@Jill_L wrote:

@shoptastic @Tarantado,

I would love to get into stocks. I feel like I'm behind the 8 ball with no experience. Is there anything you would suggest in order to "break in?"

Stick with indexing. Index funds are "passively managed" funds that are a collection of auto selected stocks of a variety of stocks and relies on the market, as opposed to "actively managed" funds aka mutual funds that relies on a human to stock pick for you.... Which has been proven that more than 90% have NOT beaten the market (after accounting for fees, gains/losses and inflation). In other words, you have a good gamble in dumping your money into the market to watch your money grow. My personal advice is to automatically set aside a fixed amount every paycheck, week or month, something, to dedicated to your investments.

Stock-picking should be left for another day or left out altogether, unless you're the gambling type, which I am from time to time.

To conclude, simply select some index funds, as they're low fees, and eliminates the human, stock-picking factor, then invest in it. It's as simple as opening a Vanguard, Fidelity, Etrade account, etc., and starting today with NO additional fees to buy-in. Personally, I have a large vest in the S&P500 index, which is an index fund composed of the top 500 companies in the country. Next thing to consider is to whether to dump it into a tax-shielding account like a Roth IRA and max that out, and/or buying stocks in a taxable account. That's ultimately up to you and your goals. Personally, I split my investments in my Roth IRA, 401k (mainly due to my employer match) and taxable accounts spread between Etrade, Robinhood and Fidelity.

Of course, this is NOT financial advice, but more on a take of my experiences on investing, just for a final disclaimer

Yup. That is safe and easy.

@Shop-et-al wrote:

Yup. That is safe and easy.

Or, just apply to own a Chick-Fil-A or In-N-Out franchise store.

Actually, I briefly thought that U-Haul, which is easy for a landowner to enter, would be useful in some parts of the world.

@Tarantado wrote:

@Jill_L wrote:

@shoptastic @Tarantado,

I would love to get into stocks. I feel like I'm behind the 8 ball with no experience. Is there anything you would suggest in order to "break in?"

Stick with indexing. Index funds are "passively managed" funds that are a collection of auto selected stocks of a variety of stocks and relies on the market, as opposed to "actively managed" funds aka mutual funds that relies on a human to stock pick for you.... Which has been proven that more than 90% have NOT beaten the market (after accounting for fees, gains/losses and inflation). In other words, you have a good gamble in dumping your money into the market to watch your money grow. My personal advice is to automatically set aside a fixed amount every paycheck, week or month, something, to dedicated to your investments.

Stock-picking should be left for another day or left out altogether, unless you're the gambling type, which I am from time to time.

1.) I agree with, Tarantado, Jill on investing in an index fund - specifically a S&P 500 one, as Warren Buffett recommends to his wife and to lay investors:

[www.cnbc.com]

He says to do it consistently - whether monthly, bi-monthly, tri-monthly, quarterly, bi-annually, etc. I would think at least twice a year is needed, as a minimum, to capture market gains. Once a year just sounds too little, but that is probably subjective on my part. I don't have proof of that.

On average, the U.S. stock market has returned 10% annualized throughout history. Jurrien Timmer of Fidelity Investments (largest online brokerage) gives that figure. Buying a broad U.S. index fund, such as the S&P 500 or as Niner recommends, a "total stock market" fund, would capture that gain.

2.) I also agree with Tarantado to avoid single stock picking when first starting out in investing (really, I would only do this if you've spent time learning how to value businesses and reading up on investing a lot). And, I agree to avoid actively managed mutual funds when first starting (or, perhaps, altogether - heck, if Warren Buffett is okay with his wife having 90% of all her investments into an S&P 500 index fund, then probably so should most people). The fees and commissions eat into your profits much more than with low-cost index funds and that is not even taking into account that most active money managers cannot even beat the S&P 500. So, why pay these people?

3.) If you're just following Warren Buffett's advice and buying an S&P 500 index fund several times a year, then you don't probably won't need any of those "wealth advisor" brokerages. I would just use a large, well-known, and low-cost online brokerage, such as Fidelity, Vanguard, etc.

