For anyone thinking of taking out a loan

surreal1221 said:
Yeah...uh...going out on a limb here, but perhaps those who follow Ramsey are the same folks who lack additional skills beyond their "primary" source of income, and thus if they were to lose their "primary" source of income they will need the 6-12 months worth of liquid funds to utilize and sustain life. You know, cause they never diversified their professional skill set. Education, formal - legit education, is not necessarily a value to the folks who take financial guidance from a zealot.
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I don't really know anything about Dave Ramsey, but for the average, idiot American, his advice seems pretty sound.

I mean, if you are good at managing money, you wouldn't need that advice in the first place.

Generic advice needs to be, well, generic.
 
drunkenbeagle said:
I don't really know anything about Dave Ramsey, but for the average, idiot American, his advice seems pretty sound.

I mean, if you are good at managing money, you wouldn't need that advice in the first place.

Generic advice needs to be, well, generic.
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I think 90% of it is that he literally preaches his advice.
His schtick is annoying and morons eat it up, and then pronounce him a genius when it comes to money management. Works for the lowest common denominator but when people suggest his BS should be taught in schools that's laughable.
 
drunkenbeagle said:
I don't really know anything about Dave Ramsey, but for the average, idiot American, his advice seems pretty sound.

I mean, if you are good at managing money, you wouldn't need that advice in the first place.

Generic advice needs to be, well, generic.
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It's just as easy and generic to say "pay the highest interest card first" as it is to say "pay the lowest balance off first." This isn't frickin' rocket surgery!
 
mikecweb said:
I think 90% of it is that he literally preaches his advice.
His schtick is annoying and morons eat it up, and then pronounce him a genius when it comes to money management. Works for the lowest common denominator but when people suggest his BS should be taught in schools that's laughable.
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Maybe not his BS, but how banks operate (and screw consumers out of money over time, which is exactly what they do) does need to be taught at some point.
 
mikecweb said:
I think 90% of it is that he literally preaches his advice.
His schtick is annoying and morons eat it up, and then pronounce him a genius when it comes to money management. Works for the lowest common denominator but when people suggest his BS should be taught in schools that's laughable.
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He's the Maury Povich of finance shows.
 
surreal1221 said:
Yeah...uh...going out on a limb here, but perhaps those who follow Ramsey are the same folks who lack additional skills beyond their "primary" source of income, and thus if they were to lose their "primary" source of income they will need the 6-12 months worth of liquid funds to utilize and sustain life. You know, cause they never diversified their professional skill set. Education, formal - legit education, is not necessarily a value to the folks who take financial guidance from a zealot.
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You mean, like airline pilots with an aviation degree?!? ;)
 
I have skills outside of flying, but none that would allow me to immediately make up my current income (which, to be clear, is modest). I know very few who could.
 
drunkenbeagle said:
Maybe not his BS, but how banks operate (and screw consumers out of money over time, which is exactly what they do) does need to be taught at some point.
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I'm not sure that banks "screw people out of money." I always thought they provided a service, and various financial instruments for people, for clearly set fees.

People may not understand how those fees total up from percentage points of interest to dollars, but I've never found a bank "screwing me" out of anything I didn't know I would owe them.
 
jtrain609 said:
I'm not sure that banks "screw people out of money." I always thought they provided a service, and various financial instruments for people, for clearly set fees.

People may not understand how those fees total up from percentage points of interest to dollars, but I've never found a bank "screwing me" out of anything I didn't know I would owe them.
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I'm surprised banks continue to offer services to those that carry microscopic balances and eat up a disproportionate volume of customer service resources.

I'm happy with my bank and there are never any surprises. Of course, I was a good consumer in selecting a regional bank that gives their managers some discretion in financial matters. I can call my branch, they recognize my voice, and they work to provide good service. With $1000 in the bank, they cashed a $3000 check for me last week and I don't have any credit line associated with my account. Bank locally when possible.
 
