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About Dave Ramsey
Posted By Miranda Marquit On 06/03/2013 @ 12:10 pm In Personal Finance | 20 Comments
Dave Ramsey is one of the most well-known names in personal finance today, perhaps one of the most well known in our Top Money Guru poll , especially when it comes to debt reduction. Ramsey is known for his no-excuses stance on getting out of debt and living a life without debt.
One of the reasons that Ramsey resonates so well with many of his listeners is due to the fact that he has experienced financial trouble — including bankruptcy. Additionally, Ramsey isn’t shy about his identification as a born-again Christian. He has become increasingly vocal about the intersection of faith and finance.
While Dave Ramsey offers advice and opinions on all aspects of personal finance, he is perhaps most vocal about getting rid of debt, and then living without credit cards or debt of almost any kind. (While he claims that he hasn’t borrowed even for his recent home purchases, he does understand if his listeners get a mortgage.)
Ramsey came to his debt-free living conclusions as part of his own transformation. By the time Ramsey was 26 years old, he had a real estate portfolio worth more than $4 million. However, in order to build to that point, he was leveraged. He used debt to fund his success. At one point, though, more than $1 million in short-term notes was called in by a creditor. Ramsey filed for bankruptcy and began his journey.
Ramsey advocates that his followers get out of debt as quickly as possible. He popularized the term “debt snowball,” a process for getting out of debt by tackling each debt individually, starting with the debt with the lowest balance. He also wrote the popular The Total Money Makeover, which offers a step-by-step plan for getting out of debt and building a secure financial future.
Products sold by Ramsey include Financial Peace University, a course which is taught by certified instructors through religious congregations. The idea is to apply Christian teachings to finances, and help couples get out of debt — and stay out of debt.
Ramsey often advocates cutting up credit cards and living without debt. He encourages alternative credit reporting, and getting out of the credit scene altogether. Debt-free living is a central tenet of his philosophy.
Some of the criticisms leveled at Dave Ramsey include his advice in the debt snowball to start with the lowest balance, instead of the balance with the highest interest rate. He has also received criticism for his no-excuses stance against credit cards (rewards aren’t enough to justify their use). However, he has often pointed out that it’s more about the psychology of success , rather than strict adherence to the math behind the situation. Indeed, Ramsey often points out that it is the quick successes that help keep consumers motivated to make progress in their finances.
Ramsey also appeals to many Christians who see his advice as sound, but also based in faith. However, one doesn’t have to be religious to find some good advice in what Ramsey has to offer in terms of motivation to get out of debt and live debt-free.
What do you think about Dave Ramsey?
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