The Setup:

Dave Ramsey has become one of the leading names and brands in finance and for good reason. The advice he gives benefits a lot of people across the country but is all that guidance applicable to you? Let’s look at his most popular teachings and determine how much we agree with.

Click the timestamps below to skip to a specific topic in the episode.

The Combination and Key Points: 

If you’ve done any financial research, there’s a great chance that you’ve come across Dave Ramsey. The radio host, author, and speaker has built one of the strongest brands in finance based on his teachings and philosophies on debt.

This guidance has helped make many people more aware of their spending and their money, but how closely should you be listening to every piece of advice he gives? This one-size-fits-all approach works for a wide audience but what about for your individual plan?

We want to get Ben Schrock’s opinion on the advice he gives out a lot to see how much he agrees with. It’s just like we say about any financial opinions you hear. Always get a second opinion and that’s what a financial advisor will be able to do. They know your specific situation and can determine whether a strategy or idea will fit with your needs.

So we’ll take a look at few different areas of advice starting with the debt snowball. Is the idea of paying off your smallest debt regardless of interest rate always a good plan?

What about his investment strategy with mutual funds that says a few different funds will usually be all you need for a portfolio. We’ve talked a bit about mutual funds before on this show but Ben will reiterate his opinion on this investment option.

Maybe the area Ben disagrees the most is with the expected rate of return Dave usually pushes along with the guidance that you can spend 8% of your money in retirement each year and be okay. This might be setting people up with unrealistic expectations and we’ll explain why.

There are a couple other ideas to address, but the overall takeaway is that what Dave does is great for people and any awareness on finances is good. Just know that his core audience is younger and carrying a lot of debt typically, which isn’t the same place many retirees and pre-retirees are going to be. Take all financial advice with caution and rely on your advisor to help steer you in the right direction.

[1:11] – We’re in the process of moving into a new office.

[2:40] – They’ve posted a free webinar to the website.

[3:22] – What we’re talking about today.

[4:57] – The Debt Snowball

[6:27] – His investment advice dealing with mutual funds.  

[8:39] – Unrealistic expectations with returns and spending in retirement

[10:49] – A good idea to stop contributing to retirement accounts until debt is paid off.

[12:33] – This one-size-fits-all approach goes against the benefits of an advisor.

[15:09] – The more awareness on finances the better.

Thanks for listening to another episode of Unlocking Your Financial Future. We’ll talk to you again next week!


 

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