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HOT! Dave Ramsey being asked how to get rich

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James Klymus

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How he continues to believe that all debt is irredeemable is beyond me.

I know so so so many multimillionaires that couldn't have done a half as well as they have without debt. I use it to carry large purchase orders routinely. I don't want to be limited in how much I can carry for a customer. That is what allows me to play with big a$$ customers.

With no debt, I would have started out selling a 50-100k at a time. With debt, I can sell this stuff by the traincar as often as the customer request.

Years ago, we also sold industrial capacitors for power factor leveling to companies running big electric motors. They would save them money in about 2-3 years... They would last about 20... Slam dunk right? Nope, not one customer until I found a bank to underwrite these capicators. Spread out over a 15 year payment plan they saved money in the first month and also improved the lifespan of their equipment. I only ever sold those with a payment plan. Never for cash.

Debt is awesome as far as I'm concerned. Especially with interest rates as low as they are and the dollar on the way down. Just use it wisely and don't personally consume anything you can't easily afford.

I'm shocked he hasn't admitted the gaping holes in the "zero debt ever" thing. Every big company in the world has payables on their books.

I agree with you, but his audience is average Americans. The idea of entrepreneurship is hard to sell, but the idea of putting you money in the magical mutual funds and IRAs is a much more appealing idea to the masses. Let others do the work with my money. It's also the reason why people stay stuck where they are, or worse, lose it all during a crash.

I think Dave has a lot of good advice, but I also understand who his audience is, and you and I arent in it.
 
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MJ DeMarco

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@WJK - nothing to add on this thread (I think DR has good advice outside of our entrepreneurial/Fastlane bubble) but I just wanted to thank you for adding your perspective with your extensive RE experience. Much appreciated. :thumbsup: :fistbump:
 

WJK

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I agree with you, but his audience is average Americans. The idea of entrepreneurship is hard to sell, but the idea of putting you money in the magical mutual funds and IRAs is a much more appealing idea to the masses. Let others do the work with my money. It's also the reason why people stay stuck where they are, or worse, lose it all during a crash.

I think Dave has a lot of good advice, but I also understand who his audience is, and you and I arent in it.
True, but I think that the reason that people are pushed to put their money into mutual funds and IRAs is more cynical than most people realize. It's the old 1% fee -- money managers take 1% per year for their management fees. Their fees are automatically adjusted. As the person contributes to their retirement funds and the value of the assets goes up, so do the management fees -- year by year. Scary uh? So, if you were giving the average person advice on how to manage their money, and you were their money manager who collected that 1% fee, what would you tell them????
 

Kid

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This thread got serious.
So to lighten it up a bit i'll say:
- I have problem with my money- how to invest them?
- Don't. Give em all to me - Problem solved!
 

daniel_m

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Nobody is right 100% of the time. Dave also thinks BTC and crypto is B.S. and that there is absolutely no situation in which using a credit card is acceptable. Most of us disagree with those points.

In general his advice is doing far more good than harm. That's why he is where he is today.
 

WJK

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This makes me not want to read any of his books. Yikes.
What part of what he said put you off? Is it the part that wealth takes time and the deliberate act of creating a good character? Was it because he pointed out that you must live counter to most other people around you. Tell me -- what caused your "Yikes" comment?
 

MitchC

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Here we have a video of a kid getting rich being told by Dave Ramsey to stop getting rich and go to college
 

davidv9kids

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For most people, Dave Ramsey is correct ... get out of debt, stay out of debt (what he means is: don't spend more than you make), and save.

Most people wouldn't make it in business. Most people won't make high incomes. For those people, Dave Ramsey's advice is exactly what they need.
Fair assessment and comment. Not everyone is,will be or wants to be an entrepreneur.
 

MJ DeMarco

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Teach enough people to just survive financially in mediocrity, and you will thrive fantastically in luxury.
 

davidv9kids

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MJ DeMarco" data-source="post: 975436" class="bbCodeBlock bbCodeBlock--expandable bbCodeBlock--quote js-expandWatch">

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Teach enough people to just survive financially in mediocrity, and you will thrive fantastically in luxury.
It's good for some isn't it. 5m hit and still smiling
 
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Ivan Koretskyy

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I hate the vague talk that people eat this shit up.

