I think that he does a lot more good getting the lower end lifted than harm from keeping the middle down.

I agree with his principles plus where and how he’s getting coming to his conclusions, but I’m not on board for his total anti-credit card stance. Credit cards are neither morally wrong nor stupid – sadly, people are.

As someone living in Australia we’ve found that we have to modify Dave’s baby steps because of some local factors. For example, the cost of living is so much higher here than many of the callers to Dave Ramsey show. And, the cost of owning a home is enormous compared to the US – house prices went up during the GFC instead of crashing.

First of all, congrats on getting out of debt. Second of all, I like your goal focused mentality.

Last, you bring up a great point. No matter if a financial adviser is a ELP or not, it’s always good to get a second opinion. You should try going to one ELP and one fee only CFP. It will be good to get both perspectives.

I have applied Dave Ramsey’s principles for 3 years now and will continue to do so. In the past 3 years I have paid off $65K on all credit cards and my car. Now I am paying down $54K in student loans. My company matches 5.5% in 401K, but I don’t know what that looks like over the course of a year. Maybe one day I will do the math, but my goal is to live a debt free life.

When I get to the investment step I will consult an ELP, but if the ELP is not well versed in the principles and persepctive that Dave has I will consider going somewhere else. It would be more important for me to go to someone is is familiar with the perspective then someone who has been endorsed.

This ELP brought out a folder of American Fund investments and that’s the only thing he advised in terms of ‘financial planning’ (i.e. purchase some of these mutual funds that he is peddling for sales fees that he earns upfront).

I was disappointed and surprised Dave would go this route as opposed to fee-based CFP or CPAs, who do not make commissions by suggesting the investments they peddle, which obviously has a bias built in.

I’m going to instead see a fee-only CFP who doesn’t sell any securities, and get an updated investment strategy. Buying mutuals at a a sales load of 5.75% isn’t a plan for anyone but the ELP to make some commissions and Ramsey for getting his share from the ELP.

No thanks, Dave. Your investment advice sucks. Never, ever put your financial future in the hands of someone who makes a living selling you very specific investment products.

His investment advice borders on ill-informed to catastrophically bad. . here are a few examples:
1. Full investment in the stock market regardless of your age. I am sure there many retirees who are sorry they followed this advice. I can remember listening in 2007/8 and he advised a call to take her pension in a lump sum (around 500K) and invest it ALL into the stock market so she could “make 12%”. Wow, If she followed his advice she is down over half counting her withdrawals to live on.
2. 12% – yeah, has been beaten around here, but still true. This is a totally unrealistic number to use but many newbies hear it and believe it and make very bad decisions because of it. Peter Lynch who ran Magellan during its great run (15% percent a year for almost a decade) wrote in his book that the average Magellan investor still only made 7% or so because of timing, withdrawals, taxes, etc.
3. Prepaid tuition is bad. No, it isn’t. He will say that tuition increases have averaged 7% a year but you can get 12% a year in the market (no you can’t). He doesn’t factor in ANY risk, like the 12% is guaranteed. Well, if you followed his advice in the last 10 years with your kid’s tuition you are at best even, at worst down 40%.
4. Real estate is a “great investment”. No, it isn’t. He is a real estate fanboy and touts his real estate ELPs . . .real estate has appreciated at about the same as the rate of inflation for the last hundred years and he must know this, but continues to push how great an investment it is. . well, many in the US (can you say FL, CA, AZ, NV, MI) would greatly disagree.

So, net/net, he is a salesman. Don’t forget that. This doesn’t make him a bad guy at all (I am in sales) but you must keep this in mind. He is selling a system that has many great aspects (get out of debt, all debt asap) and many bad aspects (his investment advice, love of real estate, etc). He is in this business to make money – again, nothing wrong with that at all. People make the mistake of thinking he is in “ministry” – people will call all the time and thank him for his “ministry”. He does not have a ministry, he has a private business and wants to sell things (most of which are good for you). He makes no details of his business public including charity or philanthropy. He talks as though he gives a great deal of money away and how it is important to do it but never provides any proof of it.

So, IMO, take his advice on debt, disregard his advice on real estate, and temper his advice on investing.

I have to say that everything I learned was very touching. After the first class I immediately went home and cut up my credit cards and then I began to devour the book.

I can’t say that I’m still using his methods, but my parents still are and there getting more and more out of debt every month thanks to the “snowball effect”.
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