and it is hard to keep an eye on the big picture. So I listen more for that reason. 

But I'd love other podcasts/youtube/books/etc to follow!

 

[Ottakee]

I have to agree with the others.  Dave Ramsey ideas worked for me in the early stages but I never had a lot of debt, etc.  What was lacking though was sound investing advice.  I followed one and paid way too much in fees for an investment that wasn't the best.

If you are in debt, struggling to build an emergency fund, etc then his books might be helpful for that stage 

For investing, definitely go with The Bogleheads' Guide to Investing.  Another easy to read book is The Simple Path to Wealth which is very similar.  I really like this book as it is so simple and easy to understand.

Edited February 8, 2020 by Ottakee

[ktgrok]

Where we are at is some credit card debt, some old medical debt, and a TON of student loan debt. DH graduated with about 100K, after what can only be called predatory lenders impersonating financial aid officers convinced him to take out private loans to pay for their private school that has since been shut down. Due to the high interest on the private ones (over 14%) even while making payments he now owes nearly double what he started with. At this rate he will die with a debt level equivalent to a small nation state. The stress of it honestly may kill him. 

I've taken over the finances, and we are paying down the credit card debt, I'm not worried about that. We will have it all paid off in a year I think, if not sooner with bonuses, etc. And I'm looking into how we can refinance at least the private student loans for a lower interest rate. 

But the reality is, even though DH makes what should be a really impressive salary we can't live the lifestyle that goes with that. Which can be a hard pill to swallow, especially for him. He goes to work and sees everyone in their newer model cars, etc and he drives a beat up old truck with no headliner. They have annual passes to the theme park, we don't even go to movies. Etc. etc. Part of that is that we are a one income family and they have two income families, but a lot of it is just they don't have hundreds of thousands of dollars in student loans. 

So yeah, some inspiration to keep us feeling good bout things is what we need I guess. 

[teachermom2834]

Things turned around for us when I got out of the DR mindset and became comfortable with some low interest debt. I think he is wrong about alot of things. 

So that would be a big no to a Dave Ramsey conference. 

[Pawz4me]

1 hour ago, Pen said:

 

Why do you think it would keep people in financial distress? 

Beyond the absolute horribleness of his investing advice that @Corraleno addressed thoroughly above, one very practical thing he always advised people to do that drove me batty was to buy beater cars. He'd have someone call in who'd been unemployed for umpteen months who had just landed a very promising job, but needed a vehicle to get there. And he always told them to get a beater. If I'd been unemployed and desperately needed to make a success of the new job I'd just been hired to do, the last thing I'd want to be relying on is a junker of a car that might not even get me there the first day, let alone reliably for several months while I was building my rep as a stellar employee. A smallish loan in a situation like that to get a reliable car would IMO be a very good investment in my future. That's the kind of practical stuff I see people struggle with IRL. And they're the people who struggle over and over and over because they make very short sighted decisions instead of thinking longer term.

[vmsurbat1]

Since you are looking for investment ideas, another site I like is whitecoatinvestor who was inspired by both the Bogle Forums and MR. Money Mustache but actually continues to work, has a large-ish family, and a very readable blog.

[teachermom2834]

4 minutes ago, Pawz4me said:

Beyond the absolute horribleness of his investing advice that @Corraleno addressed thoroughly above, one very practical thing he always advised people to do that drove me batty was to buy beater cars. He'd have someone call in who'd been unemployed for umpteen months who had just landed a very promising job, but needed a vehicle to get there. And he always told them to get a beater. If I'd been unemployed and desperately needed to make a success of the new job I'd just been hired to do, the last thing I'd want to be relying on is a junker of a car that might not even get me there the first day, let alone reliably for several months while I was building my rep as a stellar employee. A smallish loan in a situation like that to get a reliable car would IMO be a very good investment in my future. That's the kind of practical stuff I see people struggle with IRL. And they're the people who struggle over and over and over because they make very short sighted decisions instead of thinking longer term.

Yep. I was driving an unsafe and unreliable car for years. I was driving to pick my ds up from college in Atlanta and I am sitting in Atlanta traffic worried my car was going to overheat. Everywhere I went it was always in the back of my mind that my car might break down/where would I pull over, etc. I finally cracked and got a newish van with a payment we can afford and a 3% apr. The freedom of driving a reliable car! I didn't realize how much stress it was causing me. Not to mention any day could bring a $2000 repair or a worse and I would be shopping for a car in crisis. But so much hearing people spout DR for so many years I felt guilty and embarrassed about that car. I still start to panic about it and try to figure out how to pay it off early. But honestly there are so many better places for me to spend my money right now rather than paying off my van.

