Dave Ramsey Was in Rare Form Yesterday

[xrac]

.....changed our lives too. My wife and I were living the "American dream"...and by that I mean two car payments, credit cards, eating out, vacations oversees.

We put an immediate halt to all of it about 8 years ago - we have one car which is 14 years old, pay for everything with debit and "security" is actually having savings.

Wanna know the difference for me between going to Aruba and driving 2 hours to the beach? About 10K. That would be the only difference.

The other difference is when my son wants to go to college, I can stroke a check instead of getting him buried in student loans.

Debt should be avoided except for non depreciating items.
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As far as his cheerleading for people to pay off debts, he's fine. But don't think he invented living debt-free. He gets a lot of credit for that. But a lot of us were living that way when Dave Ramsey was living large and going bankrupt.

I never needed a guy on the radio telling me to accumulate wealth rather than debt. It always seemed pretty obvious.

But he's OK at that part because people do need some encouragement sometimes. But his insurance and investment advice is really bad.

Newby, you are correct. I was doing the Dave Ramsey stuff more than 40 years ago.
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When it comes to insurance and investments as far as I am concerned Dave Ramsey is an ***.

 

[Crabcake Johnny]

Debt should be avoided except for non depreciating items.

One week's pay (take home) should be your mortgage/rent. The next week should cover every other household bill and you should have two full weeks left - or save 50% of your net income.

 

[germanwine1]

I also used Dave's program to get out of debt. Good stuff but by no means new or innovative.

I'm no longer a fan and don't listen to his radio show because of his inaccurate advice on investing and insurance. I admire people who can admit when they are wrong about certain things and correct their stance.

That will never happen with his Tennesee size ego.
​

 

[xrac]

ProducersWeb - Retirement - Is Dave Ramsey an ***?

 

[xrac]

ProducersWeb - Retirement - Is Dave Ramsey an ***?

Is Dave Ramsey an ***? As far as insurance and investments is concerned I think the answer is definitely yes.

Dave Says - October 14, 2013

Life insurance vs. 529

Dear Dave,
An insurance salesman told me it’s better to use a life insurance policy for college savings rather than a 529 plan because the child can use it for anything instead of just college. Is that true?
Rusty

Dear Rusty,
Of course that’s what he told you. He’s an insurance salesman!

He was right on one point. If the kid doesn’t go to college, the savings inside an insurance policy can be used for anything. But here’s the catch: There won’t be much waiting for you, because you saved it inside a life insurance policy. The returns stink! Savings inside a life insurance policy won’t get you anywhere near the cash you’d have by investing in a 529 plan.

If you’re going to save for your kids’ college fund, there needs to be lots of talk around the house about actually going to college. It’s not really brainwashing them so much as it’s letting them know the importance of a good education. And they need to know, on no uncertain terms, that the money you’re saving for them is for one thing: college.

What you experienced, Rusty, was an insurance salesman trying to sell insurance. Stay away from it when it comes to saving up for college!
—Dave

There are a lot of reason why I personally would prefer insurance to a 529 plan. Ramsey never mentions any of those things.

1. Insurance assets do not count on the FAFSA. This is huge. If you have enough money stashed in a 529 you basically costing yourself financial aid.
2. Insurance assets do not have to be spent on education. 529 assets can only be used for education otherwise you get hit with a penalty and tax.
3. Insurance assets are protected from market risks. Both WL and IUL have downside protection.
4. If not needed for education insurance offers all of the protection advantages inheritant to insurance.

 

[Norwayguy]

Is Dave Ramsey an ***? As far as insurance and investments is concerned I think the answer is definitely yes.

Dave Says - October 14, 2013



There are a lot of reason why I personally would prefer insurance to a 529 plan. Ramsey never mentions any of those things.

1. Insurance assets do not count on the FAFSA. This is huge. If you have enough money stashed in a 529 you basically costing yourself financial aid.
2. Insurance assets do not have to be spent on education. 529 assets can only be used for education otherwise you get hit with a penalty and tax.
3. Insurance assets are protected from market risks. Both WL and IUL have downside protection.
4. If not needed for education insurance offers all of the protection advantages inheritant to insurance.

You forgot the big one that it is self completing. If you have a policy on the premium payer and they pass it completes itself where as the 529 just stops receiving contributions.

 

[xrac]

You forgot the big one that it is self completing. If you have a policy on the premium payer and they pass it completes itself where as the 529 just stops receiving contributions.

That is right. With life insurance if you die or are disabled and have a disability rider the college education for your kids will still get completed. If you have a 529 and become disabled or die SOL.

 

[Norwayguy]

That is right. With life insurance if you die or are disabled and have a disability rider the college education for your kids will still get completed. If you have a 529 and become disabled or die LOL.

Well they wouldn't be laughing out loud you might want SOL instead.

 

[wfs]

Dave never learned enough with his AL Williams training. He learned it was all about the rate of return, become self-insured and the "theory of decreasing responsibility". He never learned about the permanent need for life insurance to offset estate taxes, he never learned that only about 2% of term insurance policies ever pay (and that they are now huge moneymakers for the insurance companies). He never learned that if his buy term and invest the difference actually worked and the client built millions of dollars in his mutual fund, that there were huge potential tax consequences, and that protecting the assets under the umbrella of life insurance often costs less than other alternatives...

Ughhh... I'm just ranting...

I sell a lot of term insurance, I just can't stand the termite philosophy.