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Hello, goons! I am AsInHowe, and you may know me from SAS, TFF, and D&D. I'm a certified financial professional, handling things from insurance protection and investment, to retirement and business planning. I guess what I'm trying to say is...stuff like Dave Ramsey infuriates me, as someone who knows better. So that's what this thread is here for, to help you know better, and hopefully help you learn enough to explain it to your loved ones and friends who are caught up in this kind of thing. Dave Ramsey is creating a generation or two of people with bad financial mindsets, so when they do go to retire, there won't be money there. Or if there is money, it will all go away soon. And that's by design. On the other hand, I'm coming from a Fortune 100 company, with advice designed to do the following: protect you/your family in case something happens, plan and invest for your big future expenses and retirement, and create a financial plan around what you're passionate about in life. Essentially, the opposite of Ramsey, and yet the actual financial freedom that he professes to give. (If you do have any personal questions or anything like that, private messages are open. I'm available to speak with, and hopefully help some people, whether it's themselves or others. Just saying.) Dave Ramsey is hugely popular within the Christian media industry, and talk radio, for those that don't or barely know. He's essentially become the go-to financial guy for the conservative suburbia and heartland of America, with all that entails. Here, watch this basic video from CNN. https://www.youtube.com/watch?v=Ng2f_ZlZjdQ The big takeaways are this: - Dave Ramsey is a gun owner, like you, his ideal client and cultural peer. - You should not spend any money on virtually anything pleasurable now, so you can presumably have more money later. Live like you're broke, all the time and forever. - That money you have later should be given away, ideally. - Dave is very Christian/"common sense", which gets him in the door, but "common sense" can also be looked at as stupidly basic. - All luxuries, whatever they are, are sinful and bad. - Therefore, if someone has something nice, they are sinful and bad. If someone doesn't have money, they are sinful and bad. Essentially, you should be spending next to nothing, living like a poor person, and then when you do have money, don't be greedy - give it away, to your church preferably. This thread is for general financial discussion, especially in regards to bad popular advice, bad ideas, and generally pervasive ideas that are doing harm (or doing help). I will be posting some more things below, including a takedown of Dave Ramsey's basic curriculum, and go from there. Ask away, and hopefully everyone learns something.
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Jul 21, 2017 00:46
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| # ? Apr 24, 2024 06:53 |
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Full communism now
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Jul 21, 2017 00:49
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Pollyanna posted:Full communism now We will get around to this, actually. There will be some socialism chat.
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Jul 21, 2017 00:49
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Here's my favorite thing that makes me Angry About Dave Ramsey: He encourages all his listeners to tithe 10% of their money to their church, no matter how dire their financial situation. gently caress Dave Ramsey.
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Jul 21, 2017 00:53
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AsInHowe posted:Dave Ramsey is creating a generation or two of people with bad financial mindsets, so when they do go to retire, there won't be money there. Or if there is money, it will all go away soon. And that's by design. I'm curious, what's so bad about his practices for his practitioners? I don't know a whole lot about him, but I suppose that his "debt snowball" approach is not always optimal since your smallest balance may not be your most expensive balance. Is it the 10% tithing thing that's ruinous? Or is there something else going on here?
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Jul 21, 2017 00:55
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OP can you show me on this doll where Dave Ramsey touched you? I mean yeesh, sure I don't agree with every last tenant of Dave's financial peace mindset, but it has helped way more people then you ever will get control of their finances, and even get rich and buy fun luxuries that he doesn't have any problem with at all. Your dumb as poo poo.
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Jul 21, 2017 01:05
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you're*
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Jul 21, 2017 01:09
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You actually going to tell me what specific bad advice Dave gives or just be a dumb as poo poo grammEr nazi.
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Jul 21, 2017 01:11
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Help I make money whenever I can get a gig or a guitar student, how can I leverage my sociology and journalism degrees into money?
