Unpopular Opinion: I don't like Dave Ramsey

OP
grossklw

grossklw

Senior Member
Joined
Mar 24, 2017
Messages
102
Location
Wisconsin
What are a few books you would recommend to learn the basics of real estate? I’ve read a couple and was very intrigued. Most of our net worth is in our 401ks but we do own some farm and timberland which is real easy to manage on a day to day or even yearly basis. I’d like to take on a rental at some point and see how it goes. My goal would be to eventually have half my net worth in real estate. I don’t even know if it would be practical but eventually I’d love to buy a place in a ski town in Montana or Wyoming (couldn’t afford Jackson or big sky) and see if I can rent it out during the high seasons to break even and then Ultimately own it free and clear when it comes time for me to flee this deteriorating state. Has anybody else bought a condo/cabin somewhere like Red Lodge and been able to make it work through rentals?
The book on Rental Property Investing- Brandon Turner
Buy, Rehab, Rent, Refinance, Repeat- David Green (I use this strategy a lot)
What every real estate Investor needs to know about cash flow- Frank Gallineli
Recession Proof Real Estate Investing- J. Scott

Podcasts-
The Real Estate guys Radio (love this for macroeconomics, not a ton of little details though)
Biggerpockets Real Estate Investing Podcast (need to jump around, but specifically shows 200 and 300 to get started buying)
Vacation Rental Success (for short term rentals, used this one a lot lately as I got my cabin underway)
The daily Real Estate Investor (good nuts and bolts podcast)

There are a few different short term rental forums to check out including biggerpockets which I frequent. Also as an FYI I only manage my short term rental, I have property management for the rest of my portfolio and they do a phenomenal job, but if you hire a bad one it can be really really bad.

The numbers can certainly work with short term rentals. I bought my first one this summer on Lake Superior and have it listed now that renovation is complete with proper permitting and have had 5 bookings in the first 4 days it's been online. It can be a bit of a battle getting the necessary reviews, but I think it's going to be a great long-term investment. It's important to make sure your market allows them, some like Duluth MN do not unless your grandfathered in.
 

Scooter90254

Senior Member
Joined
May 7, 2018
Messages
210
Location
Michigan
The world is weird these days. You can agree with 90% of what the guys says but because you disagree with the other 10%. He's dumb and you don't like him.

If the OP has 12 months of emergency fund and no unsecure debt then he's following about 90% of his plan. Its the last 10% you're disagreeing about.

Have a sizeable emergency fund
Spend your money wisely to get the best value.
Don't carry large unsecure debts.
Don't over pay for cars/boats/etc.
Have a budget/plan
Carry as little debt as possible
Invest in good mutual funds

That's 90% of his teachings.

Once you have all that in place and you want to venture out with some risk good for you. In a private conversation he would probably agree.
 

2WaterMatt

Junior Member
Joined
Dec 3, 2020
Messages
14
I like his common sense approach, but I agree with the idea that a free thinker is going to disagree with him somewhere and do their own thing. At least, I do.

Also, I'll speak to the ELP. I'm a real estate broker. I sell land etc so I'm not interested in his program, but I looked into it a bit when I was in residential. He doesn't come out and say it but he leaves the impression that he doesn't make anything from his ELPs. I quickly discovered that is far from true. He charges $3,000 to come to Nashville and take some training, and then you give him 30% of every commission check you make from his leads. That quickly soured me on the idea. Every agent I know that was in the program didn't like it and got out
 

georgiaboy

Junior Member
Joined
Aug 31, 2020
Messages
47
Ditto what you said about the ELP program. I think it’s super slimy how he and many other RE services (Homelight, UpNest, celebrity endorsements) don’t disclose what they earn from the referral. On the flip side, it’s illegal for me to do that as a licensed broker.
 

Rockydog

Junior Member
Joined
Oct 22, 2012
Messages
12
The other thread got me thinking and I'm just wondering if anyone else feels the same. I'm just stirring the pot a bit, but I love talking finances.

Anyone else here despise Dave Ramsey's advice for people with a handle on their finances? I can't imagine I'm the only guy, I'm sure it's an unpopular opinion but here are my main reasons.
1.) His early advice is good for people struggling, but he's snake oily to me when he talks about using only his endorsed local providers including financial planners (which have no fiduciary responsibility to their clients) or real estate agents. You think his trusted "partners" actually do anything other than pay his company for that certification? They end up getting paid more when they pick high commission funds (less money for you)
2.) He advises against ETF's even though they generally beat his mutual funds when you include fees all f-ing day.
3.) The way he treats people with different opinions of his is ridiculous. They're an idiot or a moron if they don't think his advice is gold.
4.) His opinion that essentially all debt is bad other than your personal home. I have a ton of mortgages on investment property that pay me every single month, couldn't purchase them without debt.
5.) You likely won't get 12% returns in the stock market, especially with his mutual fund ideas when you count fees.
6.) Credit cards are not evil, personal control is. I could take my family to Hawaii every year on credit card rewards just from my business on things I need to spend money on.

