Dave Ramsey LIVE

[Panjandrum]

Couple of things...

Both of you are right.  There are funds with a 12%+  return.  I have a couple in my 401k.  However, you can never assume that rate of return will be valid for the long haul.  You also can't expect them to have that value when you'd like to pull them out.  And Mich is completely right about management fees.  Also, Ramsey's numbers don't take capital gains into account, taxes on dividends, etc.  It's a nice big, fat number that grabs your attention, but it's not the 'real' number.

Also, to put the stupid car issue to bed once and for all, if Dave Ramsey says that you can invest your entire car payment, can someone please explain to me how people are supposed to buy cars?  Are we all supposed to ride the bus or bike to work?  It doesn't matter if you pay for it all in cash up front, or if you pay for it in 48 payments, the only difference is what you pay in interest.  And a lot of times, if you have good credit and get a good promotional deal, you're talking about $2000 or less during the life of the loan.  Spread out over 48 payments, you're looking at a whopping $41 dollars a month that you could be investing.  That isn't going to amount to millions over 30-40 years.

This is NOT about some political leaning.  This is about Ramsey's extremist views about debt avoidance, and how they're illogical, sometimes factually inaccurate, and how he uses religion to give validity to opinions that are potentially preventing people from actually using debt to obtain financial security.

I put money every month into my vehicle replacement fund.  It's not earning much interest, since it's savings, not investment, but there won't be any interest on my next vehicle either.

Okay, that's fine.  But, again, that's not what has been discussed.  They're saying that if you put all of that money into a mutual fund, you'd make millions, which gives you no money to actually buy a car.

Having a vehicle replacement fund in lieu of a car payment is a good idea.  Nothing to debate there.  Also, buying certified used cars are a much better investment than buying new.

However...if you've responsibly built credit, the difference between your move and my move is about forty bucks a month.  Which equals about $15K over 30 years (with no interest).  That's not really significant in the grand scheme of things.

[Fake Sugar Dick (WARNING, NOT THE REAL SUGAR DICK!)]

man that 12% rule of thumb is waaaaayyyyy off, especially considering the meltdown of the last 3 years.  No way that ever gets back to 12%, NO WAY

there will always be downturns. And dropping from 12% to 11% and using a real car payment drops dirty sanchez's little fantasy nest egg from 5.5 million to barely $1 million. But hey, no big deal.

FYI -  management fees in an index fund will run you about .3% (see Vanguard).  In a normal managed fund 0.5-2%.  Not really destroying those returns, espcially for the the managed funds that beat their benchmark on a regular basis (Peter Lynch did it for like 15 years in a row).   I can't believe I'm having to explain this . . . 

I actually only invest in Vanguard funds. They're great, but expecting or assuming 12% returns over 30+ years, even with the minimal mgmt fees, is stupid.

And yeah, tons of Peter Lynches out there. AND THEY'RE SO EASY TO FIND!!!

In sum, you were wrong

I wasn't wrong about anything. You set up a lot of strawmen that you couldn't even back up with real numbers. It was a nice attempt to divert attention from Dirty Sanchez making up bullcac and trying to pass it off as "fact", but it failed.

Not even the 12% mutual fund over the last 40 years???

I DON'T USE STRAWMEN, AND NOBODY ON THIS BOARD KNOWS WHAT THAT MEANS ANYWAYS

I'll concede DS embellished, but his point is valid.  If you saved a car payment every month for the next 30-40 years, you'd have a pot of cash at the end.
 
$378 at 12% per year, compounded monthly for 40 years is $4.5 million  30 years $1.3 million
$378 at 10% per year, compounded monthly for 40 years is $2.3 million  30 years $0.9 million

Not exactly chump change, probably enough to send a grand kid to college in 2050  (of course a car payment isn't going to be $378 in 20 years either, somethin' to think about)

[Dugout DickStone]

Isn't Pan right though?  Whether you divert the funds before you buy the car, or after you still aren't investing it.  You are buying a depreciating asset.

There is no such thing as a free car.

[Dirty Sanchez]

man that 12% rule of thumb is waaaaayyyyy off, especially considering the meltdown of the last 3 years.  No way that ever gets back to 12%, NO WAY

there will always be downturns. And dropping from 12% to 11% and using a real car payment drops dirty sanchez's little fantasy nest egg from 5.5 million to barely $1 million. But hey, no big deal.

FYI -  management fees in an index fund will run you about .3% (see Vanguard).  In a normal managed fund 0.5-2%.  Not really destroying those returns, espcially for the the managed funds that beat their benchmark on a regular basis (Peter Lynch did it for like 15 years in a row).   I can't believe I'm having to explain this . . . 

I actually only invest in Vanguard funds. They're great, but expecting or assuming 12% returns over 30+ years, even with the minimal mgmt fees, is stupid.