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Jul 21, 2017 01:12
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Joe-Bob posted:I'm curious, what's so bad about his practices for his practitioners? I don't know a whole lot about him, but I suppose that his "debt snowball" approach is not always optimal since your smallest balance may not be your most expensive balance. Is it the 10% tithing thing that's ruinous? Or is there something else going on here? His advice is kind of harmless if you already have money and you literally just need somebody to tell you, "hey pay off your CC instead of buying that new jet ski." If you're someone who's not making a living wage(a lot of people) or are like one health crisis away from bankruptcy(probably most of the US) then it's harmful because it starts from the false premise that you actually have control over your financial life. Most people in the US are not actually in any position to control their financial future due to factors outside their control(falling wages for decades, no universal healthcare system, healthcare costs through the roof). So he's just convincing a bunch of people who just literally don't have enough money to cut any "luxury," and then also reduce their income by 10% by giving it away to religious institutions. Neither of these things are going to prevent any kind of bankruptcy or actually lead to savings leading to wealth. It's just-world stoic-poor personal-austerity-plan bootstrap bullshit. ErIog fucked around with this message at 01:16 on Jul 21, 2017 |
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Jul 21, 2017 01:14
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First off, let's discuss some basic demographics. Dave Ramsey's core demographic is as follows: Married couples in their 30's and 40's. The husband has a blue/white collar full-time job, and the wife is either a stay-at-home mom or is making extra income that is purely extra (for what it's worth.) They have a house, multiple kids (probably 3-4), and lots of credit card debt, because they don't know how money works. Daily expenses are off the chart, because they don't know how money works. Presumably, those large credit card bills came from Mom, but we want to guilt Dad about it, because life is exactly like a tacky family sitcom. Both parents graduated from college before 2007, and immediately got a well-placed job in their field. They are planning on having their kids do the same thing, because that's how college works - you go, you get a degree, and you immediately get a high-paying job, and anyone who says otherwise just isn't working hard enough at looking for a job (or they went to an unproductive liberal college). The stock market will always go up, home prices are always rising, and everyone's taxes are way too high, which is all common sense that everyone knows and shouldn't be questioned. This hypothetical couple just needs to be more disciplined, and their real financial problem is just lack of discipline. Therefore, if anyone has financial problems? It's just a lack of discipline. Can't afford jacked-up health insurance rates? Lack of discipline. Being run into bankruptcy by something predatory? You're not working hard enough. Anything bad happened to someone, and they need your help? It's their fault, they deserve what happened to them. It's essentially a bad and stupid reading of the story of Job, bringing things back to the Christian base. And this is where things like the punitive Trump health care bill come from, as part of the generally meanspiritedness seen throughout some parts of the country. If you're not the couple above culturally, or you're dealing with something bad that happened...it's your fault, for not being disciplined enough.
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Jul 21, 2017 01:16
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I haven't heard a lot of Dave Ramsey, but from the five-minute chunks I've caught on my car radio every six months or so, I take away this: (1) yes, the Christian thing, which I do find a bit off putting just because of how loving hard he hits it, almost to the extent that you'd think he's telling you you can't possibly be financially successful unless you go to an authorized Christian church each and every week and tithe (and maybe that's exactly what he means), and (2) get debt free. Can you comment on point 2? It seems like a worthy enough goal to me, but I know I haven't heard/read enough of him to catch everything Ramsey would want to tell me about it if I gave him the time.
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Jul 21, 2017 01:31
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AsInHowe posted:It's essentially a bad and stupid reading of the story of Job, bringing things back to the Christian base. By "bad and stupid," you mean completely backwards, correct? The whole point of Job (which most people forget/never knew) is that it's wrong to claim suffering people deserve what happened to them.
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Jul 21, 2017 01:38
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None of Dave Ramsay's listeners actually follow his financial advice and he knows it. Financial advice isn't the point at all. The point is to make it okay to hate poor people and never ever vote for any progressive legislation because society doesn't deserve to improve because society wasted it's money on (hiss) frivolous sinful luxuries. reignonyourparade posted:My mom is real big on Ramsey and based on that I gotta say if the "live like you're poor, no luxuries ever" really is part of what he's teaching he's doing a really bad job of teaching it. Exactly: that isn't what he's teaching. His advice is impossible for anyone to follow, especially for Americans, where the entire culture is based around consumption of one stripe or another. He's teaching that it's okay to dismiss the poor and sick because they didn't get debt free. the black husserl fucked around with this message at 01:51 on Jul 21, 2017 |
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Jul 21, 2017 01:46
