Here is an alternative to Dave Ramsey.

Doug Andrews I hear him on a.m. radio and was really blown away at some of the stuff he has said. He gives great stories too.
https://www.youtube.com/watch?v=xvckL1VMGe8
https://www.youtube.com/watch?v=UgxSVtQnDu0
https://www.youtube.com/watch?v=FT9qUaWI97o

You make the post previous to mine and fail to see how your inaccurate description of 2+2 is not relevant. Typical.

Interesting stuff. Would be more interesting if he described his "conservative side fund" though instead of trying to sell you on paying him for it.

You don't think there's an overlap between aspbergery overly logical types and people who aren't overly motivated by emotional situations over logical ones?

I don't get it.

Made a little calculator based on the Doug Andrews stuff. Adjust the yellow cells to see what happens. A green cell in column M means Side Fund > Remaining Mortgage

https://docs.google.com/spreadsheets...it?usp=sharing

The big realization for me, is that you have to buy a house that you can afford 15 year payments on and then get a 30 year mortgage to correctly apply this plan. That's great advice, but I never heard him specifically mention that fact in the linked videos.

At 28% federal tax rate his math works out down to a 4.5% growth rate (didn't include capital gains taxes anywhere).

That needed growth rate goes up and down as your federal tax rate falls and rises (respectively).

You said DR advice is good for losers and emotionally weak(which I agree with).

You said that audience is not 2+2. Which I strongly disagree with after reading this forum nearly 10 years. It is full of emotionally weak individuals. Just because they are aspergers socially does not mean they make correct decisions all the time. It's like saying most of the people who read 2+2 are lifetime winners at poker. That is most certainly not true either.

Dave Ramsey gives great advice for people who are not good at finances.

I think it's AAA+ even if it doesn't really help me out

Nice looking table. I need to learn how to make those. So your side value fund is $84,500. You can use that side fund to get financing from interactive brokers at 1.58% interest. So you borrow $20,000 for a car, your total payment (interest) is $26.33 a month. You can use interactive brokers as a loan consolidation program. As you gain more experience investing you can now make 10% return. Thus you are now making $8,450 in interest/dividends. Within 3 years the car is paid off. However, keeping the $20,000 margin, you gain another $2,000 in annual income and since you are using margin to pay for everything it is tax free. In fact the 1.58% interest payment is a non itemized tax deduction.

But all this depends on you not over spending and really being able to earn 8-10% on your investments.

I have heard him on the radio before. I never bothered looking into it because I assumed it was him trying to sell life insurance. I just googled Doug Andrews and several of the links on the first page were about how awful his advice is:
http://www.mymoneyblog.com/millionai...o-be-true.html
http://whitecoatinvestor.com/missed-fortune-a-critique/

I haven't read his books. If these reviews are accurate, noone else should either

In the first critique, he list 2 catch #1 and #2 saying returns in the SP500 have been 12.7%, yet according to this forbes article it has been shown individual investors average 1.9% for stocks and 0.7% for bonds over a 30 year period. Doug has stated over a period of 50 years insurance has beaten the sp500 (this is probably due to the hedges being undervalued during stock market bubbles).

http://www.forbes.com/sites/advisor/...urn-is-so-low/

In the 2nd critique, Part 1, Andrews says there is more of a unknown risk of taxes when you retire and they probably will go up. Yes, it is true if you are paying 33% in taxes when you retire you probably can afford it. But the reason to invest in insurance is that you can pull the money out if you need it, tax free. http://www.forbes.com/sites/ashleaeb...h-ira-mistake/

Part 2, financial malpractice where and investor earns 2% now earns 8% (see Forbes article above). Andrews never said Rel Estate goes up, but that when it goes down you can used your cash you pulled or insurance out to pay the mortgage, in fact he has said he cares less if the house goes up or down. Then he tries to say in the end a home is an investment. Your home goes up and down and like gold really has no return.

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What I don't like is the 15% cap on your investment in the insurance. If the United States experiences hyperinflation the insurance will be wiped out but at least Andrews will have his homes.

Virtually all money managers, hedge fund managers, private equity managers, and ceos have made their millions by using cheap federal reserve debt to their advantage. This is Elizabeth Warrens plan of using cheap debt and loan forgiveness to help the poor.

There are different kind of losers in life.

I'd say people who read 2+2 are much more likely winners in poker than those who don't (and play).

He gives bad advice for people who are or aren't good at finances.

Most financial-ignorant people will be better off 90% of the time hiring a totally random* financial professional** vs. listening to Ramsey.

*You can't cheat and hire someone recommended to you.
**This assumes the professional has no insurance or accounting background.

Chill dude - DR advice is tailored to the US market and may not necessarily apply to his situation. I have no idea what country he's in and how things differ. The advice is spot on for US readers. You get rid of federal SLs in America by paying them off or dying. I think I'd prefer to pay them off.

Dude, took you forever to get back into this one. Have you actually read any of his books yet or are you just continuing your past practices of disparaging a concept you've not completely vetted?

He did talk about the loans prior to that though, and had said he was from europe. If you are going to give advice you need to make sure it actually makes sense for the person.

Europe is a pretty big place and I probably gleaned over the fact he was from somewhere in it - my bad. But I'm not giving advice, I'm conveying details of a personal finance plan developed by an American primarily for use in the American market (although there is a large contingency of Canadians on board as well). If someone starts asking for advice in a DR thread, it makes perfect sense to give them DR advice. It's up to them to tailor it to their situation.

