"If you can't buy something with cash, don't buy it. Debt is debt." - Dave Ramsey

[CopiousX]

I think he is talking about consumer loans in clothes, electronics, bad cars, etc. cause most of his callers call in for stupid stufflike this.



if you look at Dave’s portfolio you will probably find leveraged stocks, cash advances on book sales, mortgaged rental properties, and some bussiness credit lines all over the place

 

[winb83]

"If you can't buy something with cash, don't buy it. Debt is debt. It will hurt you, no matter what the interest rate is. Your life matters TOO MUCH to give your money away to payments. You deserve better than that, and the first step to getting there is to STOP taking on more debt."

Do you agree?

If you are going into debt to buy depreciating items that don't earn you any money he's spot on.

If you're using debt as a tool to get assets that generate income he's wrong.

Taking out a loan to start a business, acquire rental property, Dave Ramsey isn't someone you look to for that sort of info.

Love his show clips on YouTube just to hear the wild situations people get themselves into.

 

[winb83]

You can buy a house with cash, a young working couple could easily do it.

Say you and the wife start saving $2000/month. In 10 years you have $240k which is enough in most areas, adjust for places like NY and Cali

The issue is if you have that type of money there are better uses for it than buying a home. You can borrow someone else's money at a low interest rate and put your money to work for you. Your money can work harder for you than you ever can. We live in a capitalist society where if you have capital it's easy to make more money with it.

Adjusted for inflation and interest you'd still come out ahead investing that money over a decade rather than saving it in a bank account to buy a house cash. At 8% return average annually that $2000 a month becomes $340K in a decade. At 10 years in a bank it's barely above $240K. That's not including the lost money you had to pay while renting so you could save.

Let's put you at $700 a month rent over that entire time. You're talking about a $184K swing because you lost the $100K in growth for the savings instead of investing it and the $84K built you no equity in anything. Borrow the money and as you pay it back you build equity and can deduct the interest on your taxes.

 

[Airtrack360]

Yall are so simple. He's obviously talking about unnecessary spending. But go ahead and make yourself feel better thinking you know more about finances than a financial expert...

 

[CashmereThoughts]

I always felt like that. If I dont have the cash for it I dont need it right now. And this is exactly why I have no credit card accounts on my credit and its fukking me over. My credit could be a lot higher if I had 1 card. Crazy how not having a credit card can hurt your credit

What you waiting for?

 

[macadomusic]

shyt is impossible to not involve credit in your life as a grown ass man.

 

[JLova]

Bullshyt. If I didn’t buy my house in 11, I would of lost close to a million dollars.

Edit: So no, I don’t agree.

came in to say this. Took out a home equity loan just to put down on new construction a house 2 years ago that is now valued at $3-400k more than I paid for it. House is closing in a week.

I get what he means but I’m sorry, you gotta make your money work for you. Cash is losing its value.

borrowing for investments is OK in my book. Racking up debt for products or things that don’t provide value is stupid.

 

[JLova]

shyt is impossible to not involve credit in your life as a grown ass man.

and the way the system is built, you need to have a credit history in order to buy a house or get loans. It’s a terrible game set up to trap you, but you gotta be smart and exploit the opportunities.

 

[winb83]

Yall are so simple. He's obviously talking about unnecessary spending. But go ahead and make yourself feel better thinking you know more about finances than a financial expert...

No the only debt he will accept is a 15 year fixed rate mortgage that's 25% or less than your after tax take home pay. The end.

 

[Turbulent]

If you can't save $2000/month you can't afford the house in that area. Move to a place you can save $500/month.

This is coli, y'all seem to know what y'all talking about.

Ahain, this is all good in theory. I'm all for moving to where you can achieve your goals. But typically if someone were to move somewhere where houses are cheaper, that means they lose their current job and have to get a new job at the new location (which more than likely will pay less).

Overall i feel you, im just saying it's more nuanced than the original plan you posted.

 

[Family Man]

Get it how you get it breh.

I’m not gonna lie tho, I’m happy to be at a stage in life where I don’t have to post pics of paper money on the net to prove to nikkas I’m getting it. Right now my bread making bread for me, so I don’t have a desire to touch that bytch when she walking the track.

I like that slick talk

 

[winb83]

I took a car loan out for $9000 back in 2019. The full interest cost of that loan to me is $700. On 2-1-2021 I bought 100 shares of CCIV stock for $2300. Those shares will be worth about $6000 today or a profit of $3700. That's the equivalent of a person working a hourly job for a month for 40 hours a week for $27.98 an hour or 23.12 an hour tax free.

If you have large sums of money rather than paying off good debt like a mortgage you're better off investing. I'm not saying pick something as risky as CCIV but still. If I would have taken a full $9000 and done that's $23,000 back from the $9000 or a $14000 profit before capital gains tax. To make that $14000 I would have had to pay $700 in interest. Worth it? Dave Ramsey says no.

 

[Illmagic]

I took a car loan out for $9000 back in 2019. The full interest cost of that loan to me is $700. On 2-1-2021 I bought 100 shares of CCIV stock for $2300. Those shares will be worth about $6000 today or a profit of $3700. That's the equivalent of a person working a hourly job for a month for 40 hours a week for $27.98 an hour or 23.12 an hour tax free.

If you have large sums of money rather than paying off good debt like a mortgage you're better off investing. I'm not saying pick something as risky as CCIV but still. If I would have taken a full $9000 and done that's $23,000 back from the $9000 or a $14000 profit before capital gains tax. To make that $14000 I would have had to pay $700 in interest. Worth it? Dave Ramsey says no.

Im not saying your wrong cause I dont even know what your talking about. And thats the point. Dave goes about making the plan easy to understand. No diss cause Im sure the math and stuff you broke down is legit. Its just over my head. Its easy for most people to understand the basic concept that if you didn't have credit card payments, car notes, loans and whatever else kinda debt, you have open money to invest. Im not saying I agree with everything he says but the basic premise of what hes talking about is legit. Manange money better and get out of debt. Its not about income. People be calling in his show making 6 figures and they are straight up broke.

 

[GoFlipAPack]

Who tf can buy a house with straight cash

Everyone can. You just have to save and eat rice and beans, beans and rice until you have enough money

 

[kevm3]

I don't agree with him 100% but I get where he's coming from. When it comes to 0% loans, if you actually have the money to pay it off in your account, yea, sure, get that item and make those monthly payments, but you better keep that money in your account JUST for that... but if you don't and you're dependent on making those payments from your monthly paycheck, then you might want to wait before purchasing that item because there is most likely some obscene interest rate attached if you miss a payment. You have one of those interest free loans but don't have the money in your account and you lose your job, then you are in for some serious problems.