“Live a life but be wise about it"
“Do what you’re doing now, gather knowledge”
“Be very intentional with your money”
“That will lead you to generosity”

Oh for real? I knew this shit when I was 18 years old how is this ground breaking?

And that muscle analogy for get rich quick? Yikes.
 

door123

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Teach enough people to just survive financially in mediocrity, and you will thrive fantastically in luxury.
If I was a 9-5er, I would definitely listen to dave. He's a breath of fresh air for the 9-5er audience.
 

thechosen1

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If I was a 9-5er, I would definitely listen to dave. He's a breath of fresh air for the 9-5er audience.
there's really nothing new to learn from him unless you're so sidewalk that you're basically sitting on the ground.

There's a certain type of person who needs to listen to Dave Ramsey, but most of them won't be on this forum.

There's a girl I know who's 30 years old, has been in college for about a decade, changing majors, getting advanced degrees, switching masters programs, etc. She just told my friends and I that she had to take a $1000 loan to pay her rent on her luxury hi rise apartment in downtown. No joke.

Dave Ramsey is for her. But she will never listen to him!
 

hellolin

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I think that's where his don't use debt mentality came from. He used too much leverage on properties, resulting in him becoming bankrupt. I disagree with his stance on debt. Debt is good if it creates wealth and pays for itself with time. It's bad if used for consumption. But I find it very ironic that he makes using debt for a house an exception. So it's ok to use debt for an asset that's practically being used for consumption yet everything else is bad? All because "It's your biggest asset". Since when did someone's personal residence ever made someone a millionaire / billionaire? It wouldn't make any sense to call it your biggest asset when the 1%'s biggest asset is their business.
"He used too much leverage on properties when it was not cool to do so unlike right before 2008, resulting in him becoming bankrupt. "

Fixed for ya, nowadays that's what everyone is doing and no one ended up like him. "Back then when bailouts ain't the flavor of the month".
 

WJK

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"He used too much leverage on properties when it was not cool to do so unlike right before 2008, resulting in him becoming bankrupt. "

Fixed for ya, nowadays that's what everyone is doing and no one ended up like him. "Back then when bailouts ain't the flavor of the month".
I don't know. I've seen the RE market meltdown more than once over the years. And it's a cycle that happens regularly. I'm seeing people doing what they did during the end of the 1970s, again the 1980s, and then again prior to 2007/2008. It all makes me head shy.
 

thechosen1

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I don't know. I've seen the RE market meltdown more than once over the years. And it's a cycle that happens regularly. I'm seeing people doing what they did during the end of the 1970s, again the 1980s, and then again prior to 2007/2008. It all makes me head shy.
All of the problems seem to be when people leverage up on properties they intend to sell, instead of getting long term debt on properties that produce cash flow.

Notes that are due, the need to sell by a date, balloon payments, those are all things that screw investors.

If you avoid those you have way less risk, it would seem.

Investing > speculation
 

WJK

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So not Dave, clearly.

What characters are a good source of financial advice?
Actually, Dave does have some good advice. Yes, you need to:

Save your money & have a rainy day fund
Pay off your debt
Be mindful about how you live and spend your money
Take care of your retirement needs

Look to other sources for how you make your living and your fortune.
 

WJK

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All of the problems seem to be when people leverage up on properties they intend to sell, instead of getting long term debt on properties that produce cash flow.

Notes that are due, the need to sell by a date, balloon payments, those are all things that screw investors.

If you avoid those you have way less risk, it would seem.

Investing > speculation
Even those who thought they were being smart went down too in the past. The market went sideways in a heartbeat. A bunch of my friends ended up in bankruptcy court with their hats in their hands. And then they started over again when the market started to come back.

Apartment buildings & commercial loans can have "loan calls" when the market value of the property falls. I know this personally. I consulted for banks during some of those dark days. I helped them with their compliance issues for their major asset portfolios.
 

ZackSprague

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I'd rather listen to MJ DeMarco and his books than to listen to someone who doesn't actually preach what he teaches.

Actually had a conversation with a high school friend of mine and his dad was talking about Dave Ramsey... I completely ignored what he said.
 