Many have gone to free trading now. Although, I still pay for my trades (i.e., buying and selling stocks/funds) and am sort of lazy to switch brokerages - it's a bunch of paper work. I don't mind paying a few dollars for a trade.

Make sure, however, your internet security is good with an online brokerage. You don't want to get hacked!

My parents used to use a "wealth advisor" brokerage service with Morgan Stanley. They will either charge 1% of your assets annually or charge a ridiculous trading fee. In return, you do get their advisor services and people may call you from the firm with stock recommendations. To me, it's not worth it. 1% is easily the difference between a few hundred thousand dollars if just investing $100-$200/month over 40 years. There is no guarantee these special services and stock recommendations turn out well. I'd rather just stick with the safe and easy Warren Buffett recommended S&P 500 index fund via a cheap, big (Fidelity is the largest) online brokerage.

There may be smaller online brokerages that offer competitive fees, but I personally would not use them. I want to use the largest (or one of the larger ones) for "safety" reasons. Big names like Fidelity have e-fraud protection (although, you have to do your part as well and use anti-virus and check your monthly statements for unusual activity and report it back quickly). If anything happens and it's not your fault, they will refund you your stolen gains. I'm not sure the smaller brokerages have that e-theft protection.

If you want to be extra careful, you can even use an online brokerage, but only place trades by phone through that online brokerage. It sounds weird, but you can do that. Trades by phone cost more than online trades, though.

SUMMARY: So, once you're ready to do the above, it's easy. Just a touch of the keyboard. No physical labor needed.
------------------------------------------------------------------------------------------
4.)*** DISCLAIMER: I'm personally not buying U.S. broad index funds right now. Even though this is prudent advice from Warren Buffett for long-term investors, I think the U.S. is hyper-valued and there are many technical reasons why the stock market has gone up so much the past few months that have nothing to do with company valuations, nor the economy.

a.) There is extra liquidity in the financial system, due to the Federal Reserve pumping newly printed money (essentially QE - quantitative easing - even though they refuse to call it that) into markets to quell the bank "repo" issue that cropped up a few months ago. That money finds its way into the stock market.

b.) Year-end "chasing" by money managers who have lagged their benchmarks. This is a huge criticism of actively managed funds sometimes. Their portfolio managers can be fired if they have a couple of years of bad performance and their bonuses are tied to how well they match or beat their benchmarks. If a PM is behind near the end of the year, he or she is often incentivized to take your hard-earned money and "gamble" it up to try to eke out some more gains.

I've actually sold more funds/stocks this year than I've bought. Just keeping lots of cash in my brokerage money market account for better opportunities. I don't want to "chase" all-time, overvalued highs.

Edited 1 time(s). Last edit at 11/22/2019 08:01AM by shoptastic.

A lot of information in the posts above, but let me focus a little on the types of accounts.

If you are eligible for a 401k at work, put aside enough in the account to maximize your employer's matching. That is "free money". Where you go beyond that depends on your circumstances.

You can have both a 401k and an IRA. My personal preference is a Roth IRA, which does not give you a tax deduction when you put the money in and the offset is that you pay no taxes on the money you take out in retirement. (Like everything else, there are rules and penalties for pulling money out too soon, but it still is the best deal on wheels out there.)

IRA contributions are limited to earned income up to an annual limit that is raised every couple of years and by your age bracket. Money you put into a Traditional IRA is not taxed when it goes in but is taxed when it comes out. (Also subject to rules and penalties for pulling money out too soon.) Your annual IRA contribution can be split between a Traditional IRA and a Roth IRA such that you get tax relief on some money now and not on other money.

Generally investment options in a 401k are seriously limited because the financial institution setting up the 401k for your company limits you to a dozen or so mutual fund options. Fees on the funds tamp down the performance of the portfolio. When you leave an employer you should roll your 401k out to a "Rollover IRA" with a discount brokerage house. Most 401k plans are structured to reduce current taxation (as does a Traditional IRA), though some companies are beginning to offer 401k plans that are post tax (like a Roth IRA) and thus future withdrawals will be tax free in retirement.