Lots of other examples too. Being on a hamster wheel trying to pay off/avoid any kind of debt is not the holy grail it is made out to be. 

 

[DawnM]

I prefer Crown Financial and many churches offer it as a weekly course, 2 hours per week, for 10 weeks.  You do it together and they usually provide child care.  My husband and I actually taught it for several years.

I have a personal dislike for Dave Ramsey, but it isn't about his program really, just his arrogance.

[Frances]

Here are some inspirational stories about people who paid off large amounts of debt in relatively short time periods. Right now it seems like your first best move would be if at all possible to refinance some of the student loans in order to get significantly lower interest rates so that you can at least keep up with the interest payments, so the loan balances stop growing. Then move on to working on the principal, especially for the highest interest loans. I’m guessing it seems pretty hopeless if the debt just keeps increasing despite putting a significant portion of your income toward payments. I would think that having those payments actually decrease the debt would be very motivating.

https://www.nerdwallet.com/blog/finance/getting-out-of-debt-stories/

[Carol in Cal.]

There either was one recently or one is coming soon in a city about 100 miles from here—cruising range for sure, and I have relatives I could stay with to go.  I think it is overpriced for what it looks like you get.  Plus I happen to live in an area where there are a lot of teaser conferences and presentations that are free or very inexpensive, and I find that if I go to one of those per year that’s plenty.  I don’t want to be always learning and never doing IYKWIM.  So recently I went to a good evening presentation by a speaker for that guy that used to get all those people to walk on fire to demonstrate their mental freedom or whatever, which I guarantee you I will never do, and the presentation was good, it had a little personal planning information that I liked being reminded of, and it was free.  It was hosted by friends of mine who really wanted a good showing, so I did not feel bad about going without planning to sign up for the super good offer on the 4 day class.  

Re. Dave Ramsey, I find him borderline abusive at times, but sometimes people really need that hard dose of REAL, but his advice is mixed in quality, and I like Larry Burkett much better—he said a lot of the same things without being abusive about it, and I prefer people to feel respected.  

If you want to really set your jaw about getting rid of debt, you might consider reading “The Tightwad Gazette” and “Your Money Or Your Life”.  Both were pretty helpful to me, and I would call the second one actually life changing.  Even so, I did not ever do the whole program, but parts of it were very significant for me—particularly the idea of thinking of purchases in terms of how many hours of life effort each one cost, and also of planning them and prioritizing them so that skipping the Starbucks is not deprivation as much as it is redirecting those funds to a goal that is more important to me—I found that extremely empowering.   If your husband is not a reader, you might get the second one as a set of CDs for his commute out of the library.  

Not to try to advise you specifically, but a few years back I got a Slate credit card — it had a deal wherein credit card balance transfers were completely free for the first few months, and there was no interest charged on those or other purchases for 15 months.  Whether there are similar deals available right now I don’t know, but if you’re really on a roll about getting rid of debt, reducing the interest rate to zero and having a deadline to pay it all off might be helpful.  Or not.  It all depends on whether you can control the spending in the meantime.  Also, I wonder whether the student debt could be refinanced?  14% is insane.  Even a personal loan might have a better rate than that.  Again, though, it doesn’t really do any good unless you’re very committed to living within your means going forward, and if your DH is wanting serious lifestyle improvements, that might not be the case.  Dave Ramsey advocates paying all ALL debt, even mortgage, and really going after it for a couple of years, and living well within your means starting now.  If you need a rah rah way to get your husband on board with that, maybe the conference or a Financial Peace class would actually be just the thing.

[Liz CA]

On 2/7/2020 at 8:22 AM, Ktgrok said:

ok, that's kind of what i'm thinking. That just the books, podcasts, etc are probably just as good, and free. 

 

Books/ Podcasts, etc give you the gist of what Ramsey is advising. I agree with a lot of what Carol said. He gets a little excited and even extreme at times. I understand he knows how crushing and detrimental debt can be but as Carol said the late Larry Burkett and Financial Peace principles will likely also get you to reach your financial goals. 

