Dave Ramsey quotes/ideals

Dave Ramsey quotes/ideals

I’m a big fan of this guy. Not so big a fan of his mutual fund approach (that’s after all where he makes his money), or his absolute no credit card rule (but I know why he makes it) but his advice to those getting started in their financial affairs is solid. I listen to his nightly radio show when I can. Here’s a few of his core tennats or opinions I really like:

1. There is NO reason for you not to retire rich in this country – no matter what you make now. You have a responsibility to be saving for your retirement and future medical needs. This can be done by people making $35k/year – but it requires you budget, take responsibility for yourself, and not live outside your means (which few people do). Our country provides miriads of ways to save money tax free (401k’s, Roth IRA’s, etc) that many other countries do not – and people retire there too. You’re now going to ask that they pay for you after retirement when you piddled away what you should have been saving? You are not owed a comfortable retirement by anyone. It’s your responsibility to plan for and live within your means.

2. Never buy a house in which you are paying more than 45% of your take-home pay on a 15-year mortgage. Yep – you’ll be living in 1/2 the house other folks are buying, but you’ll have it paid off in the time it’ll take them to finish their car payments. And then you can upgrade. The 45% rule keeps you having a real life and covers needing new roofs and other maintenence.

3. Home ownership in the current climate likely costs more than renting. When housing prices aren’t rising faster than inflation, pound for pound, if your living modestly you can get by renting for cheaper (because of home ownership costs of repair, taxes, etc). Long-term, however, it’s better to get into a house as an investment – but wait until conditions favor you.

4. If you’re waiting for the government to fix your life – you’ll be waiting a LONG time. Seriously, you’re actually expecting the government to fix your life? I mean really. These guys can’t even get their own lives in order. Additionally, if you buy into this, you’re buying into socialism – and you should look long and hard how governments/countries as large as ours that adopted the philosophy turned out. Socialism CAN work on smaller scales by dedicated individuals (I know, I lived at a monastery for 4 years). Idealistically, it should work on a country scale – but in reality people aren’t ideal and don’t always think of the other’s good as equal to their own. In fact, it required a lot of effort and constant vigilance even at the monastery. It starts getting really rocky the larger it gets.

5. Who’s in the White House has very little to do with your personal situation. Your attitude has far more influence over the state of your life/finances than any government official or whether a democrat or republican is in office. If you’re in trouble, odds are very good the problem lies largely with your decisions. Examine those first. Do your homework and learn about what you need to be doing. Failing to plan is a plan for failure.

6. You don’t have a right to other people’s money. You have a responsibility to yourself and making sure you are on track. If you can’t make a living doing what you’re doing – then it’s telling you that you’re not offering a service or value to your community that anyone wants. Demanding that others support you is selfish and destructive to a working society; because you are providing (or not providing) something of no value to the world. Regardless of what you think you’re doing. If everyone did that, then society would be in grave danger of collapse as critical services might not get done.

7. Never buy a new car – unless you pay cash and all your other goals are met. New cars are a luxury that depreciates faster than you can say ‘fiduciary irresponsibility’. But maybe once in your life, if it fits easily in your long-term plans, you may want to splurge and go for it. A reward for a life well lived. Other than that, buy a used one. Never lease (he calls them ‘fleece’ cars)

8. It has been shown that conservative people donate more of their time, money, blood, etc than moderates or liberals– Living in Portland, you can’t throw a rock without hitting a non-profit organization. And talking to some of the folks living from working at them is enlightening. Does anyone actually stop and ask the question where the hundreds of thousands of dollars these things take to run each year come from? Hint: it’s not the government for most of them. It’s large funds set up by Carnige, Gates foundation, and donations by folks who can give 100’s of thousands of dollars. Yet, some of my friends that work at them are constantly decrying Gates and his ilk.

Prof Aurthur Brooks, himself a registered Democrat, released his results on the most extensive analysis of public data on giving patterns of liberals, moderates and conservatives. The results? Even to his surprise (he says he himself hated writing what he wrote), he found conservatives give more money, donate more time, give more blood, and in short, out-give their liberal counterparts by wide margins. He also documents that because of this, conservatives reap extra health benefits from the secondary effects of feeling wellbeing. All this is backed up by extensive peer-reviewed data. Read the articles for more info – they’re based on public databases you can get yourself.

2 thoughts on “Dave Ramsey quotes/ideals

  1. Your final point seems like a complete troll! It’s hard to see this as more than “liberal” bashing. I hate to even use the terms liberal and conservative because all people are much complicated that a simple label such as conservative or liberal. Sorry to beat on you here, but what even is the point of a study like this? To further divide the country and make “conservatives” feel superior? I am extremely doubtful of the results (to raise one point – if religious people give generously to promulgate their own religion, that may not necessarily be in the best interest of society as a whole or those who don’t agree with that religion), but that’s better served as face-to-face discussion next time we see each other than some long-winded email conversation.

  2. I must admit – I added #8 by accident – I meant to add it as a just a line by itself and not one of Ramsey’s ideals – but I’d bet he would agree to a bit (he does have things to say about always donating 10%).

    I’m posting a bit on the Ramsey ideals I don’t agree with, so keep posted.

    But as for Professor Brooks writing, don’t call it a troll too easily. Since 2003 he has been director of nonprofit studies for Syracuse University’s Maxwell School of Citizenship and Public Affairs. Outside that work he’s best known for his regular op-ed columns in The Wall Street Journal (13 over the past 18 months).

    Here are reviews of “Who Really Cares” by Wall Street Journal, Reason magazine, etc (http://faculty.maxwell.syr.edu/acbrooks/). The data is what’s interesting – it’s seems much like reading “Freakanomics” in style. He presents the data and then attempts to make some observations – but not value judgments. He also notes that people that drink moderately tend to be more successful. All these terms require definition (what does ‘successful’/’liberal’/’conservative’ mean for example), but the data is there to be looked at. I certainly hope this doesn’t make conservatives feel ‘superior’ (it shouldn’t); but I found it interesting because it was an actual study of the data of giving (among other things).

    The value to society judgment is also left up to the reader. It simply reports that these folks give more and these others don’t. The conclusions are left up to you – where they should be. But to say his work is troll bait is not completely fair in my book. Here was a guy trying to figure out if the assumptions of ‘liberal’/’conservative’ attitudes was correct. Nor would I say that making the assumption that religious organizations do charity work just to gain converts. One can argue that any organization is trying to push their value system by forming groups protecting the environment/animals, race hate groups, or car clubs. Gaining converts is not why I do the charity work I do. It’s pretty rare to get converts because of charity work actually and if that’s what you’re going for – you won’t be very successful or happy with the progress. Anyway – sounds like we have something fun to talk about next time we run into each other. 🙂

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