The thing to remember here is that retirement plans--whether 401k, 403b, Traditional IRA, Roth IRA, SEP or other varieties--require earned income for contributions. If you have a part time or seasonal employment, you probably are not eligible for many types of plans, but you still can contribute to a Traditional or Roth IRA up to 100% of that earned income. (For 2019 the contribution limits for IRAs are $6k or $7k if you are 50 or older.) Remember that an IRA deduction can be split between a Traditional and a Roth IRA.

If your spouse is salaried you may be able to fund your IRA based on his/her income, regardless of your own.

In the year you turn 70 1/2 you MUST begin taking systematic withdrawals from your Traditional IRA. There is no requirement to take withdrawals from your Roth IRA.

In the year you turn 70 1/2 you may no longer make contributions to your Traditional IRA, though you are allowed to make contributions to a Roth IRA.

Today's Daily Fun Fact:

[www.nytimes.com]

50% of households do not own ANY stocks.

Only 24% of households even have $2,500 or more in stocks.

84% of the U.S. stock market is owned by 10% of households.

Flash provided a lot of great advice. I want to add that as a business, you are also entitled to contribute money to a SEP IRA. Contributions to a SEP ITA are tax-deferred, and you can contribute up to 25% of your net business profits, up to $56,000 in 2019. The amount that you contribute to a SEP IRA does not impact contributions to an IRA, Roth IRA, 401k, or 403b.

Actually not at all surprising considering the lack of financial education provided in the schools when kids are their most impressionable. It would have served me and my peers a lot better to learn about finance in 'Home Economics' than to learn how to make mayonnaise from scratch. We learn money handling from our parents and if your parents were not savers or investors, you are not likely to be a saver or investor. Probably the biggest household financial changes in my lifetime are the change from needing a single breadwinner to needing two breadwinners; the 30 year mortgage (my parents had a 4 year mortgage and we really scrimped during those 4 years while they bought the house); the advent and spread of credit cards (not to be confused with the 'account' at the local department store that the store billed out monthly if there was a balance to be paid). Many folks around during the Great Depression lost their savings and it took 'free' small appliance gifts to persuade them to open a bank or S&L account with the cash stashed under the mattress. In the third world, cash is still stashed under the mattress, in the sock drawer or in an old coffee can--preferably in US Dollars to safeguard against devaluation of the local currency. Americans know and understand very little about financial matters and safeguards for their own financial future.

A few months back the statistics were published that the 'average' American has around $8900 in bank accounts. Singles 34 and younger have about $2700 and couples in the same age bracket have about $4700. Obviously we are not a country of savers. The Federal Reserve surveys showed that 21% of Americans would need to incur high interest of a payday advance or credit card loan to pay for a $400 emergency, while 12% would not be able to cover the cost at all. The scary part is that the 2019 findings are only slightly better than the previous year in what is supposed to be a thriving consumer economy.

@Flash wrote:

Actually not at all surprising considering the lack of financial education provided in the schools when kids are their most impressionable.

I agree. We learned nothing about stocks in secondary school. I took business/economics in high school and even then I don't recall a chapter on stock investing.

Warren Buffett has a YouTube channel that is a cartoon of him and his advice for kids. But, I doubt many kids these days watch it. Dave Ramsey is the most popular financial talk show host in America, but his audience is usually "older" from what I can gather.

I think rants like his in my OP should be required listening to every person in high school. I'm very serious! It would give so many people so much more hope and a goal to set.

I agree with shopetal that an arbitrary goal like becoming an millionaire is not the most important thing in life. Our morality and self-development should be. However, I do think it's useful to have such goals. For me, it's even fun!

I enjoy putting cash into my millionaire jar when I can.

According to Financial Times:

[www.ft.com]

The apparent gaps might matter more to some than to others.