And yeah, tons of Peter Lynches out there. AND THEY'RE SO EASY TO FIND!!!

In sum, you were wrong

I wasn't wrong about anything. You set up a lot of strawmen that you couldn't even back up with real numbers. It was a nice attempt to divert attention from Dirty Sanchez making up bullcac and trying to pass it off as "fact", but it failed.

Not even the 12% mutual fund over the last 40 years???

I DON'T USE STRAWMEN, AND NOBODY ON THIS BOARD KNOWS WHAT THAT MEANS ANYWAYS

I'll concede DS embellished, but his point is valid.  If you saved a car payment every month for the next 30-40 years, you'd have a pot of cash at the end.
 
$378 at 12% per year, compounded monthly for 40 years is $4.5 million  30 years $1.3 million
$378 at 10% per year, compounded monthly for 40 years is $2.3 million  30 years $0.9 million

Not exactly chump change, probably enough to send a grand kid to college in 2050  (of course a car payment isn't going to be $378 in 20 years either, somethin' to think about)

Not embellished, just mixed up a couple of numbers off the top of my head.  Wasn't sitting around with a calculator or anything.

[Panjandrum]

Isn't Pan right though?  Whether you divert the funds before you buy the car, or after you still aren't investing it.  You are buying a depreciating asset.

There is no such thing as a free car.

Every single bit of discussion around millions of dollars, compounding interest, etc. means absolutely nothing because the numbers being thrown around aren't applicable to the situation.

Unless you choose not to buy a car period, the amount of money we're throwing around isn't even nearly as high as what's been discussed.  It's a fraction.

[Trim]

How does all this work in regards to corporate jets?

LSOC, I think we might've mumped up big-time.  

[Dr Rick Daris]

man that 12% rule of thumb is waaaaayyyyy off, especially considering the meltdown of the last 3 years.  No way that ever gets back to 12%, NO WAY

there will always be downturns. And dropping from 12% to 11% and using a real car payment drops dirty sanchez's little fantasy nest egg from 5.5 million to barely $1 million. But hey, no big deal.

FYI -  management fees in an index fund will run you about .3% (see Vanguard).  In a normal managed fund 0.5-2%.  Not really destroying those returns, espcially for the the managed funds that beat their benchmark on a regular basis (Peter Lynch did it for like 15 years in a row).   I can't believe I'm having to explain this . . . 

I actually only invest in Vanguard funds. They're great, but expecting or assuming 12% returns over 30+ years, even with the minimal mgmt fees, is stupid.

And yeah, tons of Peter Lynches out there. AND THEY'RE SO EASY TO FIND!!!

In sum, you were wrong

I wasn't wrong about anything. You set up a lot of strawmen that you couldn't even back up with real numbers. It was a nice attempt to divert attention from Dirty Sanchez making up bullcac and trying to pass it off as "fact", but it failed.

Not even the 12% mutual fund over the last 40 years???

I DON'T USE STRAWMEN, AND NOBODY ON THIS BOARD KNOWS WHAT THAT MEANS ANYWAYS

I'll concede DS embellished, but his point is valid.  If you saved a car payment every month for the next 30-40 years, you'd have a pot of cash at the end.
 
$378 at 12% per year, compounded monthly for 40 years is $4.5 million  30 years $1.3 million
$378 at 10% per year, compounded monthly for 40 years is $2.3 million  30 years $0.9 million

Not exactly chump change, probably enough to send a grand kid to college in 2050  (of course a car payment isn't going to be $378 in 20 years either, somethin' to think about)

my favorite part in this whole thread was early in this quoted part where you said .5-2% wasn't "really destroying returns" and then in your latest post showed that the difference in 2% over 40 years is 4.5 million compared to 2.3 million. what an unbelievable rough ridin' idiot.

[Dugout DickStone]

How does all this work in regards to corporate jets?

LSOC, I think we might've effed up big-time.  

I'm signing the whole Board of Directors for this Ramsey concert.  We need this guys secrets.

Does he give advice on which investments return 20%?

[Trim]

How does all this work in regards to corporate jets?

LSOC, I think we might've effed up big-time. 

I'm signing the whole Board of Directors for this Ramsey concert.  We need this guys secrets.

Does he give advice on which investments return 20%?

Use my credit card for the tickets.  I need the points.

[Dirty Sanchez]

Isn't Pan right though?  Whether you divert the funds before you buy the car, or after you still aren't investing it.  You are buying a depreciating asset.

There is no such thing as a free car airline mile.

[Fake Sugar Dick (WARNING, NOT THE REAL SUGAR DICK!)]

man that 12% rule of thumb is waaaaayyyyy off, especially considering the meltdown of the last 3 years.  No way that ever gets back to 12%, NO WAY

there will always be downturns. And dropping from 12% to 11% and using a real car payment drops dirty sanchez's little fantasy nest egg from 5.5 million to barely $1 million. But hey, no big deal.

