Dave RamseyT

[Crabcake Johnny]

I'm not exactly sure what the huge deal is with homeownership. Obviously everyone should own their own home. But you don't own crap until the note's paid off.

Aside from that you can sell in 10 years, and now have to take the equity to dump in order to buy another house....unless you move to a cheaper area or downgrade.

You can ride it out, stay in the same home and pay off that note in 30 years. Then you have a 30 year old piece of crap house that needs endless repairs. I can't tell you how many countless thousands of dollars my father-in-law has put into his paid-off house. Over the past fives year - that and getting whacked with new tax assessments.

Just in repairs and taxes alone he's looking at selling. Then what? Yes, he gets cash but also has to now buy a new house. The best he can do it buy half the house he has now and actually pocket some money. His house it worth around $500,000. Go price up homes in MD that cost $250,000 and tell me which lot number you'll be in.

 

[Crabcake Johnny]

In Phoenix you keep hearing about people who pulled out thier equity and now can't sell the house because they owe more than it is worth in the current market. Trust me I've heard all the supply and demand formulas in existance.

We have neighbors in a worse situation. Bought 2 years ago for $410,000 when the real estate market was in a frenzy. Listed it for $440,000 and actually had some bits. Problem is the bank's appraising it now for $380,000 so anyone who wants to buy it needs a chuck of cash down. No takers - on the market over a year. Bank said they bought it "over-valued." Their "invesment" is probably gonna cost 'em around $30,000. Great plan.

 

[J.R.]

In Phoenix you keep hearing about people who pulled out thier equity and now can't sell the house because they owe more than it is worth in the current market. Trust me I've heard all the supply and demand formulas in existance.

EXACTLY. Those individuals more than likely leveraged their current property, bought another property to fix up and rent, market went to crap and now they are screwed because of poor financial decisions and lack of market knowledge. The average person puts down up to 5-10% on a new property, whereas prudent investors who like "acceptable risk" put down as much as 30%-40%. Simple fact is that nothing is fool-proof. People can either figure out a way to succeed in (insert field here) or they can go and work a normal 9-5 job like the majority of the population.

Good thing is that with the aforementioned people in your post, they keep the cycle going by creating foreclosures and/or tax deeds/liens opportunities for other investors......

 

[CHAS.R]

There was a thread about Ramsey a few weeks back. I am familiar with him and his philosophy (which is fine to a point).

I found his show locally a few days ago. He is more entertaining than I recall from years ago when I listened to him while driving around Nashville. I do like the fact that he makes people accountable for their decisions & actions. Not enough of that.

Don't agree totally with his debt free philosophy. My opinion is your home is the LAST thing you want to pay off. Accumulate wealth in other areas, not where you live.

Any way . . .

I went to his site & signed up for his newsletter for chuckles & grins. Then I decided to explore his CCT program.

$3750!!!

Amazing.

That's how much he charges to become one of his minions teaching his course work.

So, how much does it cost to become an ELP?
Anyone know?

Here's a different angle.....
If your looking strictly for a "Value Add" to you clients and for your insurance reputation this is a great org. to align yourself with.

For about a couple of Benny's you can become a Crown Financial Ministries Financial Coach. Approx $200 as I recall. After you finish the program you will be a "certified" Crown Financial Coach. http://www.crown.org/ForChurch/Solutions/MMCoaching/MMCoachTraining.aspx

Crown is a Christian based financial orginization w teachings similar to Ramsey but better from the standpoint that they do not promote cutting up your CC's like Ramsey does but they do teach the "pitfalls" and proper use of CC's and general Debt. Alot more proffessional too (Ramsey can get a bit arrogant).

However as a "value add" this is not something you charge clients for as it is intended to be a free ministering service for clients members of the church and the like. Biblical based teaching equal to and in my opinion much better than the Ramsey program (if I understand it correctly).

This is not a CFP level certification but is a base of knowlegde that any CFP understands as well.

Check out Crown's radio program audio files. Listen and see what you think...
http://www.crown.org/Media/

Cheers matie!

 

[J.R.]

We have neighbors in a worse situation. Bought 2 years ago for $410,000 when the real estate market was in a frenzy. Listed it for $440,000 and actually had some bits. Problem is the bank's appraising it now for $380,000 so anyone who wants to buy it needs a chuck of cash down. No takers - on the market over a year. Bank said they bought it "over-valued." Their "invesment" is probably gonna cost 'em around $30,000. Great plan.

For the speculator, buy in a frenzy and hope things plan out.
For the long term investor, buy when the market is crap and sell when it gets higher.

Phoenix had a really bad market in the early to mid 90's. Some people made some good money since then and lost a great deal of money. The real estate cycle at play. The problem is that most of the "would-be" investors say "Let's do this real estate investing thing part-time and make $100,000+ with this new $4,000 Real Estate Investing Course we just got!" 1 year later, bankrupt and pissed off about real estate!!!!!

 

[SME]

Then they say lets sell insurance part time make 100,000+ off the $200 license........

 

[trvlnut]

I pay cash for everything too. I just put it on a credit card that gives me cash back and pay it off the next month. Never carry a balance. Every few days I take my receipts and enter them in my Quicken program. I compare what I've spent to my monthly budget. If it's getting close, I stop spending. Frankly, I think carrying around so much cash isn't wise. What if it's stolen? What if you lose it? Not me. I'll stick with cc and debit cards.

Many people perceive Dave Ramsey as a financial adivisor (with no credentials I might add). I perceive him as a niche player. Tell people how to get out of debt and not go back in to debt and charge them for the advice. I gotta tell ya. It's elementary. I have never carried a balance on a credit card and lived within my means. Rarely have had a car note and if I do it's paid off very quickly (unless I can leverage). It doesn't take a rocket scientist to know that if I spend more than I bring in, I will go in to debt.

The house thing really annoys me too. I have a 5.25% house note. There's no way I'll be paying it off. It's cheap money. I can take the extra I would pay on it and put it in something else that pays at least that. BTW, I don't think I'm in debt if my net worth is positive. If I have the money sitting in the bank to pay off the house, then it's the same as if I paid it off. With one exception, I don't have to borrow it out if I need it.

Anyone that says to NEVER buy permanent life insurance is not only ill-informed, but giving out very bad advice. Every person's situation is different and he has people cancelling their permanent insurance and buying term. Whenever I listen to him I wind up laughing at his ill-conceived advice. Stick with the get out of debt advice and leave it at that Dave.

 

[somarco]

I have a 5.25% house note. There's no way I'll be paying it off. It's cheap money.

Attaboy!

Leverage works to your advantage when you know how to manage money.

It can get you in a world of hurt if you are a fool about money management.

 

[Chris235]

I think you have to understand the audience he is speaking to as well...it's probably not good to talk about "leveraging" debt with the people that call in....that's part of the problem they have. As far as the Term Insurance...it's not a bad plan if you "buy term invest the difference," but if you don't invest anything, then you end up with nothing...and you're right, it's not for everybody.

 

[bluemarlin08]

There are thousands of folks out there that can't handle debt and cc, some can many can't, Ramsey has helped thousands of people with his simple message I have seen in in hundreds of families. Don't agree with everything anyone advises, but he is a true blessing to certain groups of people that are overlooked by the financial planning community.