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Jurgan posted:By "bad and stupid," you mean completely backwards, correct? The whole point of Job (which most people forget/never knew) is that it's wrong to claim suffering people deserve what happened to them. Yes. Completely backwards. However, the people listening aren't really too deep in the Bible, and only know the superficial level. (If this is something anyone is running into, I've got some messages that fully explain the correct point of Job.) ---- Dave Ramsey's greatest hits come via his Financial Peace University, a small-group Bible study regularly taught at churches. It's a 7-step program, which I will explain and deconstruct below in the posts to come. Each of the quoted portions are what Ramsey has on his website to describe each step. Starting with... Step 1 – $1,000 to start an emergency fund quote:"An emergency fund is for those unexpected events in life you can't plan for. Whether there's a plumbing issue and everything but the kitchen sink is draining, or your brakes are squealing at every stop sign, you can be ready! Okay, this seems vaguely obvious, and if you can't do this normally, that's a larger issue. This is where the whole living wage argument begins. If you're not making good money, enough to be wasting money, everything falls apart from here. No one should be living beyond their means in general, and looking at things at a simple level, this all makes sense to begin with. You should have an emergency fund if you can. If you're making good money, you probably already do have some sort of savings account, because that's super basic. However, I see two major points of concern here, coming from the second paragraph. First off, you should be able to save $1000 in a very basic way. Review what you're actually spending money on, and see what can be done to minimize it. (Like, if you buy drinks at a convenience store, you could save some money by buying them at the grocery store and just taking them from home each day.) Saving $1000 is a relatively small amount for the desired demographic, and if you aren't making enough money to waste...saving $1000 is harder than people think, and if you aren't making that much money, it goes back to the lack of discipline. That's why Dave is throwing out casual suggestions like "Work an extra job.", like everyone just casually has time to do that. If you have a family with kids, it's not like you have lots of extra time to just GO PICK UP A SECOND JOB. If you're already barely making enough to live on, for whatever reason, it's not like you have a bunch of stuff in a storage unit to go sell. This is "common sense" advice that simply doesn't apply to people, but it's presented in a way that makes the listener assume that everyone's just in that situation. Second, you need to save money, but don't destroy your life to do so. Liquidation is important in terms of timing, and doing it as fast as you can isn't necessarily the best thing to do. You should have extra money for problems in general, but that can be done with the basic reorganization that I mentioned earlier. And besides, most people are saving money in places as it is, just not in a liquid way. (If you are going to liquidate things, do it in a responsible way. Figure out how much things are worth, figure out what your minimum return is, and wait/look for the right buyer.) What this attitude does is create desperation and money hoarding, which isn't good for the long term. Desperation and responsibility don't go well together, because you're only focused on an arbitrary short-term goal instead of your actual responsibilities in life.
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Jul 21, 2017 01:46
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My mom is real big on Ramsey and based on that I gotta say if the "live like you're poor, no luxuries ever" really is part of what he's teaching he's doing a really bad job of teaching it.
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Jul 21, 2017 01:47
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What's your take on pensions?
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Jul 21, 2017 02:10
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SpaceCadetBob posted:Your dumb as poo poo.
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Jul 21, 2017 02:12
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the black husserl posted:Exactly: that isn't what he's teaching. His advice is impossible for anyone to follow, especially for Americans, where the entire culture is based around consumption of one stripe or another. He's teaching that it's okay to dismiss the poor and sick because they didn't get debt free. Well again based of my mom I gotta say he doesn't seem to be doing a good job of teaching that either.
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Jul 21, 2017 02:15
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Dreylad posted:What's your take on pensions? Pensions are a wonderful thing, and should be used a lot more widely than they are now. 401ks have replaced pensions, and that has ultimately been for the benefit of the company and not the employee. People are essentially having to work longer to achieve the same lifestyle in retirement. They get sold onto large returns that don't happen, and end up with the consequences. Below are some articles that explain that, and why. https://www.forbes.com/sites/mitchelltuchman/2013/06/04/pension-plans-beat-401k-savers-silly-heres-why/#24775c5fa7b6 https://protectpensions.org/2017/01/04/401k-failed-replacement-pensions/ http://neatoday.org/2012/03/23/why-a-401k-is-no-replacement-for-a-pension/ https://www.newyorklife.com/articles/401k-vs-pension/
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Jul 21, 2017 02:19
