Why Dave Ramsey is Wrong

Transcript

00:00:00:07 – 00:00:18:29

Mike

I want to talk a little bit about Dave Ramsey and some advice that I’m hearing from him recently. I want to share with you, like here’s when you should listen to people like Dave Ramsey And then I’m going to share with you. Here’s when you should essentially blow them off first. Let me get something straight. I admire him.

00:00:18:29 – 00:00:43:03

Mike

I love him. I think he’s fantastic. I love how he communicates. He’s got such a wonderful communication style. I love how he ties the Bible into concepts with your money. I mean, I think overall he is build an empire and he is fantastic when he sticks to his knitting. As my mother would say. What is Dave Ramsey famous for?

00:00:43:04 – 00:01:01:23

Mike

Like, what is he really, really good at? Well, the answer is helping get you out of debt. I think that’s the most wonderful service. That is fantastic. I love him when he talks about that. I love when he helps people do that. You know why? Because that’s what he knows. That’s what he understands. That’s what is really, really good at.

00:01:02:04 – 00:01:27:01

Mike

Now, that being said, this is a part that started this whole discussion because I’ve been hearing this over the last few days. I’ve gotten a couple of people asking me about it. I’ve seen some videos of him talking about this. But it all has to do with Dave Ramsey’s investment recommendations. I’m going to share this with you. That generally speaking.

00:01:27:09 – 00:01:49:25

Mike

Maybe you might want to consider another opinion. So why? Let’s talk about what they are. Here’s what he says. First, for mutual funds, you need a growth fund, a growth in income fund, and international funding, like an aggressive growth fund, basically. Growth, growth, growth, growth. It’s once you start getting a bit of money, you start getting in your forties and especially special, you start getting into your fifties.

00:01:50:04 – 00:02:16:06

Mike

You have to start recognizing that retirement for you might be, you know, in the not too distant future. And if you follow Dave’s advice and those four funds, growth, growth and income, aggressive growth and an international if you follow that advice, you need to understand that you are exposing yourself to essentially a 50% loss of your money in a really bad market environment.

00:02:16:08 – 00:02:37:15

Mike

So let’s say you’re 58 years old and you’re thinking to yourself, Hey, I’ve saved $1,000,000 and I’m going to retire in a couple of years and I’m following Dave’s advice and oh look, I’m getting growth when times are good. Oh, no. The market decided it wasn’t going to cooperate with your little plan in the stock market decides up.

00:02:37:15 – 00:02:57:20

Mike

We’re going to have a 2008 environment. We’re going to just, just crash and burn for, for a period of time, or we’re going to have a 2000 2001 2002 environment where we just crash and burn over three years. And the stock market’s down 50%. You lose 50%. Next thing you know, you say, Okay, I had a million. I was going to retire in two years.

00:02:58:10 – 00:03:18:26

Mike

Now you got 500,000. And guess what’s not going to happen anymore. You’re not going to be retiring in two years. Dave, all the time, talk about this is how I invest my money. That’s great. He’s got tens of millions, if not hundreds of millions of dollars. Right. He can lose half his money. Who cares? He’s never going to use it all anyway.

00:03:19:12 – 00:03:41:02

Mike

Is that you? Is that you? I mean, if that’s you to great, then follow his advice. Who cares? But if you’re like most people, when you get close to retirement, you can’t be following that advice. You have to have a more sophisticated approach than for mutual funds. Listen to people like Dave Ramsey on stuff. He’s good at getting out of debt.

00:03:41:11 – 00:04:04:22

Mike

But when it comes time to other areas like how should you invest your money, especially if you’re getting close to retirement, if you’re in retirement. Boy, avoid his advice like the plague at that point because that’s the kind of advice that will bankrupt you if the markets decide they don’t want to cooperate. I think he’s really, really good at getting people out of debt.

00:04:05:24 – 00:04:28:14

Mike

He’s really, really bad at telling someone who is nearing retirement or in retirement how to invest money. That’s our message this week, folks. Hope you enjoyed it. Feel free to subscribe. Share with your friends, neighbors, countrymen. And with that, remember, you deserve a fantastic retirement. Let’s make great financial decisions. So that you can enjoy the retirement that you truly deserve.

00:04:28:15 – 00:04:29:08

Mike

See you next time.

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