People who he's great for.
1.) People struggling with their finances.

He'd tear apart my portfolio, but my net worth would be about 30% of what it currently is if I would've went his route 4 years ago instead of buying my first rental. I'm a much bigger fan of the choose FI, biggerpockets, bogleheads, or mr money moustache train of thought.
completely agree. he is for fad people who need gimmicky sales to control debt with a package, weight with a p90x package, and on and on
 

Aginor

Senior Member
Joined
Jul 23, 2020
Messages
132
Thats one reason I do not get into these Dave type people. They dont have some big secret. They just tell you what you should be doing. People know what they should do they just dont want to. Eventually people get so into the hole they realize they effed up and seek out help to do what they already know they should be doing.

That’s not at all true. I would go so far as to say _most_ people have no idea what they should be doing with money. If they’re seeking out knowledge and he’s giving sound advice away for free, then why do you take issue with it?

I was one of those people. I made more money than I knew what to do with and I would blow it on stupid stuff. I didn’t have a plan because I didn’t know I needed a plan. We never had home ec or any sort of finance class in high school. Hell, I have an engineering degree and with all my math classes I wasn’t required to take any finance classes in college. It wasn’t until I started planning for my wedding that I had ever even considered using a budget, which led me to Dave.

I had always thought just pay all your bills on time and don’t carry a credit card balance and put enough in your 401k to get the match and then spend the rest. By the way, this is while being smart enough to work as a developer for one of the 5 largest market cap companies in the entire world.

I also quickly learned that Dave doesn’t match my risk tolerance for investments and all sorts of nuanced disagreements, but the message is quite clear: live on a budget and you will be in control of your money. Reduce expenses and liabilities, raise income and assets. A simple formula that anyone who knows anything about finance will tell you. It doesn’t matter if it comes from Dave or Dalio or Mr. Money Moustache, if they’re spreading good knowledge and helping people, you shouldn’t have an issue with it.
 
Last edited:

Aginor

Senior Member
Joined
Jul 23, 2020
Messages
132
I just got a new Subaru Outback for a commuter this summer. $28k, zero down, zero interest. I doubt paying cash would make it enough cheaper to make it worth tying up $28k that could otherwise be invested, available for investment opportunity, or pad the top of my rainy day fund.

That said, I wouldn’t have bought it if my pickup still qualified for my employers program in which they “rent” our vehicles from us and basically pay hundreds more a month than my monthly payment.

I think what he is getting at is when interest rates drop, prices go up because it provides credit to a larger pool of consumers, which drives up demand. See tuition prices with the government student loan program. See current housing prices with the lowest interest rates ever.


Sent from my iPhone using Tapatalk
 
Last edited:

Aginor

Senior Member
Joined
Jul 23, 2020
Messages
132
For sure. I didn’t have two nickels to run together in 2010 or else I would have jumped into one or two rental properties myself. One of my big points of contention with Ramsey is he seems to believe strongly in investing in real estate yet he only wants you to pay for that upfront in cash? 1) How the heck is that even practical and 2) don’t you lose one of the key benefits of real estate investing which is having a tenant pay your mortgage for you?

Yea... tell that to all the landlords out there right now that haven’t had tenets paying for the past 13 months...
 

Mosby

Senior Member
Joined
Jan 1, 2015
Messages
1,405
The average American reads at a 6th grade level. The biggest issue most Americans have is debt and lack of savings. I think that's his target market.
 

lacofdfireman

Member
Joined
Dec 22, 2016
Messages
79
Location
St. George, UT
I’ve watched a few people I knew that had Amazing real estate portfolios and to look at them on paper you’d think they had the world by it’s balls. Then the housing market crashed. Rents went way down and they went down with it. Lost everything they had. One guy had 5 income properties and within about 5 years ended up being a renter himself. Now they are back at it again. Income properties are great as long as they can produce income. Thats why Dave Ramsey says buy them cash. Thats seems like pretty solid advice but very few will ever be able to do that. Sometimes it takes risk to get gain. I’d almost guarantee you that even after Dave Ramsey went bankrupt he didn’t follow his own program to get to where he is today. I bet he was once again highly leveraged at one point but most likely bought at the right time to make it all work out this time. It’s all about the timing. 100%


Sent from my iPad using Tapatalk Pro
 

Wrench

Senior Member
Joined
Aug 23, 2018
Messages
2,918
Location
WA
Until you have lived a life where $200 per month keeps the lights on and the tax man happy with nobody calling about $$ you owe them, you'll never know what rich is.

I was rich in 2006, broke in 2008...as was 99% of the remaining Americans.