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Step 2 – Pay off all debt (but your house) using the Debt Snowballquote:"List all debts but the house in order. The smallest balance should be your number one priority. Don't worry about interest rates unless two debts have similar payoffs. If that's the case, then list the higher interest rate debt first. Don't do this. This is a bad idea in the short-term, and the long-term. Unless you're in deep, deep financial trouble, the amount of debt that you are in doesn't have an effect on your daily life. It's a number for past events that should be responsibly reduced in the long-term, and not excessively grown. Debt should be paid off in two ways: - Small accounts (things that can be paid in one payment) should be paid off, settled, and taken off your credit report. These tend to be residual fees from old utilities, one-off medical expenses, things like that. Check your credit report, a surprisingly large amount of these can be dragging your score down. Find them out, get them cleared off, and then get a letter from that company saying that the account is closed, and report it to the credit report companies. - Large accounts (things that will be paid off over months and years) should start getting monthly payments, and should have any potential settlement offers noted. Monthly payments are important to keep accounts open and active, and that helps on your credit report and score. Again, the very first part (and only that) is a good idea. You should have a list of what you owe, to where, and at what interest rate. Add that in with a copy of your credit report as that shows your payment history, and any settlement offers for those particularly large accounts. You should try to pay the small ones off, and start making payments Everything else, holy crap, that's not a mature way to do things. First, you should absolutely start paying down and settling things with high interest rates first. That will save you a lot of money, and is legitimate common sense. The reason why Dave is against that is because he is trying to make the small feeling of victory that comes from paying off a bill turn into your main focus and desire moving forward. Like with Step 1, Dave is trying to cloud your better judgment by focusing on short-term wins that really aren't wins at all. (There are some Washington parallels here, if you know what I mean. It's the same playbook.) Second, we live in a society where having available credit is important, and anyone who doesn't realize it is only hurting themselves. Dave Ramsey's biggest gimmick is dramatically cutting up your credit cards, because you shouldn't have those evil, evil credit cards in your house or wallet. Dave doesn't use credit cards, just a debit card! And you should do the same. You should not do the same. Credit should be built up and used for the right kinds of things, like major emergencies and being able to get better rates on house or car loans, or even just having a small credit card that gets paid in full each month to build the score up. Not having this available to you is a huge hindrence in modern society, because everything is based on credit now. This creates another situation to moralize, and another situation where people are left vulnerable. If you have any kind of full family lifestyle, you don't have a ton of money lying around for if disaster strikes. That's why you have things like insurance, credit cards, and health insurance. It's not an everyday thing, but it's there in case you need it. Ramsey followers talk endlessly about just saving money for absolutely everything in life, but you never reach that point if you're anyone who isn't dramatically making millions per year. It isn't realistic. But it's something that can be used to judge others, because that person just wasn't disciplined enough to make up for their broken leg, they must be buying 10 iPhones. And, if you actually follow that, and aren't building up credit, you will be screwed when you do need credit, and you'll be paying a much higher interest rate than if you were responsible all along. In the macro scale...ever wonder why conservatives constantly harp about the national debt when a Democrat is in control of things, and angrily want the debt paid off over funding anything that actually produces good works for everyday people? Here's where that rhetoric is coming from, blown up into a discussion about the largest economy in the world instead of a suburban family household.
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Jul 21, 2017 03:05
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reignonyourparade posted:My mom is real big on Ramsey and based on that I gotta say if the "live like you're poor, no luxuries ever" really is part of what he's teaching he's doing a really bad job of teaching it. Your mom might just be watching it to support her just-worldism. Of course poor people are poor! They don't follow those teachings of Ramsey! They have terrible impulse control and buy lobster with food stamps!
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Jul 21, 2017 03:15
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If I'm so smart, why aren't I rich?
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Jul 21, 2017 04:12
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Hieronymous Alloy posted:If I'm so smart, why aren't I rich? "Liberals."
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Jul 21, 2017 04:23
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Hieronymous Alloy posted:If I'm so smart, why aren't I rich? Sin, OP. Maybe you should start tithing? ErIog posted:His advice is kind of harmless if you already have money and you literally just need somebody to tell you, "hey pay off your CC instead of buying that new jet ski." If you're someone who's not making a living wage(a lot of people) or are like one health crisis away from bankruptcy(probably most of the US) then it's harmful because it starts from the false premise that you actually have control over your financial life. I'm really interested in the intersection between grifters like Ramsey and conservatism in general. He's got to be pretty popular with churches. They surely deal with a lot of congregants with serious financial needs that come with stagnant wages and rising health costs. However, at least in American Evangelical circles any thoughts of economic justice are socially unacceptable. Plus, tithes! I come from this background, and I'm just astonished at how successfully right wing economic thought has captured such a huge group of religious people. One bit of nuance that really gets lost when talking about Evangelicals is that prosperity gospel is pretty fringe among conservative Christians in the US. At least officially, most theologians and pastors would completely reject explicit connections between wealth and godliness. However, it seems that the leadership is essentially bought and paid for by the Republican party since at least Brown v. Board of Education - they've gained the world and lost their soul. This contradiction makes it possible for Ramsey to exist. A bit of moralistic nonsense gets used to answer a question that's not really allowed to get asked.