ATN_Pilot said:
It's just as easy and generic to say "pay the highest interest card first" as it is to say "pay the lowest balance off first." This isn't frickin' rocket surgery!
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Which is what smart people do. He is going off of behavior modification which helps the ones that can't visualize the bills being paid off that way. In his books he talks about rearranging debt based off of interest for people that can do it.
 
Derg said:
Speaking of debt free and wealth, let's just say that I know someone who scrimped and saved in order to put his only child through college. Went "without", clipped coupons and massed a respectable amount of money in order to put their kid through college debt-free.

Kid goes to college for a couple years, blows through the money with catlike quickness without graduating, moves back in the house and is pretty much sweeping concrete at the park.

All the bills are paid, so stress-free and has no edge to "do better".

Just thought I'd throw that out there. Sometimes a little bit of debt is impetus for your kid to get off their ass and achieve in a worthy profession in order to get out of it and a lesson to strive to stay out of it.
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I think what should be done is help a bit but make them work for it as well that way you can help them minimize debt and they learn how to work.
 
Derg said:
Sometimes a little bit of debt is impetus for your kid to get off their ass and achieve in a worthy profession in order to get out of it and a lesson to strive to stay out of it.
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You hit the nail on the head.

When I wanted to take out the loan to finish up my ratings when I was 18, my Dad and I made an agreement that I would assume the duties of paying back the loan once I reached a time limit or a certain income level. Either way, he essentially floated me the first few years of interest payments knowing that at a point, either I was going to be in a position to pay back the loan comfortably, or I would have to put myself in a position to pay it back, like it or not.

So I planned all of my job moves to get myself to a level of income that would support me making those payments. And I ended up getting myself in a spot where I could take over the payments from my father much earlier than planned, and it was a damn good feeling.
 
I'm glad that this thread exists for me to rant. I was scanning the dial and heard Dave Ramsey. I decided I would listen until he gave bad advice.

First caller, dual-income family, no consumer debt, reasonable mortgage with equity.

In their quest to eliminate debt, they ask Ramsey about having co-signed on their mother's car loan.

Mom had marginal credit and needed reliable transportation for her employment. Daughter co-signs loan and mom continues to work and make payments on time for three years. Three years remain on loan, mom is still employed and making her payments.

Ramsey's advice, make mom sell car, eat difference in value versus loan balance, and buy her a $5000 car.

Wow!
 
Pilot Fighter said:
I'm surprised banks continue to offer services to those that carry microscopic balances and eat up a disproportionate volume of customer service resources.
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Retail banks don't make money from balances. Think about it - what can they reasonably make in profit from loans from a $100,000 checking account? A prime borrower might be getting 4 or 5%, but the bank has overhead in marketing and servicing the loan, and still has some default risk. They might make, what, $500/year after all that?

A low-balance account - say an average of $1,000 - might have 5 or 6 overdrafts per year, at $35 each. Plus the ATM card/visa card generates transaction fees, probably worth at least the same. And being a "low balance account," good chance there is a monthly fee, check cashing fee, speaking with a teller fee.

The vast, almost entire share of retail bank profits are from those microscopic balance accounts. The marketing to high dollar customers is mainly to cross sell other services.
 
drunkenbeagle said:
Retail banks don't make money from balances. Think about it - what can they reasonably make in profit from loans from a $100,000 checking account? A prime borrower might be getting 4 or 5%, but the bank has overhead in marketing and servicing the loan, and still has some default risk. They might make, what, $500/year after all that?

A low-balance account - say an average of $1,000 - might have 5 or 6 overdrafts per year, at $35 each. Plus the ATM card/visa card generates transaction fees, probably worth at least the same. And being a "low balance account," good chance there is a monthly fee, check cashing fee, speaking with a teller fee.

The vast, almost entire share of retail bank profits are from those microscopic balance accounts. The marketing to high dollar customers is mainly to cross sell other services.
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Good points.
 
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