Posted on 12/28/2024 1:11:54 PM PST by Responsibility2nd
In a podcast, personal finance guru Dave Ramsey boldly declared that even if offered $1 billion at 0% interest for 10 years, he wouldn't take it. That's right, not even a billion dollars with no interest could tempt Ramsey to break his cardinal rule of never borrowing money.
……
"Mathematically, it might make sense," he admitted. "But I built a career and financial success on avoiding debt and I'm not about to change that now. Borrowing money is an unnecessary risk and I'm not interested in playing that game."
(Excerpt) Read more at finance.yahoo.com ...
At 3%?
I’ve been in debt. I’m now out of debt. I can tell you which was better for me. What many don’t realize is that Ramsey’s financial advice, while not sophisticated, has helped many who would be paying 20+% interest on credit cards for everyday needs. He understands the human desire to overextend and gamble. What you and I might do with a billion dollars is probably significantly different than what the average American would do.
That said, although you may disagree with his financial advice, I have found being debt free to be a game-changer financially for my family.
If you can finance tires or furniture or dental procedures interest free for 6 months you’d be a fool to pay cash.
I could pay off a car loan today. But the interest rate is 2.9% so why would I do that? Just because Ramsey says so?
Ditto for us. Don’t borrow money. For about 30 years.
What would the monthly payment be at 0% for 10 years, iow, 120 months.
vs. the Gross income being 46 Million (not compounded)?
I get it, he’s making a point with an extreme (bad) example because his core advising principle is not to get buried in debt so he’s an absolutist to keep it simple for people.
In the real world most businesses could never exist without taking on some debt, and if they take on too much (for example to feed growth that’s too fast) then they fold. They come to know that there’s good debt (low interest loans with favorable terms) and bad debt (i.e. credit cards!). Businesses can actually use good debt to make money, as this absurd $1B 0% interest loan would definitely do. He loses credibility for even saying it.
I’ll NEVER forget the look that a mortgage broker gave me when I told him that I didn’t want to borrow more money than I needed to buy one (of my many) houses. He was in ABSOLUTE SHOCK - I guess that I was the first guy like that, that he dealt with. To me it’s debt, to others, I guess, it’s ‘free money’.
I'm talking about the possibility that there's a dispute between you and the lender. For example, if you want to expand on the house and the lender refuses. Before I'd count my retirement investments enough to live on, I'd want an extra cushion in the investments to pay off the mortgage if needed just in case some disagreement occurred between me and the lender.
But if that never happens, then yes, I'm all about keeping that money invested and using the investments to make the mortgage payments.
He acts like money does not lose value over time. If he has any financial certifications or licenses, they should be revoked immediately.
His advice of not using credit cards and saving money is good advice. But when the transmission goes on the car and you are 1,500 miles from home…that credit card comes in handy!
Being debt free helps me sleep at night.
Everyone has their own row to hoe.
You don’t need a lender’s permission to expand (build onto) your house.
Because ...the Gold Standard.
Does he not invest in the stock market? Or anything that reduces monetary losses from inflation?
Depends entirely on whether you are required to sign personally for the debt, or if it is non-recourse.
Good point. Ramsey is a millionaire. If he is not borrowing money and using debt to make even more money then he’s a bigger fool than I thought.
RE: Having kept to his plans during covid destroyed my business.
Maybe you should have sued like many people do. (not serious—or Sirius, Lee).
A now nearly forgotten business self-help guru top bestselling author and auditorium filling speaker Charles J. Givens? Wealth Without Risk (1988) and Financial Self Defense(1990). His advice company brought in $104 million in revenue a year at one time. His story was a feature of Lifestyles of the Rich and Famous.
Wikipedia:
Over his career Givens was the target of dozens of lawsuits and two court cases for defrauding customers, one in California and one in Florida. The California fraud case found that he had misled his customers by claiming that he had made his money using his financial strategies, rather than by selling his financial strategies, and he was ordered to refund $14.1 million to his customers. Givens settled the Florida fraud case.
Givens was also sued for advocating dropping insurance to save money by a woman whose husband was killed by an uninsured driver. Givens settled the insurance suit in 1993.
I have been debt free since agee 28.
Now 56 years later I have not paid one red cent in interest. That makes it very cheap living with no mortgage, no car payments, no credit card debt. I don’t need to buy collision insurance or home insurance. That alone saved me $2500 every year. I never had an accident in 65 years of driving couple of million miles.
His audience includes many people who don't just have the car loan at 2.9%. They also have a mortgage at 4%, student debt at 7%, 3-4 credit cards at 12% to 18%, etc.
I think he gives good advice for people in financial distress. If you are financially savvy and aren't in distress, his advice is meaningless. You don't go to a weight-loss specialist for help if you are 5'10" tall and weigh 130 pounds.
If I didn’t borrow money I wouldn’t be in business. Period.
“As a financial small group leader for years,”
Do you do that for Dave Ramsey material?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.