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Jul 21, 2017 05:35
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You don't have to blatantly preach the prosperity gospel to be poisoned by it and the just world fallacy. Messages like that are more effectively conveyed with a veil for modesty's sake.
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Jul 21, 2017 05:48
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Religious piety has long been an acceptable veil for the crooked and the sheisty, since it is considered extremely improper to attack one's pronouncements of faith.
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Jul 21, 2017 07:11
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This all sounds like bible 101 , like are goons just discovering the basic tenets now?  i mean if you actually believe in an afterlife it's pretty rational to not care much about any temporary pain in life because you will be rewarded with eternal bliss.
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Jul 21, 2017 13:49
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Buy less candles
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Jul 21, 2017 13:57
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Joe-Bob posted:Sin, OP. Maybe you should start tithing? Dammit I knew there was something Joe-Bob posted:Sin, OP. Maybe you should start tithing? https://thebaffler.com/salvos/the-long-con The short version: there's a huge demographic overlap between people vulnerable to con artists and people vulnerable to right-wing politics.
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Jul 21, 2017 14:02
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AsInHowe posted:[b] I used to actually agree with you on this until I realized that I'm not his target demo at all. People with zero financial understanding and who managed to rack up 10s of thousands in CC debt while still having a decent income are his demo. In that case, freeing up smaller monthly payments can actually work out better, because the "gain" of seeing monthly payments fall off, along with the monthly flexibility of having that payment available during months where expenses are unpreventable higher than average, leads to better results. Financial planning in this sense is less about a giant spreadsheet and more about keeping these people on plan, on budget and continuing the goal. It's completely psychological but watching a couple friends get out of debt, I finally understood where this came from. Paying off that smaller CC completely gave them a measure of self confidence that, yes, this is actually possible and there is a light at the end of the tunnel. I also agree with you on the credit thing, however again we aren't his target demo. His target demo will typically already have a completely trashed credit score and frankly would be better off to a creditor as a blank slate than their current existence. If you ignore the religious stuff (if that's not your thing, and even if it is get out of debt before you crank giving up to 10% if you feel morally obligated to reach that level) and then go deal with a financial planner or something after you pulled yourself out of debt, then yes his advice actually works.
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Jul 21, 2017 14:22
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Here's a good question, does Ramsey ever tell people to file for bankruptcy or is that seen as the ultimate no-no?
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Jul 21, 2017 14:27
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WampaLord posted:Here's a good question, does Ramsey ever tell people to file for bankruptcy or is that seen as the ultimate no-no? I honestly didn't know the answer and was curious myself, google says yes. He sees it as a last resort, of course, rather than a robust tool for getting out of preditory loans which isn't always great but that's more a problem with a generic one size fits all plan. https://www.daveramsey.com/blog/the-truth-about-bankruptcy Anubis fucked around with this message at 14:39 on Jul 21, 2017 |
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Jul 21, 2017 14:37
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Rappaport posted:Buy less candles Buy fork handles?
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Jul 21, 2017 14:43
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Anubis posted:I honestly didn't know the answer and was curious myself, google says yes. That seems like just a basic "here's some info about bankruptcy" page, I was more curious if he actually brings it up when speaking with callers on his show. But hey, take a look: quote:Look at options. Before you file, try your best to pay off your debt. Get on a bare-bones budget. Talk with creditors about lowering interest rates or getting better terms. Move to a smaller place. Get an extra job to pay the bills. You get the idea. Ughhhhhh.
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Jul 21, 2017 14:45
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McDonalds has all your budgeting needs covered.
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Jul 21, 2017 15:00
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Main Paineframe posted:McDonalds has all your budgeting needs covered. I wonder if the lack of a food budget was meant to imply you should be eating all of your meals at McDonald's.
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Jul 21, 2017 15:02
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Uh, doing a written budget is like pretty much the most basic rule for getting control of your finances. Pretty sure that part is not some horrible conspiracy to keep you poor.
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Jul 21, 2017 15:09
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reignonyourparade posted:I gotta say if the "live like you're poor, no luxuries ever" really is part of what he's teaching he's doing a really bad job of teaching it. Toplowtech fucked around with this message at 15:20 on Jul 21, 2017 |
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Jul 21, 2017 15:18
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WampaLord posted:I wonder if the lack of a food budget was meant to imply you should be eating all of your meals at McDonald's. "Other"
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Jul 21, 2017 15:19
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