Why I Don't Follow Dave Ramsey Anymore

Why I Don't Follow Dave Ramsey Anymore

i followed dave ramsey for several years
i've been to his studio i've met him twice
and today we're talking about why i don't follow him anymore number one is a
credit score dave ramsey believes that you should have a credit score of
zero because you can just cash flow everything and you can do manual
iterating for a house and all that now if you're a millionaire and you can
afford to pay cash for every single thing in your life
then i can understand that but the average american is not like that we
were not like that we had to get a mortgage
and so our credit score cost us interest on our mortgage and we had to
have a higher interest rate because of our credit when we bought a house last
year my credit was right around 739 740 right on that brink of that next
credit bracket so that ended up costing us a lot of money
because when we paid off all my debt i had zero debt whatsoever
i didn't have credit cards i didn't have a car loan i didn't have anything at all
so my credit was just dropping dropping dropping really fast
and then when we decided to start building it up it was
already a little late and that costs us money in our mortgage rates so having a
credit score is really important contrary to dave ramsey's beliefs
and i think that it's important to have a good balance of you know not taking on
things just to build your credit and so many people will be like well i want
this because of the credit and this and that i'm
not that liberal with it but i really do think that credit is important having a
good credit score is important if you do want to increase your credit
score i do have a video that i'll have linked down below in the description on
how to increase your credit score number two is a thousand dollar
emergency fund i really really don't believe in this i think that you should
have at least a minimum of one month worth of
expenses let's be honest today the times that
everything that's happened in the world this year in 2020
it has shown that everything can just fall apart in a blink of an eye we had a
twenty thousand dollar pay cut and it was real you guys saw saw the
videos of how we dealt with our twenty thousand dollar pay cut because
of the pandemic and everything that's happened
so i think a minimum of a one month's worth of expenses
and let's be honest what emergency is less than a thousand dollars
most emergencies are gonna be more than a thousand dollars or you could just
cash flow it so having that emergency fund at least
one month worth of expensive and then building it up from there
that's going to be ideal and that's what i always encourage people to do
number three is investing while paying off debt now
this one guys especially your 401k match this one is big for me
i really really really believe that you should not stop your 401k match you
should always be maxing that out minimum guys
that's free money that is money on the table from your employer
and a perk a benefit of working for that company
so the very minimum is do your employer match for your 401k with your 401k
i would really recommend checking out bloom there down below in the
description box of a full video where i went over my personal
401k and they'll help you to evaluate if you're going to be hitting your goals
if you're paying too much in fees if you're too high in stocks or bonds or
whatever it is they have a free analyzer so check that out down below in the
description they're awesome and it's a free free free
analyzer on your 401k so check out bloom and it's
it's amazing but having your 401k match that's huge
and also he doesn't recommend investing until you have three to six months of
emergency fund guys that is a long time if you're
waiting and stopping your 401k match you're stopping your investment stopping
all of that until you've paid up all of your debt
you have your big three to six month emergency fund that
could be three five ten years some people
that's a lot of money that you're leaving on the table for your
investments i really really really don't think that
that's going to be the best option for most people
now some things to consider i really think that you need to look at your
financial state are you able to pay your bills are you
able to keep your head above water if you're not able to keep your head
above water absolutely stop your investments and i want you to get ahead
on your bills get get comfortable pay all your
minimums all of that then there's some other things to
consider what's the interest rate on your loans what is it is it
you know above seven percent is it really low interest rates
different things like that there's a lot to consider when you're going to be
paying off debt or investing or you know a mix of both you can do both
you can have more than one financial goal at the same time
i have a video on it should you invest or pay off debt and some questions to
ask yourself to how to evaluate the situation i'll have that
link down below for you guys in the description box as well
go check out the description there's so many resources and everything down below
in the description but it's a big decision on
investing versus paying off debt but i really don't believe
waiting until you have six months emergency fund to start investing
no no no no no no the compound interest that you're missing
through those years that's huge guys if you're finding value in this video i'd
love for you to hit the like button it really helps with the youtube
algorithm also join the freedom in a budget family
subscribe to the channel hit the bell notification so you get notified every
time i upload number four is only investing in growth mutual funds
now a couple things with this first there's not a lot of diversification
in this what if one of those big companies goes under whatever
you know we're seeing big growth in a lot of these companies which is great
now but what happens if something happens to
tesla what happens if something happens at amazon all of these
it's scary when you're looking at these big growth companies
i like diversification i like you know having some eggs in multiple baskets at
once so that's huge with diversification also
costs these growth mutual funds are expensive
the fees are very high when you're looking at it one percent it
may not seem like a lot it may not seem like they're not now but
as your portfolio grows that's going to add up big over time i
personally recommend low cost index fund you can get easy
low-cost energetics with vanguard those types of places so
it's really not hard to get started investing and just do a simple index
fund that way you're very diversified they're low cost
they're easy and it just makes more sense along with that dave always talks
about having a 12 return that most mutual
funds most investments are going to be 12
return that's simply not the case i like to have a
good healthy 7 7 is the where i like to project our investments and if
it's higher then that's great if it's lower then it's okay it's gonna
balance out but seven percent over the long run is a lot more realistic than
twelve percent returns even if we're in a bull market it may be really high
returns but over the long run when you're
looking at 30 40 years it's gonna be more on average of seven
percent than 12 percent so i don't know where he gets the 12
from but honestly guys seven percent 67 is a lot more realistic number five is
we use credit cards yep i said it we use credit card the way
that i think of credit cards is like alcohol so stay with me
with alcohol some people can have a drink of alcohol and it'd be perfectly
fine they go they shop they're they drink
then they're sober up and they're fine that's like credit cards you go you you
swipe your credit card you pay for things you pay them off you earn the
points you earn the the miles whatever maybe and it's fine
other people can have one drink of alcohol and then that
one drink leads to ten leads to them puking leads to potential
dui it gets ugly it gets bad it gets dangerous same thing with credit
cards one swipe two swipes next thing you know
you're just charging charge and charge and charging
you get a credit card you're building your credit and then next thing you know
you've racked up you've maxed out your cards and you're in deep debt you're in
deep trouble you're paying 20 something percent
interest on them and it's ugly so you have to know how you handle them
you have to know what's best for you so if you are a no credit card family
that's fine if you use credit cards to earn rewards
earn cashback earn points that's fine pay them off every single
month never hold a credit card balance no matter what side you're on whatever
side of credit cards or not credit cards whatever it is do not pay
interest on your credit cards pay them off every single month like without
saying that is number one you should never hold
balance you never want to be paying 20 something percent interest on something
that is bonkers to me so if you use credit cards
pay them off we use credit cards it is what it is if
you want to get two free stocks sign up for weeble there'll be a link down below
in the description box and when you deposit 100
into your account you get two free stocks one of them can be valued up to
fourteen hundred dollars so go check them out
if you wanna keep this conversation going and learning about how we have
built up to earn seven different income
streams and passive income how we're able to
diversify our income check out this video here and if you
want to know dave ramsey versus the fire movement check out this video here

dave ramsey

As found on YouTube

Looking to see what kind of mortgage you can get? Click here to see

Leave a reply

Your email address will not be published. Required fields are marked *