[i would not be brave enough to agree with anything I say, lol! I do believe that a specific goal of "millionaire" might cause some to fall short of their actual needs, which could be multi-or mega-millions or billions. it could push some people into a greed mode or into a trajectory that does not suit them. Suze Orman has expressed that a few million dollars are like a few cents. Perhaps this is true for some people. Location, family composition, and other factors matter. Certainly, costs are increasing and some people will have more difficulty with resourcefulness than others.]



Edited 1 time(s). Last edit at 11/23/2019 07:30PM by Shop-et-al.

@shoptastic wrote:

@Flash wrote:

Actually not at all surprising considering the lack of financial education provided in the schools when kids are their most impressionable.

I agree. We learned nothing about stocks in secondary school. I took business/economics in high school and even then I don't recall a chapter on stock investing.

Warren Buffett has a YouTube channel that is a cartoon of him and his advice for kids. But, I doubt many kids these days watch it. Dave Ramsey is the most popular financial talk show host in America, but his audience is usually "older" from what I can gather.

I think rants like his in my OP should be required listening to every person in high school. I'm very serious! It would give so many people so much more hope and a goal to set.

I agree with shopetal that an arbitrary goal like becoming an millionaire is not the most important thing in life. Our morality and self-development should be. However, I do think it's useful to have such goals. For me, it's even fun!

I enjoy putting cash into my millionaire jar when I can.

Dave’s investing advice is terrible. He is good for basic financial sense, but when you’re ready to invest with bad debts out of the way, Dave will keep you out of debt, but that’s about it.

So I found 'At Last the 1948 Show'. I linked to the first episode... the last skit has a little something to do with money... : The next episode does, too... sort of...

[tubitv.com]

@Tarantado wrote:

Dave’s investing advice is terrible. He is good for basic financial sense, but when you’re ready to invest with bad debts out of the way, Dave will keep you out of debt, but that’s about it.

Yeah, that is the common criticism of Dave Ramsey - listen to his advice on personal finance and getting out of debt, but disregard his investing advice.

I think that's a fair summary. I had forgotten to give that disclaimer of Dave Ramsey earlier (but it was in the back of my mind).

I do still think that his OP rant is a good one for high schoolers. Investing $100/month over many years WILL lead to a strong build up of wealth all things being equal (i.e., we don't suffer a catastrophic medical condition and the like).

I think it would be fair and helpful, though, to be specific when pointing out where Dave Ramsey is wrong with his investment advice rather than just saying he is "terrible." Some of what he says lines up exactly with what Warren Buffett says.

I typically do not click his "investing" videos online, because I learned early on that he often went against the grain of many of the greatest investors of history (whom I've studied), so I don't know everything Ramsey says. I just know that I've seen enough to not want to listen to him on investing. I do, however, repeat the "good" portions of his advice and find him effective at getting his point across to the masses. I just wish he were more sophisticated in his investing knowledge.

Edited 1 time(s). Last edit at 11/24/2019 02:26AM by shoptastic.

@Irene_L.A. wrote:

We may be close to being Millionaire's on paper, but until I get that Million in my hands, I don't think of it that way.
Having to work and save for a vacation shows me I'm not making enough monthly. We, at least me, enjoy our homes, pay our taxes and mortgage and hope we can leave what we have to our kids. My home will pay for my old age care, not be free for me to spend, (well maybe some).....guess in my eyes, one just can't win, when you retire and hardly any money comes in, can you really say, your a Millionaire...sorry, I can't.

I see where you are coming from. We don't touch the equity in our houses. I don't cash out my stock investments, since those are for retirement, and I also try not to spend money unless I really need to. We theoretically meet the definition, but I spend less than people making a third of my salary. But, we don't worry about paying our bills, and if we needed 10k for a roof, which we do at the moment, it's not a big deal. It's nice not needing to worry about money, that seems to be the best thing about it being there. In order to live like a millionaire, you probably need multiple millions. We still stay at motels for $60/night, etc. I think a Hampton Inn is extravagant when we are traveling. We would eat out maybe once a week for $25 before the mystery shopping. But, my husband needs to go to physical therapy now for $75 a week in copays, so $300 extra a month, we don't flinch, it does not affect us. That's where having it is beneficial. But, we don't buy Mercedes, or lease cars, or take fancy vacations.

