Dave Ramsey’s advice is only ever applicable to those who are terrible with self-control. If you have at least mediocre self-control, carefully managed debt can be a boon
There is a British financial advisor who basically says the same thing.
If you can actually manage debt make sure to get some. And then pay it off.
One example: If you get to own a house (that’s paid off) not having debt on it is stupid because you get the lowest interest a regular person possibly can get. Even if everyone else has interest rates up to their mouth you’ll get a rate so cushy investing the money in any index fund will outperform your interest payments.
Disagree, sure you can make more in the open market over time by getting another mortgage on a paid off home.
But that invested money means absolutely nothing if the market has a downturn and you lose your job. Now you’re on the hook to a mortgage you can’t pay and risk losing a place to live.
While on paper you can make more money, it’s very dumb to gamble with things you need to survive. And that’s all any loan is, a gamble that you will be in good health and have the means to pay it back.
the trick here is balancing between liquid assets, physical assets you could sell (cars, things, another house maybe) and investments into the stock market, where you can still beat your inflation handily. It requires more money overall, but you pull out more money long term as well. And if you play your cards right, you get minimum risk aversion. While still managing to put yourself in an economically sound place.
That really depends on how risk averse you are, what your payment is, and how stable your job is. For example, my payment is tiny because I got a great rate, bought below my means, and have owned it for several years (so inflation is doing its thing). At this point, I spend more on food than I do on my house.
To mitigate risk, I keep a sizable emergency fund (sustain lifestyle for 6 months), which is currently invested in very safe bonds and money market funds returning a higher rate than my mortgage rate. Why would I pay down my mortgage when I can get more essentially risk free in bonds?
I really like Dave’s question: if you had a paid off house, would you get a mortgage on it? My answer is, hell yeah if I could get the same rate I have now! It’s free money!
If my rate was >5%, I’d pay it down aggressively. But it’s way below that, so I’m holding it until I have enough to retire.
Dave Ramsey is a bigotted, sexist, racist piece of shit who got rich running mega churches. Ie: scamming people and the government.
He’s fired people because they’ve have children out of wedlock. The whole company is a cult.
Doesn’t that describe pretty much everyone in finance
Isn’t dying poor a good thing? I don’t want to live poor, but you can’t take it with you. I’d ideally spend my last dollar right before taking my last breath.
If you’re unmarried and have no descendants sure. Although you’re kind of screwing them over, these days, you dying is the only way your kids are ever going to be able to buy a house.
With inheritance taxes in the west not even then.
I would love to have inheritance tax as something to worry about.
It would mean I have millions to leave my family.
Unless you are dying with millions, inheritance tax is nothing.
Exactly. I forget the limit, but it’s something north of $10M before it gets taxed in the US. Not sure about other western countries.
You can inherit a fair amount without paying inheritance tax.
at least not without preparation, it’s insane that you have to figure out inheritance in advance or your descendants get screwed. If you set things up properly then here you can inherit a primary residence tax free, but if you don’t set things up then you’re just shafted.
You’re really not. You can do zero planning and as long as the total amount is <$14M, there are no taxes due.
One big difference, however, is pretax investments (IRA and 401K in the US). Sell or convert to Roth before you die and it won’t be an issue at all. If everything is in regular taxable accounts, the beneficiaries even get a step up in basis, so they will only owe cap gains on growth after your death.
Any third rate tax person could figure that out.
The problem is when you spend your last dollar but still are breathing.
The goal would be to spend my last dollar prior to ending up in a hospital where I die and the medical bills go poof.
Problem is, that you normally don’t know how long you’ll live and cannot plan accordingly.
I know when I’m going to die, because I’m an independent free thinker. I refuse to face my death on anyone’s terms but my own. I intend to live a rich and fulfilling life, watch my family grow, and then end it at a time of my own choosing, after giving all of my grandkids the tools they need to go on without me.
If I died to any means but suicide, I wouldn’t think it fair. You can’t fire me, I quit. It’s my life and I’m going to be in control until the last second.
You goober, even if you’re planning on offing yourself you can still die randomly before that.
That’s true, but irrelevant. We’re talking about managing retirement funds. I’m not going to live longer than my retirement funds last. Dying earlier doesn’t change that.
And if I did die of natural causes, it would be a tragedy. I only want to die by my own hand, I don’t want chance to take my death from me.
that literally wouldn’t matter to them, if OP responds i would bet you a lot of a fucking money they would simply say “ok and?” and then leave.
Big brain comment right here. Did you write that before or after seeing OP did that? Did you write it before or after seeing that I told someone I used the term goober because I was keeping it light hearted?
The audacity to use the word goober as an insult in a comment this stupid is baffling.
Of course you’re right. Obviously.
Did you not get the point?
I’m using goober specifically because it’s not insulting. It’s light hearted.
Budgeting is easy when your budget is always zero.
What Dave heard
Im 8, i have $17 in my account, ive been wanting to get this car - can i afford it?
Like how some banks go “save a coffee now, buy a house in a year”