I wouldn't waste the time or money on such trash. His recommendations are well known and well published. Do you want to tell me where I actually have any of his recommendations misunderstood or wrong?

Yeah I mean there are obviously two things that are correct about Ramsey (and I was sort of 'forced' to take his class so I'm familiar with everything he says)

1) Most if not all of what he teaches is suboptimal and occasionally even outright bad from a math standpoint. No bones about it. When I took the class I just laughed to myself for pretty much the entire program. It was torturous.
2) It's designed for people who not only don't know what they're doing, but only marginally pay attention to their finances in the first place. If he can get people to at least sort of sit down and realize that financial management is a thing they should attempt to do, then he has probably succeeded to the extent that it's possible to succeed in an 8-hour course with these people.

This is 2p2 which is probably a top-5-percentile gathering of people who know what they're doing in this area; no doubt we're all going to be like 'lol this is absolutely ridiculous' ...But it's pretty easy to forget exactly how dumb the average person is. Hell, I work with some very smart people in genetics, engineering, bioinformatics etc etc and even some of these very smart people are stupidly clueless about money. So again, judge the relatively bad endpoint by the waaaaay worse average Ramsey student's starting point.

If some people use the class as a stepping stone - maybe they all of a sudden decide that they want to pay attention to their finances now and start to do more research and planning and figure out the Ramsey shortcomings - then maybe that is a reasonably good outcome as well.

I don't know man. I bet if we took a random collection of 10k+ post 2p2ers and asked them "How much do you think you spend per month on X, Y, Z categories" the vast majority of them would be WAAAAAAAAY off.

Also, I think we overestimate the ability of humans of any intelligence level to make perfectly rational decisions; especially about a subject that has as many emotional triggers as money.

I'm no Ramsey-zealot, I've never read the books and I don't follow the program, but I've definitely incorporated parts of his advice in to my general financial outlook. I think a great outcome is people using Ramsey stuff to get interested enough in their own finances to find other pieces of advice they like better or are more comfortable implementing.

Hell, I found out about 2p2 by reading Phil Hellmuth's book, that lead to Lee Jones book, that lead to 2p2 via an afterthought note in the appendix. Obv those aren't the best strategy books in the world but if they are way better than nothing and get you on the right path what's the use in ripping them to shreds?

Dave Ramsey gives good advice to his audience which isn't necessarily us. I first read Ramsey right after college because my brother, who works construction, got into it. He is definitely way better with money than most but got into some trouble getting laid off (industry cycles) and I mean it's great advice for middle class people who don't want to get super complicated with their money.

It's the indexing of personal finance, real ABC simple advice. The biggest knock is that it isn't optimal but ffs who cares.

The problem with the argument, that we are starting to see more of ITT, of "okay fine, most of what ramsey says is sub-optimal and & he is pretty much an idiot but its okay because he is pitching to stupid and undisciplined people" is that there are people called financial advisors that could those people even more. Yes, we all know some FAs charge a lot, some are almost as bad as Ramsey, and some are all around bad people that will screw you, but the other 90% of them are way better than ramsey (and this is even true in most cases if they charged you triple what they charge the rest of their clients).

I think what he's really selling is a plan and certainty. Like most of the on-air pastors out there (he sure mentions Jesus a lot - so much so that he could even be an atheist), he's tapping into a need for people to be told what to do and how. To be told as simply as possible and with unwavering principles.

That's not a bad thing to be selling. If you're the type to get into debt, psychology is what matters, and it's what need fixing, not abstract ideas. And it's fixed by having a dad-like figure making it all ok and telling you what to do and how. Most people are terrible at abstract ideas and don't attach the meaning to them that they should - they need to be guided socially through the process, given simple instructions from on high, because that's the only way that things stick in their mind.

So I don't think the derision is deserved. If he net helps people stop being morons with their money, then he's doing more than most geniuses with brilliant investment ideas. That said, there's nothing great about his advice beyond psychology.

I have been listening to Ramsey pods casts for about 2 years and now I pretty much get the understanding of what he teaches. I think his teaching are great for the average person.

My one question he has that hasn't been address on this thread is his "investments"

He advocates investing in mutual funds, average around 10-12 percent a year. For everyone on this thread, do you think he is getting a kick back from these mutual fund companies? He seems to promo a specific company (i dont remember, American funds?)

Just wondering what people thought

Advising people to do things that feel good and are good for them is a gazillion times better than telling them to do things that feel bad and are good for them.

It is bad advice to tell people to do the most effective calorie burning exercises and eat an ideal diet if they ask how to lose weight. Only a moron doesn't take into account that only moronic people do things purely on the basis of it being the most direct path to a goal.

No. He said several times that he does not get any kickbacks - unless you think he's lying, of course.

He stresses to get 4 different types of mutual funds, split investments evenly across those four. And to contact a broker to find one in each category that has a long track record (10+ years) of beating their benchmarks.

Whenever he mentions that one group, it is to support his claim that there are indeed funds out there that do beat the benchmarks for extended periods of time. One of the funds he personally invests in is from American funds and has a track record of something like 70 years.
That is why he sporadically mentions the group. I haven't heard him mentioning the name of the specific fund.