Now, if one of you responds very well to a bit of "ra ra" and a proverbial kick in the rear, then it may be worth it but it always strikes me as funny that these kinds of financial gurus want people to pay mega bucks to attend while they are telling them not to overspend...

[Corraleno]

2 hours ago, Ktgrok said:

But the reality is, even though DH makes what should be a really impressive salary we can't live the lifestyle that goes with that. Which can be a hard pill to swallow, especially for him. He goes to work and sees everyone in their newer model cars, etc and he drives a beat up old truck with no headliner. They have annual passes to the theme park, we don't even go to movies. Etc. etc. Part of that is that we are a one income family and they have two income families, but a lot of it is just they don't have hundreds of thousands of dollars in student loans. 

So yeah, some inspiration to keep us feeling good bout things is what we need I guess. 

There are lots of online blogs and forums that can provide that kind of inspiration and motivation for free. Search for blogs/websites/forums focusing on "FIRE" or "FI" or "financial independence." Even if the "RE" part (retiring early) isn't part of your plans, the steps people take to achieve both FI and RE are basically the same, and those who are aiming for RE are often highly motivated and extra frugal.

One of the reasons I like the Mr Money Mustache forums is that some of those people are so extremely frugal that it makes me feel like my own level of spending is downright luxurious by comparison, even though I would be considered pretty frugal/low expense compared to a lot of neighbors/former coworkers/family members, etc. (paid cash for a dated, fixer-upper house, drove a 14 yr old minivan, never eat out, etc.) At the same time, seeing that someone feeds a family of 5 on $50/wk makes me realize that, even though I would not want to live on his diet (high starch, cheap meat, low fruit & veg), I could definitely cut my own food expenses quite a bit without deprivation. Seeing people who are living on much less than they could afford, by choice not because they have no other option, provides a nice community of peers to counteract all the consumerist insanity I see around me every day. When you see people with $500K investment accounts talking about biking to work or driving 10 yr old hybrids, buying beans & rice in bulk, buying older fixer-upper houses and doing much of the work themselves, etc., it really changes the association you have with those things from "stuff that poor people have to do" to "stuff that smart, successful people who are achieving financial independence want to do." Once you get into that mindset, when you look around at all the people who are up to their eyeballs in debt with big mortgages, car loans, CC debt, expensive vacations, lots of eating out, etc., they seem foolish rather than envy-worthy. It can be especially effective in making you internalize the extent to which all the little $5 & $10 expenses here and there, that are often dismissed as trivial or NBD, really do add up to thousands of dollars in a very short time, plus they create spending habits that tend to continue even when income decreases (like in retirement). OTOH, cutting back as much as possible on expenses, in order to get out of debt as quickly as possible and build a nest egg, tends to create habits that continue even when income goes back up (as it does when you're no longer paying off large debts every month).

[Carol in Cal.]

Something you might try—

 

Add up what you owe as a family, in total.  The whole balance—student loans, credit cards, mortgage, cars, whatever.

Put it on a graph.  Repeat monthly as you pay your bills.  If there is a sudden rise or drop, write in a brief note about why—new car, wash machine broke, bonus applied to loans, etc.  Post this somewhere semi-private but visible—maybe inside your closet door?  Or put it on top of a high dresser in your master bedroom.  You want it visible but not where visitors would see it.

Why is this good?  It shows OVERALL which direction you’re headed.  Sometimes it is hard to perceive progress when you’re overwhelmed, but still, probably every month your mortgage balance is going down a little bit, for instance, and this would make that visible.  Also, if there are things that derail progress every year, that’s good to know.  For instance, if property taxes always pop the balance back up to where it was a year before, that means that all the work to reduce the debt is only getting you holding your own, not actually making progress.  That is fantastic information to have, because it means that either there has to be more saving, or something needs to be sold, or income needs to be increased somehow.  And lastly, if the overall trend is upward, that means that you’re not living within your means at all, and that something BIG has to be done, like giving up a car or adding a parttime job to the family income or downsizing your house.  BUT, maybe you’ll find out that there IS progress to celebrate, and it was just imperceptible for a while.  That would be great to know as well.

