The Dave Ramsey plan for getting yourself into financial freedom.

AlmostRP · 2014-02-25T19:48:10+00:00

I started it over two years ago and I'm very close to eliminating Sallie Mae, my last black hole.

His program is simple, straight forward, and honest. I'm sure you'll see some people around here gripe and complain about it, that there are better ways to do it, blah blah blah. It works.

There is absolutely no reason to go into debt. Ramsey will concede that a mortgage is okay, but even then, get that shit paid quick.

mykungfuisbetter · 2014-02-25T21:23:24+00:00

Hey, thanks for posting something financial! +1 We need more of these, Being RedPill is definitely about having your financial house in order.

Can you explain more about no good debt? I tend to disagree here, esp around mortgage. Of course, you should NOT go mortgage a fancy-ass mansion even if you can afford it. And maybe it makes sense for your personal property to pay off the debt.

But allow me to present an alternate theory. Use other people's money to finance a passive income stream. If you go buy a rental property, the financials can be very positive and I think that has the capability to be very good debt!

There is no other investment that I know of that: 1) You only put down a fraction of what it is worth, banks pay the rest 2) You can get other people to pay your debt payments every month, while retaining ownership of the actual item 3) It depreciates on paper (good for taxes), while appreciating in real life (most times) 4) Can make you money every month while doing 1-3 above

Let me give you an example and my reasoning: For instance, I own a 4 unit apartment building. That rental unit produces $1000 a month positive cashflow after all debts, maintenance, etc is paid off, while at the same time I get to depreciate the building (great tax benefits), write off a bunch of related expenses to reduce my tax burden. I only put 5% down...and that one debt has made me a shit load of money over the last 10 years. I love passive income, because I pay for professional management and don't generally have to worry about it.

So, why is this bad debt? Instead of paying down this debt, I prefer to save up money for new down payments, I can go and buy another 2-3 properties that each pay me $1000 each in addition to completely servicing their debt load. In fact, I just bought my second one this summer... :-)

Anyway, that's my theory gentlemen, for what it is worth. Don't be scared of debt, it can be a great tool.

Archwinger · 2014-02-25T21:39:10+00:00

Dave Ramsey is an icon who tells people the obvious in an easily digestible way. At its core, it's nothing novel: pay off your debts fast to avoid wasting money on interest, pay off your highest interest rates first, sacrifice other things in your life and eat beans and rice to get that done fast, because debt sucks ass. But people can't hear this enough.

Once you're financially free (and only then), the best policy with money is to enjoy it. Have a rainy day savings, of course, but being a budget-driven miser is no way to live. Enjoyment is what money is for. Be generous, even lavish, with your one-time purchases, but stingy with recurring expenses. But live within your means.

ajswdf · 2014-02-25T20:50:11+00:00

I haven't read any of his work, but from what I've heard he gives very, very low level advice.

For example, his advice to tackle the lowest amount of debt first. In reality the best strategy is to pay off the highest interest debt first.

Ymeynotu · 2014-02-25T21:42:18+00:00

Tom Leykis who has been red pill since before redpill has a call in internet talk show that features money Mondays.

It's worth a listen to those trying to be pro.

[deleted] · 2014-02-25T19:58:15+00:00

I started about six months ago. It takes a lot of intensity to keep it going but as a single guy I've often told women I don't have time/money for them because I paid off my debt and am saving for a house. This leads to them wanting to get into my life, have sex and a little piece of that tranquility I have that they aren't mature enough to obtain for themselves.

[deleted] · 2014-02-26T00:24:40+00:00

[permanently deleted]

Florist_Gump · 2014-02-25T22:40:46+00:00

Dave Ramsey's basic advice is rock solid. I think his philosophy starts to crumble on the edge cases (when his religion runs up against his fiscal policies, for example) but overall he is worth a read.

Ramen_N00Bdlz · 2014-02-25T22:49:51+00:00

Accounting graduate student here.

My biggest advice is to let someone else (with professional skills) take a look at your finances and suggest changes. A vast majority of the time, it is worth your while.

chucklo7 · 2014-02-26T15:20:37+00:00

Dave's personal finance advice is AWESOME. I wish more people knew about it.

Dave's investing advice is AWFUL. Ignore that part, please.

rumcarmex · 2014-02-25T19:58:58+00:00

You know dave went bankrupt and only has money now because fools buy his program.

brons104 · 2014-02-25T21:02:18+00:00

I took his Financial Peace University just after finishing college. It pointed out a lot of mistakes I made, but helped me avoid so many more. Now I have two fully paid vehicles, a positive in my bank account, and a plan to pay my mortgage down 10 years early and save about $10,000 in interest. Worth every moment of the class.

DesertSeahawk · 2014-02-26T00:41:31+00:00

His plan works. It's rough, but it works. Personally, I got rid of over $65k in debt using his system. Best $100 I've ever spent.

bigyellowtwinki · 2014-02-26T02:20:44+00:00

I recommend Ramit Sethi's book and the WallStreetPlayboys.com blog.

mo_dingo · 2014-02-27T18:09:06+00:00

What is his advice on mortgage debt? I assume he treats it like any other debt?

IMO, any debt at an APR of 5% or lower is free money, due to inflation. Getting a mortgage at 15% is not smart, but at current interest rates, it's a no brainer.

Then again, the only debt I have is my $50k mortgage @ 3.5% and I have a lot of savings/investments because I hate spending money on non-assets.

Title	The Dave Ramsey plan for getting yourself into financial freedom.
Author	Demonspawn
Upvotes	77
Comments	57
Date	February 25, 2014 6:40 PM UTC (12 years ago)
Subreddit	Posted in /r/TheRedPill
Original Link	https://old.reddit.com/r/TheRedPill/comments/1ywv11/the_dave_ramsey_plan_for_getting_yourself_into/
Archive Link	https://theredarchive.com/r/TheRedPill/the-dave-ramsey-plan-for-getting-yourself-into.11858 https://theredarchive.com/post/11858

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