Great Dave Ramsey article

http://www.psmag.com/business-economics/prophet-dave-ramsey-personal-finance-67269/

I loved this take down of Ramsey, whose advice (that he charges for) truly can be summarized as "don't ever borrow and pay all debt" (I always want to ask if they let people sign up for the class with a credit card). Seriously, this advice is trite at best and counterproductive at worst. Don't use credit cards to eat out every night? Fine. Don't borrow to send your kid to a good school? Come on.

My real pet peeve is his "always pay your smallest debt first" advice. That is insane. You should make your minimum payments and then, if you have more, throw it all toward the debt with the highest interest rate. I can't begin to imagine the tens of thousands of dollars people waste each year following Ramsey's advice on this.

 

He also assumes 12 percent returns, in perpetuity and within any time frame, on investments.

Printit, you being a lawyer, I'm not suprised that you find his advice about not sending your child to a good school hits home. You know how important that credential can be. We've had some good rows about it on this site, which seems to as a whole lean toward the Ramsey model.

This advice won't sell books, but mine is this: Every person's situation is different, based upon that person's values and goals. Proceed accordingly.

 

Dave Ramsey's value is that he can help dumb people be less dumb. But if you aren't a person who racks up massive credit-card debt at the mall, you're already far beyond his knowledge base.

 

This. I was in some trouble and had a bad credit score when my car died. I had to get a worse car than I wanted because I couldn't afford anything better. I didn't follow Ramsey, but I did what he advocates: I lived in what I made, and I paid off my smallest balances first. Of course, all my credit cards were at like the 29.99 rate that they up people to when they miss a payment.

But paying off those smaller cards made me feel like I was accomplishing something. Every few months, I had one fewer payment to make. And when people have spent their entire adult life in debt, those little victories can be monumental to them.

Three years later, I bought a house. I now pay off my credit cards every month and use one card for everything because I get cash back.

 

This. If you are capable of being completely unemotional about money and paying the highest-interest off first, then you probably aren't in bad enough position to need Ramsay's advice.

 

I think big picture, he does a ton more good than harm. Sure, you can say he aims for some low-hanging fruit, at least when it comes to convincing people that putting a restaurant meal or a frivilous vacation on a credit card you have no prayer of paying off at the end of the month is a bad idea.

But my kids won't be leaving for college before going through one of the classes for teenagers that he puts on.

 

I have a friend who calls him the Thomas Kincaid of financial advisors (Oops, sorry AP...advisers). It doesn't make any sense, but it still makes me laugh every time.