Dave Ramsey's Town Hall For Hope

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tx_floods's picture
tx_floods
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Dave Ramsey's Town Hall For Hope

For many years now, my wife and I have followed Dave Ramsey's financial advice like it was the gospel. As a result, we have no debt save for our mortgage, we have a little money tucked back, and most importantly, we live within our means. Listening to his show over the last few months, I think I have some kind of cognitive dissonance. That is: The advice Dave gives on his show is the same he's given for years. Suddenly, it seems like it's not very good advice, in light of what I'm learning about from CM and other reading. He has stated that we shouldn't get hysterical, he's even poked fun at the Y2K-ers, and I heard him say that he knows many people at the top levels in banking and on Wall St. and that many of them are trustworthy, despite the bad apples. [All my synopsis, not direct quotes.]

It seems like there are a few options:

a) Dave is totally in denial and out-of-touch with reality.

b) Dave is trying to keep people's thinking calm and rational.

c) Dave's advice is still sound, despite the crumbling economy and CM and others are mistaken.

d) Something else I haven't figured out.

 He's hosting a free simulcast event of some sort, you can find the details at www.townhallforhope.com. I would be interested to know your thoughts on the matter. Maybe those of us that are going to watch the event could discuss pros and cons after his presentation.

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Re: Dave Ramsey's Town Hall For Hope
tx_floods wrote:

For many years now, my wife and I have followed Dave Ramsey's financial advice like it was the gospel. As a result, we have no debt save for our mortgage, we have a little money tucked back, and most importantly, we live within our means. Listening to his show over the last few months, I think I have some kind of cognitive dissonance. That is: The advice Dave gives on his show is the same he's given for years. Suddenly, it seems like it's not very good advice, in light of what I'm learning about from CM and other reading. He has stated that we shouldn't get hysterical, he's even poked fun at the Y2K-ers, and I heard him say that he knows many people at the top levels in banking and on Wall St. and that many of them are trustworthy, despite the bad apples. [All my synopsis, not direct quotes.]

It seems like there are a few options:

a) Dave is totally in denial and out-of-touch with reality.

b) Dave is trying to keep people's thinking calm and rational.

c) Dave's advice is still sound, despite the crumbling economy and CM and others are mistaken.

d) Something else I haven't figured out.

He's hosting a free simulcast event of some sort, you can find the details at www.townhallforhope.com. I would be interested to know your thoughts on the matter. Maybe those of us that are going to watch the event could discuss pros and cons after his presentation.

My gut reaction is to go with (b) - (perhaps he's in collusion with the banksters to keep us serfs dumbed down). I'll be interested in hearing your impressions after you've watched the show.

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Re: Dave Ramsey's Town Hall For Hope
tx_floods wrote:

For many years now, my wife and I have followed Dave Ramsey's financial advice like it was the gospel. As a result, we have no debt save for our mortgage, we have a little money tucked back, and most importantly, we live within our means. Listening to his show over the last few months, I think I have some kind of cognitive dissonance. That is: The advice Dave gives on his show is the same he's given for years. Suddenly, it seems like it's not very good advice, in light of what I'm learning about from CM and other reading. He has stated that we shouldn't get hysterical, he's even poked fun at the Y2K-ers, and I heard him say that he knows many people at the top levels in banking and on Wall St. and that many of them are trustworthy, despite the bad apples. [All my synopsis, not direct quotes.]

It seems like there are a few options:

a) Dave is totally in denial and out-of-touch with reality.

b) Dave is trying to keep people's thinking calm and rational.

c) Dave's advice is still sound, despite the crumbling economy and CM and others are mistaken.

d) Something else I haven't figured out.

He's hosting a free simulcast event of some sort, you can find the details at www.townhallforhope.com. I would be interested to know your thoughts on the matter. Maybe those of us that are going to watch the event could discuss pros and cons after his presentation.

 

I'm in the same boat as you.  I'd listened to Dave up until a few months ago and have managed to pay off all debts save the mortgage, but I hear him say the same things he always has, about investing long term in proven mutual funds with a good track record.  After being somewhat enlightened by the Crash Course and ideas about ever expanding growth and how it's not sustainable, I really wonder what Ramsey will say.  I'm going to attend on Thursday night so I'll chime in also. 

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Re: Dave Ramsey's Town Hall For Hope

I would not consider myself a Dave Ramsey follower although I have listened to his audiobook "The Total Money Makeover".  I think that living within one's means and paying down debt is sound advice.  Other ideas such as invest in mutual funds and don't invest in gold might have been good advice over the past twenty some years, but may no longer be the case. 

One of the things I took away from the Crashcourse is the next 20 years is going to be a lot different from the past 20 years.  I think of it as a paradigm shift - and have been struggling to make sense of the world while challenging basic 'conventional wisdom' from news media, family, and friends.

