Dave Ramsey. Guru. I am still somewhat on the fence about this guy. Nick, over at PF Digest recently posited the question, Does the Debt Snowball Actually work? My answer would be yes, it does. I’d also go so far as to say that if with Dave’s giant marketing machine he can break through to just one person and make them change their habits, and escape debt, he has succeeded, and should be applauded.
I haven’t looked at all of Dave’s strategies, primarily because I can’t afford to buy them all. But for what I have seen many are flawed mathematically. But, and this is a Kim Kardashian style Butt (a big one for you slow folks) he has a lot of good points. He is going for the behavioral finance approach to change, and dovetails his strategies with a lot of biblical principles.
If I can point the finger at myself and look at my own faults for a moment, over complicating in the pursuit of perfection is a flaw of mine. I simply take pleasure in finding the most effective strategy, for many though, this approach can be overwhelming and creates procrastination. There is real truth in the concept that it ‘close enough’ is good enough, and perfection can impede progress.
When writing this post I spent a little time on Dave’s site, and I do so from a fairly educated perspective. My own designs in life are to find an ethical way to work in Wealth Management, both helping the little guy who is in debt, and helping the big guy who has the worries that come with High Net Worth. Additionally I am trying to find a way to further monetize Saverocity so that myself and the hardworking crew here can reap some of the fruits of our labor. However, in doing so I have a constant eye on the big picture – not screwing people over while not becoming the new North Korea.
Dave’s site blew me away on this one. The impression I took from it is that it is a money making machine. It’s not that there isn’t good advice on there, some of the strategies are superb, but in fairness, the best ones I saw were not in the actual advisory space, but in the monetization space. Everything seems to have been optimized to make more money. Just take a look at the Church Leadership Course for lessons in how to sell to people who want to sell to people, it is a joy to behold.
I guess the problem that I can’t quite align with right now is that Dave’s target audience is weak. They are the people in debt and in need of guidance. And since he found this audience he gone from bankruptcy to being worth over $50M. To make that much money, from people with so little, makes me think that whatever good he may be doing, he is doing it by taking advantage of people who look to him for help and inspiration. Certainly, he could also have helped 1M people and only charged them $55 each, but based upon the prices on his website, and his affiliate network, I’d imagine that the number he has touched is a lot less than that.
That said though. If he charges $1,000 for something that could be delivered for $100, yet saved the customer $5,000 is he really wrong?
“Dave’s site blew me away on this one. The impression I took from it is that it is a money making machine.”
So it’s pretty much just like Saverocity?
Don’t make me censor you
Sorry, that was a typo. That was supposed to say, “So it’s pretty much just like Travel Blogger Buzz”?
Mostly excellent debt advice
Mostly horrifically dangerous investing advice
Marketing machine
Gets angry and looks like a mean pompous arse when he gets challenged on Twitter (some legendary fights he got involved with colleagues)
Biblical principles? Really? Hey, there is a huge number of followers in this space—>market—–>more dinero.
As long as people can get some help with some his debt related advice it’s all good. Please don’t buy anything from him (addressing the readers, not you Matt). And stay the phuck away from him about investing advice.
As I am typing this I am looking at another MEGA marketer looking at me: Ken Fisher. If you think Dave is a master marketer, this guy is even bigger! Always fun to get his masterful direct mail pieces, maybe he knows I am rich or something 🙂
You were driving a Mercedes werent you??
At my house we say: Do not let the perfect be the enemy of the good.
Yep, that is a great saying!
He came to speak at our church. While I agree with most of his points I do gobs of manufactured spend so considering that I will not cut up all my credit cards. But I do agree credit cards are evil. Here is the video of him speaking, you will have to scroll down to the Stronger in Freedom message. http://media.willowcreek.org/weekend/stronger/
Thanks for the link, I think it would be a better place in America if everyone started out thinking credit cards were evil and slowly learned how to ‘harness’ them to their own designs.
America would be a better place but the CC loopholes would probably be gone. Like it or not, the credit revolvers allow the rest of us to ‘harness’ CC’s for our own benefit.
And I’d give up mfg spend if a few dozen people can benefit.
Great attitude, not sure how many would stand with you but it is admirable!
Surely America would be better off if people had a proper understanding of personal finance and debt in general. I don’t understand why thinks need to be branded as “Evil”. Debt (and credit cards as an extension) are an extremely important tool for any functioning economy.
Fire is an extremely important part of our civilization also, that doesn’t mean people should play with it.
As someone who fought her way back from bankruptcy after a financially disastrous (but personally and familialy–if that’s a word–advantageous) divorce, I can say that many of us, whether we know it or not, can use some basic financial tools.
Because I nearly did it again, 10 years ago, buying ads for my business.
Snowball your way out of debt? Yup. But you can’t keep charging, or it won’t work. PIF every month? Absolutely. And you had better have precise knowledge of what you are spending on/HOW you will PIF.
The one thing that we Murricans lack, as a society, is patience. And it’s patience that makes the snowball method work. It’s patience that moves a 490 FICO to a 710 or higher. Not magic, not smoke and mirrors. Patience.
The same goes for making money from investments.
Just for an experiment, I took advantage of three of those “three months for a ludicrously low amount” investment advice offers. I have now cancelled the third, and, after multiple multiple times at the Washington Times unsubscribe page, the volumes of religious, “buy these vitamins” and right wing crap is lessening in my inbox. Apparently it’s a bad idea to buy investment advice from someone who writes for Sun Myong Moon’s newspaper. Who’d a thunk it?
The investment advice was, nearly always, one of two sorts: here’s what to buy to survive the coming Armageddon in the marketplace” or “buy this super cool amazing stock and earn 1000% in 6 months”.
Um, yeah. Sure. Better to buy a boring stock and sell options, over and over. Which, by the way, is what my husband and I have done with our IRAs, much to the joy of the growing IRAs. Better, by far, than the mutual funds we’d been using.
Time matters, people tend to throw caution to the wind in order to accelerate the time it takes to wealth, which typically means they end up losing money and delaying the process even further.
Glad to see your own journey is turning out for the best, despite a few bumps on the road.