{ "media_type": "text", "post_content": "Does anyone know anything about Dave Ramsey? It feels like a cult. My friends swear by him but I can’t figure out his logic. Like people that follow him insist you pay off a car loan at 1% interest before you invest anything.. or are completely anti credit card even if you use it for the points… what am I missing? It feels like the plan may be for lower income people who don’t manage money well but that may be completely ignorant of me?", "post_id": "61ee865b3c6930002a063808", "reply_count": 19, "vote_count": 5, "bowl_id": "59064a3cb12379001006592c", "bowl_name": "Personal Investment Chatter", "feed_type": "bowl" }

Does anyone know anything about Dave Ramsey? It feels like a cult. My friends swear by him but I can’t figure out his logic. Like people that follow him insist you pay off a car loan at 1% interest before you invest anything.. or are completely anti credit card even if you use it for the points… what am I missing? It feels like the plan may be for lower income people who don’t manage money well but that may be completely ignorant of me?

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Yeah gives an all or nothing advice for people which is pretty risky. He also publicly shames people with debt even if its low interest telling them how stupid they are. As far as the cult he makes his employees follow his view of Christianity and overpasses personal boundaries. One employee sued him because she got fired for being pregnant and not married.

likefunny

I feel like he's meant for the people with debt up to their eyeballs. He helped my parents pay off maxxed out credit cards with high interest. His methods can keep a lot of people out of financial distress. But for financially savvy individuals who have discipline with money, not the most ideal methods. We understand that paying a low interest loan may be less ideal than using that money towards investing with consistently higher returns. We'll also likely not be in a position in the future where we can't afford to pay our loans.

likesmart

I honestly believe most people who have their finances together like the feeling of superiority it gives them over those who don't. People are not purely logical creatures, i think Dave is full of less than perfect advice but he uses various little psychological tricks to get people who otherwise may not save or pay off debt to achieve those goals (such as the debt snowball). It's great for all of us that we can pay off cards every month in full and use points, some people literally don't have the self control to spend within their means for whatever reason. They see the credit limit as the money they have in the bank. It's easy for me to say "oh just develop the self control!" But saying that isn't actually helpful for them, so if his stupid all cash envelope system is the only way they can prevent overspending maybe it isn't stupid for them. Will i use it? No. The only cash i have is from Christmas and birthdays lol. But if it keeps them from having a ton of cc debt why are we hating on them for using what works? Those of us who have self control when eating can also look at binge eaters or people who overeat in general and say "just stop when you're full!!! It isn't that hard!" But for whatever reason for them it is! If getting a smaller plate tricks them into feeling fuller who cares. I swear i see an anti Dave post every other week here, i guarantee 95% of this bowl is not following all his advice, at this point it's just an excuse for people to go "Dave Ramsey bad! I'm so smart!"

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His methods are not for people who understand budgeting and financial responsibility. There are a lot of people out there with serious spending habit issues, piles of debt they can’t unburden. He teaches behavior change, not financial wellness.

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Essentially he teaches getting out of debt as quickly as possibly (including low interest loans) and having zero debt (and never borrowing again except for a mortgage) before moving on to saving for retirement, college, rental properties, investing, etc. There’s nothing wrong with his plan and it works for the masses, but may not be the optimal (or mathematically optimal) plan for everyone, particularly more financially knowledgeable and disciplined people (but this probably a small portion of the population).

likesmart

It’s cultish. He offers some good advice. Definitely not for everyone. If you are bad with money or just getting started investing may be a good place to start. He’s not the worst person you can listen to

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I’ve been debt free for years but still listen to Dave’s podcast regularly just because he creates so much content (several episodes per day vs one per week for other FIRE bloggers). His style is bombastic and overly simply but I do appreciate that he is consistent and that his methods are approachable for those who have struggled with money management at any income level. Like many have said above his approach is not really about math, it’s about psychology. His entire brand is about low-risk financial management.In surveys the vast majority of Americans can’t cover an emergency expense of even $400. Most people think if they can afford the monthly payment for something they can afford it, without realizing that needing to finance a couch for 6 years with a loan from Ashley home store is NOT good financial management. Those people are his target audience. There are other competing brands that encourage leverage (Ramit Sethi, Robert kiyosaki) that’s just not Dave’s model.

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My guilty pleasure is listening to Dave yell at people while I do chores

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I guess its good for people that feel overwhelmed by debt

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Dave Ramsey's advice won't make you rich, but will keep you from being poor

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I read his book. A lot of it seemed geared towards people with impulse control problems and gave them tools to help. Cutting up credit cards in this day and age seems kind of crazy to me, for example. But I know someone who swears by the envelope system Dave preaches. Helped her pay off her $50k student loan debt. Granted, she was able to live rent free with family, which probably helped a ton. I've got another friend trying to follow Dave's method after buying a used car at 18% interest with the hope to pay it off early. Both came from poorer families who didn't teach them financial responsibility. So, Dave is a substitute parent for them in that regard.

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I can’t stand his voice for more than 10 minutes 😂 There are high earners who don’t manage money well either. The amount of income has nothing todo with money management. Just take out the good parts and scrap the rest. The credit card thing I think is more for folks who aren’t good at managing altogether. Some people take it to the extreme of eating rice and beans until stuff is paid off. In the end, it all comes down to how determined you are to retire and what comforts can you do without.

People have strong reactions. Maybe he’s a a good wake up call for those struggling to get out of debt, but if you have control over your finances, ignore. Not all debt is bad.

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