My personal financial goals are to pay down debts completely and to accumulate precious metals.  I guess I'll know in 10 years or so if this was a good decision.

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Re: Dave Ramsey's Town Hall For Hope

Did anyone catch the Town Hall For Hope last night? Due to technical & timing difficulties, we only got to listen to the last question & answer portion of the show. I think they're going to re-play the event on Fox Business this weekend. Wondering if anyone has any thoughts on Dave's message.

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Re: Dave Ramsey's Town Hall For Hope

TX_Floods

In my opinion, the answer can only be:

 a) Dave is totally in denial and out-of-touch with reality.

For all the reasons that you cited. I listened to 20 minutes of the Town Hall marketing event and turned it off in disgust.

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Re: Dave Ramsey's Town Hall For Hope

I have read Dave Ramsey's stuff and listened to him.  He gives great advice and like you have mentioned, his advice has helped you get your priorities in line.  That is the same thing Chris Martenson is trying to do,  Help us all realize what is important to us and get our priorities in order. Mr. Ramsey is a Christian "budgeter", not a economist, or asset manager.  He is a financial adviser in the sense he helps people get their financial lives in order.  He is no different from a lot of other "financial advisor's".  They help you get your financial life in order and put you in an asset allocation that fits your risk tolerance and you are good to go.  But, most advisor's get their financial information, asset allocation or specific "fund or stock" advice from the Economist on wall-street or the Economist that is hired by their firm.  The advisor's are told and believe to "invest in the long run".  Mr. Ramsey is no different than the cheerleaders on CNBC or Wall street.  I do not believe he is trained, nor does he want to really get into the profession of analyzing data to make specific recommendations.  Everyone who relies on a "financial adviser" for advice should go through the process you are going through.  Is this person trained to analyze investments, or is this person getting the specific investment allocation from the "back office" or Wall street economist.  Chris Martenson not only helps us in the sense of getting our priorities in order, he helps us to analyze the data.  Ramsey stops at the first part.......

Not sure if that perspective helps...

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Re: Dave Ramsey's Town Hall For Hope
memorrison wrote:

Not sure if that perspective helps...

That's good stuff. What you say makes sense. I recently did some looking around for other insight on DR, and found some comments, somewhere (Forbes? Bloomberg? Other?) that said while he is good at what he does, Dave does not really have a grasp of macro-economics. (Which I don't either for that matter - Trying to figure this whole catastrophe out has really made me a reader!) That kind of ties in to what you are saying.

Maybe an acceptable conclusion for me to reach is that while his advice really helped us get on-track, it's time for me to take my own situation and my own future and make my own best decisions. (Trust myself? Scary stuff!) Time will tell if his perspective or if TEOTWAWKI perspective is correct. Either way, I'm going to put a little extra food in my pantry. I'm going to figure how to grow a garden for food, and I'm going to figure out how to live a little closer to the earth. I may buy some rifles and handguns; I haven't decided yet.

I want to say this, too: I don't want to throw the baby out with the bathwater: For the small portion I was able to listen, Dave had a few points that I think make sense, no matter your financial perspective. Be aware of who your friends are, and associate with people you want to be like. Fill your brain with good stuff by reading good non-fiction books. Take action. I think getting and staying out of debt is sound advice. And positive perspective in these times is probably very valuable. So, it's not that everything he said I would disregard.

He also said some things that gave me pause. He went on a fairly long spiel about gold being a crummy investment over the long run, and to invest in good growth-stock mutual funds. He quoted some percentages of gold from 1830-something till now, and gold does not stack up against GSMF's. He said that gold was the highest it's ever been. He likes to buy low, sell high. I'm not sure about all this, but I do hesitate about buying gold at $1000 an oz, considering it could drop to $600 an oz. Not sure what to do on this.

He also answered a question about inflation stating that inflation could be a problem, if we don't get Congress reigned in. Like it was a conditional, future possibility. It's my understanding that the printing presses are running right now, printing off money like no tomorrow. Congress is not reigned in, and I don't think they will be reigned in. This particular answer of his was really the one that torqued me off the most, I think.

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Re: Dave Ramsey's Town Hall For Hope
tx_floods wrote:

For many years now, my wife and I have followed Dave Ramsey's financial advice like it was the gospel. As a result, we have no debt save for our mortgage, we have a little money tucked back, and most importantly, we live within our means. Listening to his show over the last few months, I think I have some kind of cognitive dissonance. That is: The advice Dave gives on his show is the same he's given for years. Suddenly, it seems like it's not very good advice, in light of what I'm learning about from CM and other reading. He has stated that we shouldn't get hysterical, he's even poked fun at the Y2K-ers, and I heard him say that he knows many people at the top levels in banking and on Wall St. and that many of them are trustworthy, despite the bad apples. [All my synopsis, not direct quotes.]

