LOL Dave Ramsey
Dave Ramseys tag-line is:
Live like no one else so you can live like no one else!
Live like no one else. He means live on beans and rice and pay off your debts. The truth is half the world lives on barely beans and rice and has nothing but a life of poverty to look forward to.
No, I am just pointing out how everyone on the forum is brilliant, makes all the right life choices, is good looking and has a hot wife/girlfriend.
The problem is... there's no "expiration date" stamped on anyone's foot. Noone knows when they're gonna go.
Live for the moment. Live every day as if it's your last.
I'd rather have my nice car, my nice toys TODAY... than live cheap, save all my money for when i'm 75... and die at 73, never having enjoyed anything.
Psh. Takes a lot for granted. Show me how to get 12% back on my money, that's more what I'm interested in. I paid both my cars off in 2 months after buying them.
ATOT amazes me.
Every time you offer some kind of advice on how to live your life everyone is already following that advice and has been for years.
Amazing how that works.
3 more payments and i am done. will free up 500/mo. oh man, cant wait.
My issue with Ramsey is that he takes financial concepts that have multiple ways of solving them and simplifies them to some formulaic construct instead of teaching people the reality behind the financial concepts. For example, his classic approach to eliminate debt is to focus on human psychology first. Meaning, he suggest to snowball the elimination of debt by paying down the smallest balance, regardless of interest rate. In this way, there is a sense of accomplishment, and motivation to continue. Sort of like when dieting, there are diets that can eliminate a ton of water weight so the person loses 10 lbs in a week or other some such. Both methods are not optimal because real and lasting change takes time and effort. But, kudos to him for getting people started and making it less intimidating.
The problem is that is is not the financially best approach. The financially best approach to debt repayment, for example, is to attempt to settle for pennies on the dollar, followed by reducing carry costs by renegotiating rates, followed by paying down the highest rate first. And this is all assuming that the carry rates cannot be exceeded by a guaranteed return (such as matching 401K).
Put all your gold stuff in a bag and send it to me. In about 6-8 weeks I'll send you what I think it's worth. :whiste:what's interesting is the mentality degree of understanding about money. places without credit system don't understand system of credit. places that rely more on self-living and rely less on currency don't readily currency system. they migrate to currency economies and don't understand concept of spending, balance, investment. same with some people that have lived in those systems their entire lives.
i'm trying to improve my own understanding of money. here's what i think on it so far:
in the ancient past, friendly entities each had something the other wanted, and so they traded; feathers for bones; salt for pepper; ivory for iron; etc
the system of trade evolved into gold and other shiny minerals. banks and bank notes arose to protect trading caravans from raids and other mishaps of long journeys (bank notes replaced physical carrying of golds). this evolved further into currencies backed by minerals. and this then evolved into what we have now, fiat money.
fiat money is agreement money. the government you and i agree we will use this to represent value. basically, the currency as meaning as long as you believe and adhere to that meaning.
u.s. and other countries, money is printed by federal reserve-like institutions, which have governance that also lies outside government's scope.
in the past, all paper currencies have failed. this has sparked conspiracy theorists to buy up gold, etc, and to point to dangers of federal reserve systems.
http://www.usagold.com/federalreserve.html
http://www.publiceye.org/conspire/flaherty/flaherty5.html
one is a site that sells gold, both reach the same conclusion.
the thing about value is that it truly is a real-imaginary arbitrary-yet-substantial entity represented by things. we create value. it can be hard to define and measure value. value seems to be growing all the time. currencies in place try to keep up with this growing value. inflation results because of more currencies in place yet contradiction at the same time we get we are able to get more. look at the increases of frivolous non-essentials like candies, chocolates, vibrators. look at the types of 'individuals' we are able to support. athletes increasingly higher pay. now leaning towards support of videogame stars and virtual markets (ever growing segment, good because it will help alleviate stress on physical environmental stuff, people will consume more virtual vs more physical), and other types of errant 'producers'.
the money system evolves. at the pace we've had, value is an ever-growing and changing entity. the use of new tools, new advances, further evolutions of entities understandings, amplifies the creation of value. one tractor machine can plow and sow hundreds of acres of fields as oppose to one-oxen one acre. etc
with the 11trillion dollar debt, we really need to find a way to generate value that will offset. either collapse or new system or both, or other, something must occur
money represents value, a growing entity in regards to current circumstance, which can be intangible, hard to evalute.
what are you guys thoughts on money? what definitions do you have of it? tell me!!!
Yep, and kudos to him for helping people turn their lives around. It's fantastic that he's keen enough to see that money is about psychology and not about math in the real world. I think in some cases, like this one, it goes a little too far. But maybe again, baby steps. On the other hand, he never goes and makes the connection to explain advanced ideas, like working with a car buyer and buying at Manheim auctions. Maybe because that's too much work or people who would do that no longer need him.Basically, if you had discipline you wouldn't be in a situation where you needed the majority of his advice, and thus his advice is for people who have failed at the math side of money.
Great little presentation about how your car payment is making you poor and how changing the way you buy cars can change your life.
All you have to do is pay off what you are driving now and save your payments for a year and you are off and running.
http://www.daveramsey.com/media/flash/elearning/drive-free/player.html
I haven't had a car or house payment for 5 years and am getting a 404 - 12% not found error on my rate of return since then. I must be doing it wrong. :hmm: :'(
Edit: Oh, wait...should that have been a "-" (negative) 12%? D:
By the way, if nobody ever bought a new car, where would the supply of used cars come from? The supply of used cars dropped so much from 2007-2010 (because EVERYONE was buying used instead of new) that the price of some used cars was higher than the same model (newer year) new car (after incentives).
Regardless, unless you're just lucky in time, there is no 12% returns guaranteed to be found. My 12 years old Roth IRA, still underwater, is a testament to that.
edit:
Oh, and I remember hearing at least once Dave Ramsey saying his whole car payment video thing wasn't really supposed to be taking as a specific plan for your money. Rather it was just a way of showing you how much buying and financing a new car really costs relative to if you invest long term with that same money. So even as crazy as Dave Ramsey is, he's not suggesting that you create an investment fund to purchase cars with.