[Ottakee]

2 minutes ago, Corraleno said:

When you see people with $500K investment accounts talking about biking to work or driving 10 yr old hybrids, buying beans & rice in bulk, buying older fixer-upper houses and doing much of the work themselves, etc., it really changes the association you have with those things from "stuff that poor people have to do" to "stuff that smart, successful people who are achieving financial independence want to do." Once you get into that mindset, when you look around at all the people who are up to their eyeballs in debt with big mortgages, car loans, CC debt, expensive vacations, lots of eating out, etc., they seem foolish rather than envy-worthy. 

THIS is huge,  OP....those that are living a much higher lifestyle than you and dh might just be far in debt, etc. to maintain that lifestyle.

Mindset is huge.  I am a bit more moderate that some.  I do see the value in buying a newer, reliable vehicle vs the beater,  investing in things that have long lasting value, etc.

It also helps to surround yourself with friends that feel that same way.  One of my good friends is a doctor.  She and her husband do quite well financially but she sees nothing wrong with sending her elementary age son to school in hand me downs/used clothes as that is what his peers in their poorer rural school district wear.  They live a modest lifestyle, rarely go out to eat, etc.  That lifestyles allows them to save and give much as well. 

 It is also nice for me, as even though we are worlds apart in income levels, almost everything we do together is free or very low cost.  We hike, we kayak, we have cross country skied, etc.  I never have to worry about having "enough" money to do things with her or keep up with her clothing wise, etc.  We just go out, have cheap/free fun and head on our way.  That makes our rare meals out (average of less than 1 per year) a nice treat and something we both remember fondly.

[catz]

I do agree this has to at least as much about mind set and lifestyle as is it about making good financial decision.  We are personally living a very simple lifestyle for our income and debt level.  We drive basic cars, we wear basic clothes, we're often a step behind in technology, we haven't had cable going on 16+ years.  My teen loves goodwill.  We splurge on the occasional vacation but pay for it up front.  My spouse bikes for fun, we only buy discount tickets to events for the most part, our outings are modest.  Our mortgage is paid as of this year.  We have zero debt at this point.  We are in a good position moving toward retirement.  But we definitely blend with people making much less who may have much more tenuous financial situations.  When we bought our home, we intentionally bought somewhere we thought there wouldn't be a vibe of competition.  

I do think maybe DR has some good points and helps motivate people to get out of debt.  That said, his investment and long term advice is garbage and I think consulting with someone independently who can really dig into your situation is usually the best once you're in a position to invest.  We just contract a financial adviser periodically.  

I think if you chose and embrace a lifestyle where you really don't care about keeping up with the Jonses and you aren't coveting all the latest and greatest (and I'm not directing that at OP - generally), it becomes just natural.  Buying a 40K vehicle is crazy town to us especially on loan and we pay cash for our vehicles.  That is not a norm to me at all.  We have bought new vehicles, but we drive them for many many years.  Our older one is 9 years old and probably will be around for a number of years yet.  The last 3 vehicles we've purchased new have been end of year close outs.  I don't post this to brag.  We worked hard to get to this point.  I just don't care one iota what someone else is driving or buying and we don't regularly mix with people who focus on this kind of thing.  

One book to check out might be "the Millionaire Next Door".

[Pen]

6 hours ago, Ktgrok said:

Where we are at is some credit card debt, some old medical debt, and a TON of student loan debt. DH graduated with about 100K, after what can only be called predatory lenders impersonating financial aid officers convinced him to take out private loans to pay for their private school that has since been shut down.

 

So he was defrauded? 

Is there any legal recourse?

this almost seems like a great call in to Ramsey’s show scenario

and also to your state attorney general office etc

 

[ktgrok]

33 minutes ago, Pen said:

 

So he was defrauded? 

Is there any legal recourse?

this almost seems like a great call in to Ramsey’s show scenario

and also to your state attorney general office etc

 

The school has since been closed. Those who were not finished with their degrees when it closed are eligible for forgiveness of their loans, but because he did get his degree he is not. The states attorney and national ones are aware of the situation - my husband was one of the lucky ones in that he did graduate and get a good job, at least. 

As for fraud...he was very poorly advised, with the phrasing I'd use. The for profit school was perfectly happy to steer him into predatory loans in order to keep money coming in. 

[Familia]

Goodness, when I tell people that I am a Dave Ramsey fan, I didn't realize what I was saying.