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thechosen1

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Even those who thought they were being smart went down too in the past. The market went sideways in a heartbeat. A bunch of my friends ended up in bankruptcy court with their hats in their hands. And then they started over again when the market started to come back.

Apartment buildings & commercial loans can have "loan calls" when the market value of the property falls. I know this personally. I consulted for banks during some of those dark days. I helped them with their compliance issues for their major asset portfolios.
Yeah I don’t understand this! Is it possible to get a loan without that? Doesn’t make any sense - because if you are making your payments on time, why does the “value” of the property matter?

Seems like a scam by the bank. They take your property at the bottom of the market.

They do the same thing with commercial business loans - they call them “covenants” and will actually control how much revenue you must earn and how profitable you must be. Kind of insane when you’ve made every payment on time for 15 years but they want to call your loan when the whole country is in a recession... that’s when you leave them. Usually some very drawn out explanation is all they want though.
 

WJK

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I'd rather listen to MJ DeMarco and his books than to listen to someone who doesn't actually preach what he teaches.

Actually had a conversation with a high school friend of mine and his dad was talking about Dave Ramsey... I completely ignored what he said.
You can listen to a bunch of different people. You can take their ideas and vet them individually. Are you telling me that everything Dave Ramsey says is bad? How can it be that black and white? Be specific. What do you think he's done differently from his advice? Yes, when he was young, he did it all wrong. Yes, he just overpriced his house and sold it for less. How does that negate everything he's saying? Is it bad to pay off your debts? Is it bad to be a good steward of your money? Yes, MJ has great ideas. I follow a lot of what he presents and I respect what he has to say. BUT, I listen and adopt a lot of different ideas from different sources.
 

WJK

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Yeah I don’t understand this! Is it possible to get a loan without that? Doesn’t make any sense - because if you are making your payments on time, why does the “value” of the property matter?

Seems like a scam by the bank. They take your property at the bottom of the market.

They do the same thing with commercial business loans - they call them “covenants” and will actually control how much revenue you must earn and how profitable you must be. Kind of insane when you’ve made every payment on time for 15 years but they want to call your loan when the whole country is in a recession... that’s when you leave them. Usually some very drawn out explanation is all they want though.
It works like this:

Say you buy a property for $100,000 and you obtain an 80% loan.

The market value of the property falls to $80,000.

The bank will do an internal appraisal of your property on a regular basis. They are only allowed to have an 80% loan on that property under the Federal banking rules. They must either get you to pay down the loan to $64,000 or they must put up reserves for that difference. So, they send you a letter demanding that you pay that loan down to $64,000 which totals $16,000 in pay down money on the loan. If you fail to make that payment, then they foreclose on your property.

Single-family loans and small units, 2-4 units, have different rules. They are not triggered by the same rules.

This is not a scam. It is simply the way that the banking system works.
 

ZackSprague

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Not everything he has to say is bad, I am not going to disregard that. In my own personal preference, I have decided to follow people who practice what they preach. Just a personal opinion. So sorry if have offended you WJK.

I don't think adopting different ideas from different people is bad either. I just want to focus on one author and their ideas for now. If I read and adopt too many ideas, I will definitely get into information overload or not practice all of the ideas I have read or have yet to adopt.
 

WJK

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Not everything he has to say is bad, I am not going to disregard that. In my own personal preference, I have decided to follow people who practice what they preach. Just a personal opinion. So sorry if have offended you WJK.

I don't think adopting different ideas from different people is bad either. I just want to focus on one author and their ideas for now. If I read and adopt too many ideas, I will definitely get into information overload or not practice all of the ideas I have read or have yet to adopt.
You didn't offend me. I listen to a whole host of different ideas all the time. I even learn from the guy down the block who does it all wrong. I don't believe I'll be overtaken by "overload". And I don't try to practice ALL the ideas I come across. I believe I am smart and old enough to pick and choose which one I can use to my benefit. Sometimes I morph a couple of ideas into a new solution or business idea -- like the business I'm starting this coming spring. Sometimes I think of ideas I ran across years ago and I put them into my current life. I was trying to say to open your mind and your heart. You have an unlimited capacity to vet new ideas.
 

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