Edited 1 time(s). Last edit at 11/24/2019 08:59AM by Niner.

@Tarantado wrote:

@Jill_L wrote:

@shoptastic @Tarantado,

I would love to get into stocks. I feel like I'm behind the 8 ball with no experience. Is there anything you would suggest in order to "break in?"

Stick with indexing. Index funds are "passively managed" funds that are a collection of auto selected stocks of a variety of stocks and relies on the market, as opposed to "actively managed" funds aka mutual funds that relies on a human to stock pick for you.... Which has been proven that more than 90% have NOT beaten the market (after accounting for fees, gains/losses and inflation). In other words, you have a good gamble in dumping your money into the market to watch your money grow. My personal advice is to automatically set aside a fixed amount every paycheck, week or month, something, to dedicated to your investments.

Stock-picking should be left for another day or left out altogether, unless you're the gambling type, which I am from time to time.

To conclude, simply select some index funds, as they're low fees, and eliminates the human, stock-picking factor, then invest in it. It's as simple as opening a Vanguard, Fidelity, Etrade account, etc., and starting today with NO additional fees to buy-in. Personally, I have a large vest in the S&P500 index, which is an index fund composed of the top 500 companies in the country. Next thing to consider is to whether to dump it into a tax-shielding account like a Roth IRA and max that out, and/or buying stocks in a taxable account. That's ultimately up to you and your goals. Personally, I split my investments in my Roth IRA, 401k (mainly due to my employer match) and taxable accounts spread between Etrade, Robinhood and Fidelity.

Of course, this is NOT financial advice, but more on a take of my experiences on investing, just for a final disclaimer

I do the exact same thing. That's good advice. I have money that is put into Vanguard automatically. I do own individual stocks though, but each one is around 5% at most of the total, so my stock account has about 25 different stocks, making it like an index of sorts that smooths out the risk. Target has more than doubled since I bought it, and Ferrari has gone up 50%, but Kraft has lost a ton. Overall I'm up 17% on my own "index." But, like 90% of my stocks are in the Vanguard total stock fund.

Any guesses on how much you need to live like a millionaire instead of having a million? Staying at the Ritz Carlton or Four Seasons, owning luxury cars, eating at the fine dining restaurants, joining country clubs, etc? Living in a fancy house, or whatever people with lots of money stereotypically do?

@Niner: This information has been around for decades (and maybe longer than that). There are all sorts of ways to live well-- as one may define that-- without spending much money. Proportionately, how much money can vary by millions of dollars or more. The issues arise when even one person attempts to impose their ideas of what living well means on others, who may want or need other outcomes.

We have food to eat, a place to live, transportation, and and heat and electricity, and our health. We're good. I guess people have different things that they want or need.

@shoptastic wrote:

@Tarantado wrote:

Dave’s investing advice is terrible. He is good for basic financial sense, but when you’re ready to invest with bad debts out of the way, Dave will keep you out of debt, but that’s about it.

Yeah, that is the common criticism of Dave Ramsey - listen to his advice on personal finance and getting out of debt, but disregard his investing advice.

I think that's a fair summary. I had forgotten to give that disclaimer of Dave Ramsey earlier (but it was in the back of my mind).

I do still think that his OP rant is a good one for high schoolers. Investing $100/month over many years WILL lead to a strong build up of wealth all things being equal (i.e., we don't suffer a catastrophic medical condition and the like).

I think it would be fair and helpful, though, to be specific when pointing out where Dave Ramsey is wrong with his investment advice rather than just saying he is "terrible." Some of what he says lines up exactly with what Warren Buffett says.

I typically do not click his "investing" videos online, because I learned early on that he often went against the grain of many of the greatest investors of history (whom I've studied), so I don't know everything Ramsey says. I just know that I've seen enough to not want to listen to him on investing. I do, however, repeat the "good" portions of his advice and find him effective at getting his point across to the masses. I just wish he were more sophisticated in his investing knowledge.