We watched his high school personal finance program as a family when they were all teens.  They did the workbook, and I gave them a semester credit in a personal finance elective.  It taught them to determine their simple financial needs, pay first for those budgeted items when getting paid, and save for big expenses.  Even I got a lot out of that.  Although we have, when we were first married, been stretched beyond our means at times, our way of dealing with that was simply to spend as little as possible and hope for the best.  I had never really set up a budget.  Setting up a simple budget for our more complicated lifestyle (and blessed situation) helped us send our first to college with relative ease and less pain.  Now, following a budget,  seems to make money come out of the woodwork.

Now I read what many of you (who are more informed about DR's teachings) say about his long term advice on investing.  Yikes - I wish I hadn't told so many how much we loved him.

[Pen]

12 minutes ago, Ktgrok said:

The school has since been closed. Those who were not finished with their degrees when it closed are eligible for forgiveness of their loans, but because he did get his degree he is not. The states attorney and national ones are aware of the situation - my husband was one of the lucky ones in that he did graduate and get a good job, at least. 

As for fraud...he was very poorly advised, with the phrasing I'd use. The for profit school was perfectly happy to steer him into predatory loans in order to keep money coming in. 

 

Ugh. 

 

Sounds a bit like Grisham’s Rooster Bar (iirc title) book with shady for profit law school.  

 

Are you managing to get it to shrink bit by bit even if slowly or just treading water on it? Or slowly sinking? 

 

[Pen]

I would not go to conference in your situation as I understand it.  Borrow materials from library, listen to free podcast is more doing the DR thing anyway, IMO.  

This sounds like a past error in getting sucked in to bad situation.  It doesn’t sound like a generally spendthrift living situation.  

 

[Corraleno]

To get an idea of how bad DR's investment advice is, you can plug his numbers into FIREcalc, which draws on more than 100 years of market data to show all the possible outcomes for a given period of time. IOW, if you run the simulation based on making withdrawals over a period of 30 years (e.g. ages 65-95), FIREcalc will show how your investments would have performed during every possible 30-yr period in history, based on your starting portfolio and annual withdrawal amount.  Ramsey insists that people can count on a 12% rate of return, with an 8% safe withdrawal rate, but if you run the numbers through FIREcalc, you find that scenario would have failed nearly 80% of the time. In other words, the investor would have run out of money, and the earliest failures in the simulations occur in less than 10 years. Even a 4% withdrawal rate has a 5% risk of failure within 30 years, but at least at that level, you can probably adjust spending or bring in a little extra money on the side to get through a downturn. 

I think one of the reasons Ramsey insists you can count on such high return/withdrawal rates is he thinks it will make people more likely to use his recommended advisors, from whom he gets a percentage, by implying that "his people" know the secrets to get you higher returns compared to those other advisors who might suggest using lower return/withdrawal rates. Of course "his people" get their commissions and management fees, and Dave gets his kickbacks, regardless of whether Joe Blow makes a ton of money or loses his shirt, so he doesn't need to be right (or truthful) to profit from the advice he gives.

[Mbelle]

I'm pretty positive DR and I don't agree on politics and I do agree he says some crazy stuff.   However,  Financial Peace is a good program and his advice is solid.  As mentioned by previous poster Crown is a very similar program.  We have been living very close to the Financial Peace prinicipals for 10 years.   It is working for our family.  We both were raised in very different families in terms of money management and needed to get on the same page.  DR program did that for us  He gives a nuts and bolts plan for moving forward with success in family financial success.  I would say that DR does not say drive a beater car, he says pay cash for your vehicles.  That is what we do and we do not drive beater cars, but often they are 7 years old or so when we buy them.  We bought a truck from a church that used it for Habitat for Humanity and drove it for 10 years with no problems until the A/C quit working.  We sold it for only a few thousand less than we paid for it.  It was a Dodge Dakota.  I would say go to the convention or take FP classes and have some serious conversations about how to move forward.  It took us a few months to really get in ironed out.  Sometimes we have a sort of off plan month but we get right back into it.  Just like eating healthy.  Maybe just go through the steps until you reach investment and use other advice for that.  FP has been such a blessing for us.

