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Presents for the wife were often jewelry. If the couple died young, there was lots of jewelry in the estate, if they lived very long, the jewelry paid for the later years. One thing in common was that most of the people who did this successfully had sufficient insurance.
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Remember that not all occupations offer a K, this does not mean that they do not offer any pre-tax retirement savings vehicle to its employees. Who could possibly turn that down if they understand it? Just food for thought, not saying anyone is right or wrong for what they contribute in their K. You obviously have only read the basic baby steps and not actually taken his class because Dave tells you in his class to invest in your K as much as your employer will match, then go to the Roth, and then back to your K.
You obviously are more interested in trying to make Ramsey look bad than to actually understand what he is saying. If you are going to critique his plan as some kind of expert, you really should actually study his plan rather than going off the simplified list.
Not really, I got all of that information by listening to podcasts and then watching his videos. For free. He talks about k up to match being first steps all the time. But I agree with Dave — most of these people are so desperate that they need some quick wins to keep up the drudgery of getting out of debt.
Also, 6 mos of unemployment benefits should cover at least 3 mos home expenses, that gives you 9 months. There are some incredibly smart people in the world, it just never ceases to amaze me how many smart people are financially illiterate. I consider these sites to be more in line finacial graduate course and for people who actually have a clue about their finances. Dave has great advice, but it really is finance It is meant to spoon feed some of the very basic ideas to people who let their lifestyle inflation spin forward ahead of their finacial abilities.
I know you are not bashing Dave and probably feel he is generally helping people. When I talk to people about finacial stuff I usually tell them to listen to Dave and get out of debt as the biggest priority they have in life. Once they get that far, I tell them to start the next chapter in your finacial plan and introduce them the better site like yours.
You can disagree with him, but what he says works. At times it felt like we were trying to turn the Titanic using a rowboat, but the more we worked at it, the easier it got. It does work. Whether or not you agree with the specifics, the overall plan of building an emergency fund, getting out of debt, and saving for your future is the core of what both Mr.
Ramsey and Mr. Miller are saying. I think some Dave-lovers have interpreted this as a slam on Dave. His impact is a net positive on the world. My version was for those who want to take it to the next level. I like your blog too, and I know you are not bashing Dave but come on…the guy brought the baby steps to the world and has probably contributed more than anyone one person has in reducing the national debt.
He may live large, but he gives large too.
Kind of like taking the 10 commandments and making small adjustments to them and making them your own 2. Our son recently graduated with 3 majors history, political science and russian — ha! Can you do an article on this? Thanks much. About item 3. The money is indeed not an investment, it is a type of self insurance. People tend to get laid off more when the economy has problems. So if the money is invested then there is a greater likely hood of there being less value when it is actually needed. Curiously enough, I know someone who only keep 3 months liquidity but at the same time has the longest range backup.
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For many years he bought bonds every three months so that now every three months some bonds mature and are rolled over. In a financial crises he would simply stop rolling them over. The way he described it, these bonds are his early retirement if there is never a problem and a temporary retirement if there is a problem. After that, I have a significant distaste for debt. Your twists on some of his steps resonate with me: The ETF bond index alternative to the emergency fund is one.
I love the thought around having kids pay a portion of their college education. This is a glaring understanding gap at his age it may have been true for me as well — The value of money, and the concept of money as the reward for hard work to the benefit of something in society. Baby Step 4: Dave does say to use your employers match on the k, but not to go higher as they can have high fees see your post today about rolling them over to an IRA.
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Good post otherwise. Holy crap…I never realized that the average net worth of sub 35 year olds was that low! Dave Ramnsey is great for folks who have debt problems. He is terrible for investing. I would suggest reading his book instead of flipping open the table of contents and taking notes. Im not defending Dave Ramsey, but it makes you seem like a less credible writer when you dont have your facts straight. Im shooting for the limit for the k, then going to the Roth. You can only put per year into a Roth. GE, I was about to chime-in on the k matching, but I see some fellow Dave listeners already beat that dead horse.
For the rest of the baby steps, Dave has reasoning for each of your concerns. So I recommend reading Total Money Makeover and Financial Peace University, if you can stomach the basic concepts long enough to finish them. As some others have mentioned, Dave is speaking to the masses, which are financially…challenged.
Same goes for the Debt Snowball. Dave acknowledges that paying off the smallest debts first is not the mathematically correct strategy. His position focuses on the psychology of paying off the smallest amount first and gaining momentum to actually continue and finish. I love your website, and I visit at least once a day. Blake…THE Blake? Not knocking the plans, all sounds good. But what aboutfor the peope who really are making it by the skin of their teeth? All bills are just under a month, and I make … and of corse that goes to food… my job does not offer any types of benifits… where is the plan for folks like me?
Did you ever get a reply to your post? I was just curious to see if anything has changed for you or if there was another plan for you to follow? Andew, I think the advice would be that you need to increase your income. Maybe your wife could help out another mom who is working by babysitting a few days a week to earn some money. She could also possibly work a few days or evenings times you are not working and you could watch the baby. I believe there are opportunities out there for you both to contribute to your household income. Now that credit card statements have to show how much would be paid in total and for how long, those credit cards with large balances would be a monthly reminder to stop using credit.
deptumali.ml I happened into this post when googling for Dave Ramsey, emergency funds and money market. I enjoyed your post and agree with most of your points. You actually agree with him completely on that note — invest in k as high as your employer matches. DR suggests investing in mutual funds after that with your remaining percent. I will say that he has high hopes for returns — he estimates the mutual fund returns WAY too high. He also states to stop all retirement contributions while repaying debt.
I disagree completely. In terms of our debt situation, our k matches outweigh our interest on our debts. Again, agree with you on home ownership. We are happy renters and plan on being renters until at least our children go off to college which we will help with but not cover entirely or possibly even retirement. As long as you are living within your means, renting can be a great option long term to avoid home owner repairs while still paying less for rent in 30 years than you would pay for the interest on a conventional mortgage.
Dave made his money in the real estate business both the first time around and the second time after his bankruptcy. Not to mention his millions of followers helped buy that garage that my entire family could live in comfortably. He is definitely a great find for the average Joe American that is sky high in debt due to ignorance and stupidity.