No problem. I can list my gripes from the top of my head, but it’d be difficult and time consuming to source which specific videos he stated his views on:

1. Dave believes company stocks bought at the place of your employment where you can get a 15% discount is a waste of time.

2. Dave prefers you be completely debt free instead of contributing the minimum employer match of your 401k.

3. Dave pushes HARD and claims that since his mutual funds beat the market, we should all do the same. He brushes off how expensive the commissions and fees mutual funds have and acts like they aren’t much compared to index funds.

4. Dave looks down on accruing mortgage debt from investment properties and suggesting buying wholesale in cash.

5. Dave believes absolute no credit is the way to go.

6. In my situation, Dave would prefer I pay off my 15 year mortgage at my primary home BEFORE I venture into investment homes, which I already own. I also plan to reset my primary home’s mortgage to a 30 year and cash out, which goes against Dave’s believes in being house debt free first.

7. Dave’s anti-credit cards no matter the situation. It’s laughable actually.

8. Not necessarily on the financial topic, but Dave remains neutral on MLM’s, possibly because he’s networked with very successful folks in the business. Personally, I’m extremely anti-MLM and not even sure there’s a business where I’d even be OK with an MLM model without it going against my morals as being deceptive.

@Niner wrote:

Any guesses on how much you need to live like a millionaire instead of having a million? Staying at the Ritz Carlton or Four Seasons, owning luxury cars, eating at the fine dining restaurants, joining country clubs, etc? Living in a fancy house, or whatever people with lots of money stereotypically do?

Interesting question, Niner.

One thing I've noticed about myself is that I enjoy quite a lot of non-"rich" people stuff.

I don't think having lots of money would change my habits THAT much. I like shopping at Target - probably a middle-class or working class store. It's not because I used to work there, but just the combination of good pricing, a one-stop shop for everything you need, and store "aesthetics." By no means is it a Rodeo Drive sort of layout, but I do like their store set-up and find the experience relaxing.

Walmart, on the other hand, is visually unappealing to me and a chaotic experience. I leave feeling stressed out, lol. Same with Costo probably. Target - I leave feeling happy and relaxed.

I don't necessarily like the above-average cost sit-down, full service chain restaurants out there: Long Horn Steakhouse, Bravo Cuccina, Yard House, PF Chang's, etc. etc. These aren't "rich" tastes per se, but maybe "above-average" cost restaurants? I don't feel I've gotten good value and that enjoyable of an experience eating out at many of these places (parents like them, though). I am just as happy, if not more, eating at Chick-Fil-A, Popeye's (now that they have the chicken sandwich back), Panera Bread, or getting a healthy smoothie at a cafe. Creating my own salad makes me happy.

Don't need a fancy car either. I am happy with a Honda Civic that gets the job done and is reliable.

The places that make me happiest are free: libraries; Barnes & Noble; and universities.

I like being in and around places with books and learning. Cafes inside of them can be relaxing. I'd rather spend a weekend afternoon listening to an academic lecture at an idyllic university campus vs. watching TV, skiing, going to the beach or what not.

Another thing I enjoy is exploring towns. That is free and can be done with just a car. I like just going to a town and seeing its layout/architecture, shopping areas, food, etc. Just "exploring" and seeing something new can be fun and free.

I have a weird fascination with hospitals and airports too. I don't know why. I like going to them (not as a patient, nor as a travel passenger) and just exploring them. I'm weird.

I'll just hang out in their cafeterias/food courts sometimes to read and watch.

Edited 2 time(s). Last edit at 11/24/2019 05:03PM by shoptastic.

One reason I hate Amazon is they've destroyed so many of my favorite bookstores over the years: Borders, Books-A-Million, and Barnes & Noble all shuttering around me.

Part of the answer depends upon how often you want to stay at the Ritz Carlton. You could easily spend $1000 per night at a Ritz Carlton, so 365 days and $356,000 is gone. A surprising number of millionaires are quite frugal. Warren Buffet lives in the same house he bought in Omaha in 1958. Admittedly, he also has a private jet. A million dollars can be expected to comfortably produce $50,000 in retirement income although YMMV. So, living like a millionaire might well mean living on $50,000 a year which would not be a luxurious lifestyle at all in LA or SF or DC or NYC, but would probably enable you to hire a maid and live in a nice house in WV or Waco, TX (I am at the moment watching Fixer Upper and marveling at the low cost of housing there). I think that I could live a fairly luxurious life with $500,000 per year, so I would like a $10,000,000 nest egg, please.

