Credibility of Dave Ramsey?

[Camtender]

I recently watch a Dave Ramsey DVD with a group of people and noted several things (I think the video was from the 2007 vintage).

1) Dave seems to have excellent advice on living within your means and debt free - I agree with almost everything he says in this area,

2) In my opinion, Dave said several things in regards to investing that concern me and I think he might have steped outside his knowledge area.

First he said several absolutes, which is a red flag for investment advice - such as "I will never invest in gold again" (do to his loss on a leveraged gold bet).

Also, he stated that your personal residence is your best investment, stated that he would invest diversify his money by A) purchasing five equities and states AIG, Citi and "another bank" and B) implied that mutual funds will always average a 10% return overtime and C) stated that diversification was owning individual stocks and mutual funds (he included real estate as part of diversification).

3) I think Dave is a good person, but I think the facts are he went bankrupt investing his own money and became wealthy selling media on how to live frugal.

4) Other people watching the video were hanging on his every word, even writing down his old stock picks (Citi & AIG - which actually may turnout to be good investments now that they have lost 90%+ of their value since the DVD was released.

I know there was a credible news article talking about issues similar to this, does anyone know where it (they) are?

And finally, why is this important? I think almost everyone has heard of Dave at this point and I would like to help people I know correct some of the investment advice Dave states.

[thriftyandboringinohio]

Re: Credibility of Dave Ramsey?

I recently watch a Dave Ramsey DVD with a group of people and noted several things (I think the video was from the 2007 vintage).

1) Dave seems to have excellent advice on living within your means and debt free - I agree with almost everything he says in this area,

2) In my opinion, Dave said several things in regards to investing that concern me and I think he might have steped outside his knowledge area.

First he said several absolutes, which is a red flag for investment advice - such as "I will never invest in gold again" (do to his loss on a leveraged gold bet).

Also, he stated that your personal residence is your best investment, stated that he would invest diversify his money by A) purchasing five equities and states AIG, Citi and "another bank" and B) implied that mutual funds will always average a 10% return overtime and C) stated that diversification was owning individual stocks and mutual funds (he included real estate as part of diversification).

3) I think Dave is a good person, but I think the facts are he went bankrupt investing his own money and became wealthy selling media on how to live frugal.

4) Other people watching the video were hanging on his every word, even writing down his old stock picks (Citi & AIG - which actually may turnout to be good investments now that they have lost 90%+ of their value since the DVD was released.

I know there was a credible news article talking about issues similar to this, does anyone know where it (they) are?

And finally, why is this important? I think almost everyone has heard of Dave at this point and I would like to help people I know correct some of the investment advice Dave states.

Here's a lengthy Nashville Newspaper article about him.
http://www.nashvillescene.com/nashvi...nt?oid=1194744

I agree with your assessment -he's a natural promoter like P.T. Barnum using the style of a tent revival preacher, and he's a lousy investment advisor.

While his sermon offers little to most of us at iTulip, his avoid-and-escape-debt message is good for a monthly payment consumer to hear.
I recommend him to people who fall into the debt trap because he is persuasive and beguiling; his central message is correct; and his techniques work.
His poor investment advice can't damage a person who is broke and deep into a debt-peonage hole.

[Camtender]

Re: Credibility of Dave Ramsey?

I found a transcript from the Dave Ramsey show on gold.

http://mountainsteps.blogspot.com/20...g-gold-is.html

RAMSEY: Tonight's "Myth vs. Truth," Myth, gold is a good investment.

(LAUGHTER)

"Truth, gold has a poor track record. That's being real nice. Gold sucks. I don't care how many ads you see on TV or listen to on talk radio, do not buy gold as an investment. Listen, you're playing the commodities market, come on. Seriously, this is the most volatile market on the planet. Well, gold is what everybody goes to if the world comes to an end. A failed economy does not return to the gold standard. Show me one since the Roman Empire that did. It never has.

We used the gold standard at different times. But gold has no more intrinsic value than paper does. It's just because somebody is willing to exchange it.

Let me tell you what happens in a failed economy. Look at Katrina hitting New Orleans. There is a temporarily failed the economy, a micro collapse. What happens? Gas becomes very valuable. A bottle of water becomes valuable. clean blue jeans or shoes are a big deal. Those are the kinds of commodities you want in a failed economy.

Y2K people did not pile gold into their garage. Well, some of them did. But they got water and electricity and they got canned food and they prepared that way for something that didn't happen. That is how some people prepare. They would not go out and trade gold bars if things happened bad at Y2K.

This survivalist crap does not work with gold deal. And gold has a 70-year track record of 4.3 percent average annual return. That is horrible. It does even keep up with inflation......

............Seriously. Gold? Come on. But people bite on this stuff, because they have this illusion. All the conspiracy theorist guys get into it. "

With a message like this, no wonder no one owns true money

[thriftyandboringinohio]

Re: Credibility of Dave Ramsey?

With a message like this, no wonder no one owns true money

No harm done - it leaves more gold for us!

[Camtender]

Re: Credibility of Dave Ramsey?