FYI -  management fees in an index fund will run you about .3% (see Vanguard).  In a normal managed fund 0.5-2%.  Not really destroying those returns, espcially for the the managed funds that beat their benchmark on a regular basis (Peter Lynch did it for like 15 years in a row).   I can't believe I'm having to explain this . . . 

I actually only invest in Vanguard funds. They're great, but expecting or assuming 12% returns over 30+ years, even with the minimal mgmt fees, is stupid.

And yeah, tons of Peter Lynches out there. AND THEY'RE SO EASY TO FIND!!!

In sum, you were wrong

I wasn't wrong about anything. You set up a lot of strawmen that you couldn't even back up with real numbers. It was a nice attempt to divert attention from Dirty Sanchez making up bullcac and trying to pass it off as "fact", but it failed.

Not even the 12% mutual fund over the last 40 years???

I DON'T USE STRAWMEN, AND NOBODY ON THIS BOARD KNOWS WHAT THAT MEANS ANYWAYS

I'll concede DS embellished, but his point is valid.  If you saved a car payment every month for the next 30-40 years, you'd have a pot of cash at the end.
 
$378 at 12% per year, compounded monthly for 40 years is $4.5 million  30 years $1.3 million
$378 at 10% per year, compounded monthly for 40 years is $2.3 million  30 years $0.9 million

Not exactly chump change, probably enough to send a grand kid to college in 2050  (of course a car payment isn't going to be $378 in 20 years either, somethin' to think about)

my favorite part in this whole thread was early in this quoted part where you said .5-2% wasn't "really destroying returns" and then in your latest post showed that the difference in 2% over 40 years is 4.5 million compared to 2.3 million. what an unbelievable effing idiot.

that's because you suck at reading.  you pay those people to exceed a benchmark, so the fee is worth it (or not if they suck at it).  guess what else is true, a fund that averages 10% return over 40 years doesn't get 10% each year, some could be 50% and some could be -30%.  If you want to retire in the year it goes down 30% you could be totally mumped, effing idiot

[Panjandrum]

Isn't Pan right though?  Whether you divert the funds before you buy the car, or after you still aren't investing it.  You are buying a depreciating asset.

There is no such thing as a free car airline mile.

Let me say this slowly, succinctly, and clearly...

It's free if you pay it off at the end of each month and have the bank clear any fees you may incur, and that's assuming you're not using a no fee card.

You keep saying that we're paying, paying, and paying for this.  Do you own a credit card?  Do you know how they work?

[Dr Rick Daris]

man that 12% rule of thumb is waaaaayyyyy off, especially considering the meltdown of the last 3 years.  No way that ever gets back to 12%, NO WAY

there will always be downturns. And dropping from 12% to 11% and using a real car payment drops dirty sanchez's little fantasy nest egg from 5.5 million to barely $1 million. But hey, no big deal.

FYI -  management fees in an index fund will run you about .3% (see Vanguard).  In a normal managed fund 0.5-2%.  Not really destroying those returns, espcially for the the managed funds that beat their benchmark on a regular basis (Peter Lynch did it for like 15 years in a row).   I can't believe I'm having to explain this . . . 

I actually only invest in Vanguard funds. They're great, but expecting or assuming 12% returns over 30+ years, even with the minimal mgmt fees, is stupid.

And yeah, tons of Peter Lynches out there. AND THEY'RE SO EASY TO FIND!!!

In sum, you were wrong

I wasn't wrong about anything. You set up a lot of strawmen that you couldn't even back up with real numbers. It was a nice attempt to divert attention from Dirty Sanchez making up bullcac and trying to pass it off as "fact", but it failed.

Not even the 12% mutual fund over the last 40 years???

I DON'T USE STRAWMEN, AND NOBODY ON THIS BOARD KNOWS WHAT THAT MEANS ANYWAYS

I'll concede DS embellished, but his point is valid.  If you saved a car payment every month for the next 30-40 years, you'd have a pot of cash at the end.
 
$378 at 12% per year, compounded monthly for 40 years is $4.5 million  30 years $1.3 million
$378 at 10% per year, compounded monthly for 40 years is $2.3 million  30 years $0.9 million

Not exactly chump change, probably enough to send a grand kid to college in 2050  (of course a car payment isn't going to be $378 in 20 years either, somethin' to think about)

my favorite part in this whole thread was early in this quoted part where you said .5-2% wasn't "really destroying returns" and then in your latest post showed that the difference in 2% over 40 years is 4.5 million compared to 2.3 million. what an unbelievable effing idiot.

that's because you suck at reading.  you pay those people to exceed a benchmark, so the fee is worth it (or not if they suck at it).  guess what else is true, a fund that averages 10% return over 40 years doesn't get 10% each year, some could be 50% and some could be -30%.  If you want to retire in the year it goes down 30% you could be totally effed, effing idiot

ok. i'm pretty sure you're just rough ridin' with everyone now. kudos for keeping this thread going as long as you did.