@Niner wrote:

Any guesses on how much you need to live like a millionaire instead of having a million? Staying at the Ritz Carlton or Four Seasons, owning luxury cars, eating at the fine dining restaurants, joining country clubs, etc? Living in a fancy house, or whatever people with lots of money stereotypically do?

We are actually going to stop at Target. I love Target and Costco. Walmart has a different vibe. We still go once in a while if we need something and we are in the middle of nowhere. I'm not a fan of eating out unless the food is good quality. That has been the learning experience this year. Out of the places we have visited this year, Seasons 52 and True Foods Kitchen have been my favorites. I don't eat packaged food or things with labels. I like to cook and know what I am eating. You can really tell the next day with the leftovers just how poor quality some of the restaurant food really is. The food turns into a pile of processed grease.

Yeah, I'm surprised how many chain places have very low quality food. You pay $15-18/entree and it's not even fresh sometimes. I am happy eating a grocery store salad bar or a health smoothie and avoiding those places. I do like Panera's salads. The interiors of them have gotten a bit run down where I live, though. Surfaces are kind of gross and it's not as nice as newer restaurants.

@Tarantado wrote:

2. Dave prefers you be completely debt free instead of contributing the minimum employer match of your 401k.

5. Dave believes absolute no credit is the way to go.

7. Dave’s anti-credit cards no matter the situation. It’s laughable actually.

I think Dave Ramsey is too strict with his approach to getting out of debt first at all costs (and avoiding it too).

I sometimes wonder if it's due to the trauma of having lost his first several million dollars at a young age from being over leveraged and having the bank call his debt. He's talked about that experience a lot and says it was a major defining experience in his life. There was a lot of shame and trauma from it. He went from being a self-made millionaire to flat broke and having church members have to deliver food to his family and a debt collector of sorts harass his wife (asking why she'd marry or stay with a man like him!!!).

I agree we ought to be very careful with debt, but am not as extreme as Dave Ramsey on it. Sometimes debt is simply an investment. Going to Harvard Law School, for example, on $250,000 student loans might be a good calculated debt risk. Debatable. But, the point is that there can be times when debt is fine.

While he's too extreme on debt issues, imo, I do see where he is partially and generally coming from, though:

You want OTHERS TO PAY YOU interest and not the other way around, where YOU PAY OTHERS INTEREST. Often debt can be stupid. There are lots of callers who say they've spent hundreds of thousands of dollars on degrees in fields that pay only a meager salary and are stuck in debilitating student loan debt (which is non-dischargeable in America - the only debt, I believe, you cannot get rid of through bankruptcy).

Others have 10's of thousands in credit card debt.

I think he does a good job of warning people of these pitfalls, but, again, is too extreme in wanting people to practically never take on debt and/or get out of it at all costs.

Edited 1 time(s). Last edit at 11/24/2019 06:11PM by shoptastic.

Like anybody touting a concept, Ramsey or Ormand or any other 'guru' has to "take it over the top" in part to be controversial enough to get and retain attention. (Note that we are discussing him/them here.) The same thing happens in diet fads, face creams and what not. Slavish adherence to a 'guru' will always disappoint in the long run. Common sense and looking for that which works for the individual is the key.

Debt can make sense when the item obtained gains in value. Debt can make sense when it allows you to keep your cash with which to do other productive things. My son recently moved and bought a house. He could have paid all cash for it, but with a mortgage rate of 3.5% available for 30 years, it made no sense to pay all cash when he could finance 80% of the house at that rate and invest that cash in stocks that over time average yielding 7%. A few years back he purchased a new car with .7% interest (yes, 0% would have been better, but with the less than 1% interest loan he was able to negotiate a better purchase price than with the 0% rate). While financing a car is generally not smart because it goes down in value, the cash he held onto instead of buying outright has grown at a rate of about 20% average per year since he bought it. My point is that each situation needs to be evaluated in terms of risk/reward. Dave Ramsey or any other 'guru' who is setting down hard and fast "rules to live by" would draw the line at the car debt and evidently with the house as well.