Dave Ramsey calls Peter Schiff an idiot

http://www.youtube.com/watch?v=S98_e...layer_embedded#

Dave Ramsey on inflation

"Explanation Of Inflation
Janine has a pretty basic question ... how does inflation work, and how can we stop it?
QUESTION: Janine wants to know what causes inflation, and how can it be stopped. Dave tells her what goes into it.

ANSWER: Inflation is the increase of the cost of something. If the inflation rate of gasoline is 10%, that means the cost of gasoline went up 10%. What causes things to go up in price are a lot of variables. One thing that can make it happen is supply and demand. If there are 100 people wanting 10 things, there will be a bidding war that will drive the price up. Conversely, if there are 10 people wanting 100 things, the demand is not as great and the price goes down.

Some other items in our economy have more complicated things to do with it. For example, if you buy food from outside the country, that country’s economy affects average inflation in this economy. If you’re buying a house and the shingles on the roof are more expensive because of oil in the shingles, then oil caused housing prices to go up. It gets very complicated and interconnected at that point. Basically, inflation is just the increase of prices."

[ASH]

Re: Credibility of Dave Ramsey?

1) Dave seems to have excellent advice on living within your means and debt free - I agree with almost everything he says in this area,

2) In my opinion, Dave said several things in regards to investing that concern me and I think he might have steped outside his knowledge area.


3) I think Dave is a good person, but I think the facts are he went bankrupt investing his own money and became wealthy selling media on how to live frugal.

4) Other people watching the video were hanging on his every word, even writing down his old stock picks (Citi & AIG - which actually may turnout to be good investments now that they have lost 90%+ of their value since the DVD was released.

I've listened to Dave Ramsey's radio program for some time (financial voyeurism). I agree with your assessment. Excellent advice for living frugally, getting out of debt, basic personal finance issues, and even what sounds to me like decent small business advice. But he doesn't have much grasp of macroeconomics or, in my opinion, investments.

In my opinion, the good he does helping people control their personal finances far outweighs any damage he might do by giving advice outside his area of expertise.

[flintlock]

Re: Credibility of Dave Ramsey?

I agree with what others are saying here about Ramsey. Good advice on debt and avoiding it and fairly good advice on how to pay it off( priorities, etc) He sounds just like my Dad did.

But he is typical of his self-promotor type who have made a lot of money and so therefore think they are natural geniuses at everything they do. He has ventured outside of his realm of expertise with investments and economics imo. His buy and hold strategy on index funds and telling people that it is a rock solid safe investment could be dangerous. And who could look at Gold's track record over the last 10 years and say its "stupid"?

I really don't care for his method of selling himself . Heavy use of the church. Heavy into creating books and packages to sell when all he is talking about could be put into a small pamphlet. Seminar? About what? Don't spend more than you make and avoid debt. What is the other 3 hours about? There is absolutely nothing in his show that is real earth shattering news to anyone. He's just re-stating things most of us already know. He does have an entertaining way about him and offers refreshing bluntness in an age when BS is the norm.

[BigBagel]

Re: Credibility of Dave Ramsey?

Heavy use of the church. Heavy into creating books and packages to sell when all he is talking about could be put into a small pamphlet. Seminar? About what? Don't spend more than you make and avoid debt. What is the other 3 hours about?

Your absolutely right. You could detail his financial advice on one typed page double spaced and some of that advice is not so great. I think the secret to his success is that in the United States you have a million voices telling you to be a debt slave. TV, radio, magazines, internet, the whole culture, it's buy, buy,buy. He's telling you otherwise and some people have to be preached to on a regular basis to stay on the straight and narrow.

[grapejelly]

Re: Credibility of Dave Ramsey?

he's ENTERTAINING, folks. C'mon, isn't that obvious?

[Camtender]

Re: Credibility of Dave Ramsey?

Dave Ramsey calls Peter Schiff an idiot.

http://www.youtube.com/watch?v=Amluk6HxUH8

[flintlock]

Re: Credibility of Dave Ramsey?

He went off the other day on people who buy gold. Called them stupid idiots. He said gold had "only" done well the last 7 years or so. lol. As if the mutual funds he loves so much always go up.:rolleyes:

I tune into his radio show from time to time just to hear how foolish people can be. People with six figure incomes up to their necks in credit card debt. Almost every one owns at least one new luxury car and other crap Americans think they need to own to prove they are "somebody". Self-inflicted misery.

[radon]

Re: Credibility of Dave Ramsey?

He went off the other day on people who buy gold. Called them stupid idiots. He said gold had "only" done well the last 7 years or so. lol. As if the mutual funds he loves so much always go up.:rolleyes:

I tune into his radio show from time to time just to hear how foolish people can be. People with six figure incomes up to their necks in credit card debt. Almost every one owns at least one new luxury car and other crap Americans think they need to own to prove they are "somebody". Self-inflicted misery.

When I first encountered this type of American I thought that everyone was rich. I couldn't wait to figure out how they were doing it. Imagine my disappointed when I discovered that they were borrowing money and spending every cent they ever earned on their clothes and automobile.

[flintlock]

Re: Credibility of Dave Ramsey?

Exactly. My Dad used to call them 10 cent millionaires. All show, no money. People used to be fooled by this, but these days you can spot the fake wealthy types from a mile away by the weeds growing in the gutters of their McMansions. Or the bald tires on the Lexus.