Edited February 9, 2020 by Mbelle

[plansrme]

FP is a good program, and it has nothing to do with any post-FP investment advice DR may give.  If going to the program is an incentive to get on board with his mindset, then go for it.  DR used to be on the radio here during my drive time, and his callers' stories of getting out of debt were inspiring.  And if nothing else, his pointing out to some callers that they have an income problem, not a debt problem, is something that needs to be said more often.  Families in debt frequently focus only on the size of the hole and ignore the size of the shovel.  His oft-repeated advice to get a weekend job delivering pizzas or pick up a couple of shifts waiting tables is something I don't hear very often from others in his field, but he features story after story from families who paid off enormous debt with income from their side gigs.  All that to say that there may well be issues with his post-FP advice, but I can't imagine how you could really go wrong with the FP principles.

1 hour ago, Mbelle said:

I'm pretty positive DR and I don't agree on politics and I do agree he says some crazy stuff.   However,  Financial Peace is a good program and his advice is solid.  As mentioned by previous poster Crown is a very similar program.  We have been living very close to the Financial Peace prinicipals for 10 years.   It is working for our family.  We both were raised in very different families in terms of money management and needed to get on the same page.  DR program did that for us  He gives a nuts and bolts plan for moving forward with success in family financial success.  I would say that DR does not say drive a beater car, he says pay cash for your vehicles.  That is what we do and we do not drive beater cars, but often they are 7 years old or so when we buy them.  We bought a truck from a church that used it for Habitat for Humanity and drove it for 10 years with no problems until the A/C quit working.  We sold it for only a few thousand less than we paid for it.  It was a Dodge Dakota.  I would say go to the convention or take FP classes and have some serious conversations about how to move forward.  It took us a few months to really get in ironed out.  Sometimes we have a sort of off plan month but we get right back into it.  Just like eating healthy.  Maybe just go through the steps until you reach investment and use other advice for that.  FP has been such a blessing for us.

This would be my opinion as well.  I don’t love Dave Ramsey, but I think he has good advice on general attitudes toward money management.  I don’t believe that you have to agree with his (or anyone’s) politics to listen and learn.  He never struck me as someone qualified to give investment recommendations so I disregarded that bit.  I am not an all-in kind of person in most areas.  I attended Financial Peace at our parish about 10 years ago.  We weren’t in debt and already owned our home, but I still learned some things.  I also enjoyed connecting with some new people that I wouldn’t have met otherwise.  We use cash for a few categories to keep ourselves honest and it has opened up budgeting discussions that we didn’t have before.  We do still use credit cards where it makes sense and still pay them off every month.

[hjffkj]

Many online blogging personal finance people highly recommend side hustles or part-time work over your full-time income. And that is incredibly sound advice if one is struggling with the amount they bring in with their normal jobs or want to save more or pay down debt faster. DR is not unique in this type of advice. 

I have supplemented our family's income with pet sitting our entire marriage. And now that dh has changed careers he still teaches kung-fu 4 hours a week mostly because he loves it but also to bring in a bit more money since he took a slight pay cut when switching careers.

[ktgrok]

I also appreciate that he seems to get the value of a stay at home mom. Unlike many in our society his default is not to have mom work full time. I do need to work on my side hustles - I'm behind in my writing and my dog training business did nothing last year. I need to reconfigure some things to get those doing something. I'm actually looking at doing some online dog training advice via email/message and figuring out how to make that work since I could do that easily and something is better than nothing. 

Writing...argh. So not motivated. And not making time for it a priority. I'm actually considering trying this week to write in the morning, and start school later with the kids. let them play outside or whatever and then do school after I get some writing in. When I try to do it at night I'm just too tired and non creative. 

[Pen]

3 hours ago, Ktgrok said:

I also appreciate that he seems to get the value of a stay at home mom. Unlike many in our society his default is not to have mom work full time. I do need to work on my side hustles - I'm behind in my writing and my dog training business did nothing last year. I need to reconfigure some things to get those doing something. I'm actually looking at doing some online dog training advice via email/message and figuring out how to make that work since I could do that easily and something is better than nothing. 

Writing...argh. So not motivated. And not making time for it a priority. I'm actually considering trying this week to write in the morning, and start school later with the kids. let them play outside or whatever and then do school after I get some writing in. When I try to do it at night I'm just too tired and non creative. 

 

Any side hustle the kids could do too?  Dog sitting or walking?