I like a slogan from co-depedence literature, which probably originated somewhere else.

Progress, not perfection. If people are making progress toward their selection of financial goals, this is good. If they are satisfied with their progress, this is good. The contentment may contribute to a general sense of well-being in their lives. If they want additional information, they are free to seek that from the numerous resources that are available. When outsiders try to push others into certain choices or behaviors, this raises red flags. They have barged in where they have not been invited. This disrespect and co-opting is far worse, imho, than anyone's mistake or issue.

Talking of issues... Jut now I am following the rigid Whole30 as much as possible. The goals are to eliminate ingredients which may contribute to food allergies and gain insights. So far, I am pleased with the results. I weigh less, do not miss eliminated ingredients, and do not care if anyone thinks that what I am about to say next is blasphemous, un-American, or otherwise deleterious.

Traditional holiday foods might be mindless eating. So what if turkeys go on sale on Black Friday and yield weeks of cheap leftovers?!? The traditional meal was designed by long-dead people to honor long-ago events. It is important to remember the history today . It is not important to eat in specified way We can save money in other ways. We can eat a modest bit and send what we used to spend to a charity. We could save that money or buy gifts for the faceless names on giving trees.

Indeed I would challenge. Traditions such as gathering together for a harvest festival or Thanksgiving do have their place. They are important to the sense of group that gathers, whether we are farmers, store clerks or gig workers. They can be subject to change in content, but that change needs to come gradually so that the sense of the occasion is not lost.

I remember the first Thanksgiving when my Aunt Norris did NOT bring over a green bean casserole. She rather brought brandied peaches, which were so much better than a green bean casserole. She never brought the casserole again--always the brandied peaches. Another year the sweet potatoes with marshmallows on top was replaced by small sweet potatoes served with butter and cinnamon. Stuffing moved from inside the bird to under the bird for sanitation of leftovers. Cranberry sauce made a change for a couple of years to cranberry relish but then returned to cranberry sauce (to everyone's relief). On our table the whole turkey presentation bird has changed to spatchcocked which makes it more energy efficient to cook as well as having it easier to take apart later to send leftovers home with folks (another tradition in our group). So yes, our holiday table will be 'Traditional' but not the same as 40 years ago as it has evolved to lower calories, fresher components and different participants as we share stories of friends and family who have passed and introduce new friends and family to the ongoing mix.

Christmas for us has evolved as well. There are no "gifts" anymore. Rather for the past decade or two we have moved to "stocking stuffers" that have no giver names attached, are not wrapped and generally are more funny and/or useful little things rather than traditional Christmas fare. We will still make the traditional coffee cake and have our traditional shirred eggs, there will be plenty of coffee and likely will be sausage or bacon. There will be snacking during the day--I found some wonderful almond paste filled pastries at IKEA that are in my freezer awaiting Christmas, fresh fruit, cheese & crackers, etc--and lots of visiting. There may be small projects the hostess needs help with--such as installing the new smoke detectors, taking apart a clogged drain, replacing an electric outlet--but mostly it is just together time with lots of gossip about family, friends and things seen.

Answering Niner's interesting question on how much does one need to live like a millionaire...I like nice hotels, give me Four seasons, upscale restaurants, travel 1st class, I'm made for it and handle it well. I also do well at BJ's Brewery, Red Robin and the more casual chains we all work for. My confidence comes from within, but I know I'm not living like a millionaire, so, how do I change it......sell my investment, house, I don't care to invest my money in an upscale hotel working anymore...what makes me happy nowadays is freedom to come and go, good health, and a Cosmo and good meal...as you age you do need less...whatever we have in savings doesn't count, we're not spending it. How does one save after retirement, I'm listening.