[Jeffy]

Offer has expired.

[Dugout DickStone]

So is this a pot or alcohol kind of show?

[Panjandrum]

Isn't Pan right though?  Whether you divert the funds before you buy the car, or after you still aren't investing it.  You are buying a depreciating asset.

There is no such thing as a free car airline mile.

Let me say this slowly, succinctly, and clearly...

It's free if you pay it off at the end of each month and have the bank clear any fees you may incur, and that's assuming you're not using a no fee card.

You keep saying that we're paying, paying, and paying for this.  Do you own a credit card?  Do you know how they work?

We're all paying for the credit cards through bank fees and pricing and bailouts and taxes.

You can get a no fee credit card.  They exist.  Otherwise, you can call your bank and get basic credit card fees removed.  My wife calls ours and gets them wiped all the time if we ever get one since we're valued customers.

Excluding unforeseen emergencies where we had to carry a balance, in the six years I've lived with my wife and shared finances, I think we've probably paid a whopping $50 in interest and fees on our credit cards.  Since we have cash rewards on them, we have probably made a profit since we get a payout of 50-75 bucks a year.  So, in my case, having a credit card has not hurt me at all.

And you're starting to wander off into pretty ambiguous territory if you're saying we're paying for a bunch of bailouts due to credit cards.

[Panjandrum]

So is this a pot or alcohol kind of show?

Werther's Originals.

Actually, it will just be generic butterscotch candies.  We wouldn't want to waste that extra dime getting the brand name when those savings can buy us a nice dinner in about 30 years.

[06wildcat]

I can't believe that there are people here who literally don't understand how credit works, and that there are several instances in which borrowing money is a much more desirable option than spending cash.

Credit is just like booze, sex and drugs....when done responsibly a good time is had by all.

[michigancat]

Not even the 12% mutual fund over the last 40 years???

No one here has shown a mutual fund that averaged over 12% over 40 years once fees are taken into account. You would think it would be easy to find one since Dirty Sanchez proclaimed 12% is the "average track record over the last 40 years for a decent fund".

It's cool, though. I know you're just rough ridin' with everyone and don't believe your bullshit.

Not embellished, just mixed up a couple of numbers off the top of my head.  Wasn't sitting around with a calculator or anything.

When you "mix up" a couple of numbers and they all are "mixed up" in your favor, that is at best embellishing and at worst lying. It sure as crap isn't sharing a fact.

[Saulbadguy]

Isn't Pan right though?  Whether you divert the funds before you buy the car, or after you still aren't investing it.  You are buying a depreciating asset.

There is no such thing as a free car airline mile.

Let me say this slowly, succinctly, and clearly...

It's free if you pay it off at the end of each month and have the bank clear any fees you may incur, and that's assuming you're not using a no fee card.

You keep saying that we're paying, paying, and paying for this.  Do you own a credit card?  Do you know how they work?

We're all paying for the credit cards through bank fees and pricing and bailouts and taxes.

Aaaaaaaaaaand there you have it.

[chum1]

as an exemplary american, my goal is to live as lavishly as possible while accruing as much debt as possible before i die.  if you're not doing the same, you're the communist schlub who picks up the tab. 

[tdaver]

Ramsey's message makes since for those people that have dug themselve a huge debt hole and have creditors beating down their doors.  Downgrade your car, house, etc. and stay away from CCs in the short term until you get back to a managable level of debt.  Once there, Pan's way is good if you're disciplined and Ramsey's way is fine if your not.

[OK_Cat]

So is this a pot or alcohol kind of show?

i heard he does a 12-minute jam session by slamming quarters on trash cans.

[Fake Sugar Dick (WARNING, NOT THE REAL SUGAR DICK!)]

Not even the 12% mutual fund over the last 40 years???

No one here has shown a mutual fund that averaged over 12% over 40 years once fees are taken into account. You would think it would be easy to find one since Dirty Sanchez proclaimed 12% is the "average track record over the last 40 years for a decent fund".

there's a list of like 35 in this thread

[Dr Rick Daris]

Ramsey's message makes since for those people that have dug themselve a huge debt hole and have creditors beating down their doors.  Downgrade your car, house, etc. and stay away from CCs in the short term until you get back to a managable level of debt.  Once there, Pan's way is good if you're disciplined and Ramsey's way is fine if your not.

it seems like it would just be easier to ust go out and make more money then to do all the stuff listed above. that's what i'll never get about the ramsey stuff. instead of being hyper vigilant about the money you have going out, why not focus a little bit on what your dumbass has coming in. don't have enough money? go make more. dumbasses.