[FriedClams]

I did it online. I think it was very motivating. I don't believe Dave is in it to make money, but honestly really wants to help people get financially free. Yes, he's very very wealthy, but his advice is ages old and he's not shy is saying so. And, I the it helps for everyone involved in the budget to be on the same page.

[Carol in Cal.]

At one point my SAH BIL got a paper route.  Their small town paper only published three or four days per week, and delivery was early to mid morning, not while it was still dark at night.  He would load up the papers and the youngest kid into a red wagon and walk around with the other kids in tow.  They mostly called it PE.  It was a family outing and got everyone some fresh air, sunshine, and a little exercise.

[Scarlett]

19 hours ago, plansrme said:

FP is a good program, and it has nothing to do with any post-FP investment advice DR may give.  If going to the program is an incentive to get on board with his mindset, then go for it.  DR used to be on the radio here during my drive time, and his callers' stories of getting out of debt were inspiring.  And if nothing else, his pointing out to some callers that they have an income problem, not a debt problem, is something that needs to be said more often.  Families in debt frequently focus only on the size of the hole and ignore the size of the shovel.  His oft-repeated advice to get a weekend job delivering pizzas or pick up a couple of shifts waiting tables is something I don't hear very often from others in his field, but he features story after story from families who paid off enormous debt with income from their side gigs.  All that to say that there may well be issues with his post-FP advice, but I can't imagine how you could really go wrong with the FP principles.

Yes this.most of his advice about getting out of debt is solid. As well as what you said about sometimes it is an income problem.  I am not  a fan of the wealth building part of it....just rubs me the wrong way for some reason,,,,but the get out of debt part is good imo.  

Edited February 10, 2020 by Scarlett

[ktgrok]

I should clarify that my husband is better at managing finances in general. He is just the one dealing with the peer pressure, for lack of a better word. I hang out with other single income moms, you know? Different worlds. 

And, in full shameful disclosure, I splurged yesterday. Some of you know that last year I discovered lawn work - it is my new passion. It makes me SO happy and my husband jokes that I love the lawn more than him. Anyway, I spent all last year mowing with either a manual reel mower (the old fashioned no motor kind) that I like the cut of but it's very narrow so takes a long time AND is constantly getting out of whack so I am always adjusting it or having to mow twice to get it cut right, or an old beat up gas push mower that isn't self propelled and cuts badly. Ideally I'd get a gas reel mower but those are $$$$ and probably not worth it for my quality and size of yard. So I've been looking at upgrading to a self propelled toro, with rear wheel drive. New they are $400-$450, so I've been watching used ads. Yesterday I found one in great condition for $175 30 minutes away and I got it. 

That's money I could have put to credit cards. But I will use this weekly and then in the summer twice a week, for years. And will sell the old one for about $50. And the neighbor had a heart attack a while ago so I try to mow his when I can, and this will make that a lot more likely as it will be faster to get mine done so I have time for his. 

Thats how I'm justifying it, anyway, lol. 

[Scarlett]

17 minutes ago, Ktgrok said:

I should clarify that my husband is better at managing finances in general. He is just the one dealing with the peer pressure, for lack of a better word. I hang out with other single income moms, you know? Different worlds. 

And, in full shameful disclosure, I splurged yesterday. Some of you know that last year I discovered lawn work - it is my new passion. It makes me SO happy and my husband jokes that I love the lawn more than him. Anyway, I spent all last year mowing with either a manual reel mower (the old fashioned no motor kind) that I like the cut of but it's very narrow so takes a long time AND is constantly getting out of whack so I am always adjusting it or having to mow twice to get it cut right, or an old beat up gas push mower that isn't self propelled and cuts badly. Ideally I'd get a gas reel mower but those are $$$$ and probably not worth it for my quality and size of yard. So I've been looking at upgrading to a self propelled toro, with rear wheel drive. New they are $400-$450, so I've been watching used ads. Yesterday I found one in great condition for $175 30 minutes away and I got it. 

That's money I could have put to credit cards. But I will use this weekly and then in the summer twice a week, for years. And will sell the old one for about $50. And the neighbor had a heart attack a while ago so I try to mow his when I can, and this will make that a lot more likely as it will be faster to get mine done so I have time for his. 

Thats how I'm justifying it, anyway, lol. 

I wouldn’t even call that a splurge.  It is just a necessity if you have a yard.  And you got a great deal too!