Investment Help

If you are seeking investment help, look at the video here on my services. If you are seeking a different approach to managing your assets, you have landed at the right spot. I am a fee-only advisor registered in the State of Maryland, charge less than half the going rate for investment management, and seek to teach individuals how to manage their own assets using low-cost indexed exchange traded funds. Please call or email me if interested in further details. My website is at If you are new to investing, take a look at the "DIY Investor Newbie" posts here by typing "newbie" in the search box above to the left. These take you through the basics of what you need to know in getting started on doing your own investing.

Monday, June 16, 2014

Are You a Dave Ramsey Fan?

Dave Ramsey is the well-known guru for people trapped by excessive debt.  His strategy is to pay off the smallest debt and to create a snowball effect with the released funds to attack the bigger debt.  If necessary, he pushes a tough love approach whereby debt-laden people need to go on a beans and rice diet to pay off the debt. At least this is my take.  I haven't taken any of his courses or ever met with any of his counselors.  I listen to his radio show from time to time and have made it about halfway through his book The Total Money Makeover.

He apparently is a huge, life-changing help to many people whose life is overrun by debt.  And to me, this is a big deal.  I look at it as your money is either working for you, earning interest and dividends, or working against you by charging interest, late payments, overdraft charges, etc.  Much of the nation seems to be in the latter boat.

From time to time I run into people who spend more than they make and are digging themselves into the debt hole and recommend that they read Ramsey.

Having said all this, I cringe when he talks about investing in a "good mutual fund that earns 12%".  By the rule of 72, a 12% return doubles your money every 6 years.  Wow!  This sounds pretty easy (especially in a world of 2% inflation and anemic bond yields) and exciting to an investment novice. Unfortunately, it is not that easy; and evidence shows that funds with prior superior performance tend to subsequently underperform the market and have high fees that severely penalize investors.

Here are two other recent takes on Dave Ramsey:

"The Reality of Dave Ramsey's 12% 'Reality' (and why it really matters)" by Dough Roller

"Take Dave's Advice With a Grain of Salt" by Getting Your Financial Ducks In A Row

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