Today I can drop a grand on frivolous crap in the classifieds and I can tell my boss to kiss my ass and it will affect my financial situation in no way shape or form.

I don't own 27 rentals, but I sleep better than anyone who does.

Rich is not a number, it's a value . You'll know when you do not have that value.
 

mattyd23

Newbie
Joined
Mar 22, 2021
Messages
8
Like you said, he is perfect for the majority of people that are drowning in debt and can't handle their finances.

If you are not one of those people, ignore him.

I've built my wealth buying real estate with low money down. He would have a heart attack if he saw my strategy. Who cares?
 

Justinjs

Senior Member
Joined
Oct 29, 2020
Messages
176
Location
Michigan
I’ve watched a few people I knew that had Amazing real estate portfolios and to look at them on paper you’d think they had the world by it’s balls. Then the housing market crashed. Rents went way down and they went down with it. Lost everything they had. One guy had 5 income properties and within about 5 years ended up being a renter himself. Now they are back at it again. Income properties are great as long as they can produce income. Thats why Dave Ramsey says buy them cash. Thats seems like pretty solid advice but very few will ever be able to do that. Sometimes it takes risk to get gain. I’d almost guarantee you that even after Dave Ramsey went bankrupt he didn’t follow his own program to get to where he is today. I bet he was once again highly leveraged at one point but most likely bought at the right time to make it all work out this time. It’s all about the timing. 100%


Sent from my iPad using Tapatalk Pro
5 isn't that many. If it took 5 years from the beginning of the housing crash to when he was broke, I'd say it's other factors at play.
 

BroncoAZ

Junior Member
Joined
Sep 6, 2021
Messages
35
i don’t care for the proselytizing, but the rest is good advise for those trying to get out of debt. I have bought his Total Money Makeover book for a few friends who needed the help, I even paid for his 9 week course for a close friend. My friend who took the course was recently divorced and in major debt, she followed the steps and worked her way out of 1.5x her initial annual salary in debt in 3 years.

I disagree with his advise on driving a hoopty, my divorcee friend was dumping $250 per month into her 300K mile Honda Civic and she was convinced she couldn’t upgrade. I worked in the car business and got her into a brand new Sonora for $280 per month. The girl needed a safe car.

I’m at that position where I could use some direction on the next steps. I’m debt free except for a 15 year mortgage on my old house which is now a rental, put away 16% of my gross in Roth 401K/IRA, have a decent retirement started, and have the down payment saved for my next home.
 

Marble

Senior Member
Joined
May 29, 2019
Messages
1,655
i don’t care for the proselytizing, but the rest is good advise for those trying to get out of debt. I have bought his Total Money Makeover book for a few friends who needed the help, I even paid for his 9 week course for a close friend. My friend who took the course was recently divorced and in major debt, she followed the steps and worked her way out of 1.5x her initial annual salary in debt in 3 years.

I disagree with his advise on driving a hoopty, my divorcee friend was dumping $250 per month into her 300K mile Honda Civic and she was convinced she couldn’t upgrade. I worked in the car business and got her into a brand new Sonora for $280 per month. The girl needed a safe car.

I’m at that position where I could use some direction on the next steps. I’m debt free except for a 15 year mortgage on my old house which is now a rental, put away 16% of my gross in Roth 401K/IRA, have a decent retirement started, and have the down payment saved for my next home.

Build your financial basis on a rock that no matter what comes at you, financial ruin will not force you to leave. Pay off your house.

If you listen to the everyday millionaire episodes on Ramsey, the great majority of people who achieved that success level did not use debt, credit cards, rentals or inheritance to become wealthy. And these are not people that are Ramsey butt sniffers. They are everyday people that figure out by way experience, lessons learned from relatives and gaining knowledge, how to become wealthy.

Becoming wealthy is not an issue of how big your income is. It is an issue that surrounds decisions made over decades of work.

Sent from my SM-G986U using Tapatalk
 

J5ady

Junior Member
Joined
Nov 25, 2018
Messages
15
I love Dave- his advice will get many on track- but its just not for everyone.
 

Razorbacker

Newbie
Joined
Aug 10, 2020
Messages
2
I have respect for Dave's message in getting folks to establish a budget, a plan to get out of debt and planning for the future. Really most of his ideals are just basic common sense financial principles that our parents and grandparents practiced when times were difficult.
His advice in the investing is the area I'm not fully sold on. Some of the mutual funds he recommends are high fee (such as American Funds) and some of his expected returns (12 % annual) are just unrealistic. I lean towards Jack Bogle's investment plan. Invest in low cost mutual funds, balance you acceptable risk level between stock and bond funds and invest for the long term.
 

Latest posts

Featured Video

Stats

Threads
205,634
Messages
2,121,802
Members
51,564
Latest member
BarleyDog
Top