It seems like there are a few options:

a) Dave is totally in denial and out-of-touch with reality.

b) Dave is trying to keep people's thinking calm and rational.

c) Dave's advice is still sound, despite the crumbling economy and CM and others are mistaken.

d) Something else I haven't figured out.

 He's hosting a free simulcast event of some sort, you can find the details at www.townhallforhope.com. I would be interested to know your thoughts on the matter. Maybe those of us that are going to watch the event could discuss pros and cons after his presentation.

Hi, I am newbie, but I think I can speak to this as I have observed and pondered this, as well.

First, I really like Dave. 

Second I think he does good. 

Third (see the first two above, again) . . .  he is a arrogant dumbass. 

Being a arrogant dumbass myself, I recognize this.  Takes one to know one, maybe.

The advice he starts with -- No debt, take care of yourself, your family, your community -- all Golden.

But he learned all that by being an arrgoant dumbass and putting himself and his family in deep debt, jepordary, and misery.  That is what arrogant dumbasses do.  Part of the job description.

After the part he did not learn by those failures -- he tracks right back into being an arrogant dumbass.  Send money to Wall Street?  Dumbass.  Go burn Oil and live large?  He brags about that.  Arrogant dumbass.  On and on.

But like I said I DO like Dave, and think that he really does good on the first part of his message. 

Suppose I would tear the book in half, keep the first half, and go forth.

 

 

 

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Re: Dave Ramsey's Town Hall For Hope

TX_Floods-

It took me some time to log back into this discussion, but I wanted to comment on what you said.  I think you are on the right track that you have the basics down, now you need to branch out and see what is right for you investment wise.  The best advice anyone can give you is not to bet on any one scenario.  What Ramsey is saying is everything will continue as it has and not to worry about all the evidence you see to the contrary.  Doesn't it make sense to "hedge" you investments and have investments that would perform in different situations.  Example is Gold.  Gold is a great hedge - but don't put all of your money in Gold.   The way I explain it to people is that you have different buckets from best scenario to worst case scenario.  Then you fill the buckets and then make appropriate changes as the information presents itself.  I don't think Ramsey would disagree with that logic.  Think back one year ago and see what he was recommending, then see how you would have done. Then place some gold and other hedges in the mix and see what your portfolio would have done. 

Take care and congratulations on looking for more information - the best thing you can be doing!

 

 

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Re: Dave Ramsey's Town Hall For Hope

tx_floods

Allow me to chime in with a different perspective on Dave Ramsey.

He has some wonderful advice on staying (or getting) out of debt.Most of them seem to be based aroundbudgeting...avoid/reduce expenses in one area and apply those funds to an existing debt.  Once done, then pay for everything with cash.

memorrison stated it very very well in post #6 - Ramsey helps with giving advice about getting one's priorities in order, but he does not, imho, provide intelligent insight into how to invest.

Think of it this way - - if the average joe were to build a house, they'd hire a general contractor; an architect; an electrician; a plumber; a heating/air conditioning person;  a landscaper;  et al. 

One might expect the electrician to offer input on landscpe lighting, but that does not make him a landscaper.  The a/c guy might have some plumbing suggestions but it does not make him a plumber.  Each of these specialists are experts within their specific field yet we'd also expect them to have some knowledge in other areas related to their specialty.

Back to finances - the term "financial advisor" is a catch-all and means different things to different people.  Ramsey's message about no debt is sound financial advice.  Yet, knowing how to budget is not the same as knowing how to have money make money. 

Some people do it themselves;  others go find a specialist in each of the areas where they believe that a financial advisor is necessary. 

Ramsey's suggestion to invest in mutual funds for the long term is, in effect, outsourcing (or abdicating) one's financial future to a group of people who work for a mutual fund.

One other thing to consider....if you were building a house, you'd likely hire a general contractor to do the interfacing with all of the sub-specialties.  The assumption being that the general does this for a living on a regular basis, whereas you'll only be doing
it a limited number of times in your lifetime.

Most people use that logic when they approach their finances - they'll want to find someone to whom they can "outsource" the responsibility.  If it ends up that poor decisions are made during the house construction, ya just sell the house and start over.   However, if poor decisions are made during the construction of the financial house, you may not be able to just start over.  Those decisions could impact the owner for the rest of their life.  You can fire the financial advisor, but it might be too late, and it is you that is stuck with the results. 

Last comment and then I'll shut up.....on gold.  Keep in mind that there are a few schools of thought with regard to investing in gold.  One is as an investment -  Buy it low and sell it high, just like any other asset.  Another view for gold is as a store of wealth, and as a potential medium of exchange should SHTF.   I'll digress - there's a book entitled Pit Bull by Buzzy Schwartz.  He's a trader and there is a humorous section where he talks of walking down the street in New York City, in the midst of a financial panic, carrying a bag of gold in each hand, each worth 6 figures.       undigressing... If one knew that the dollar were collapsing, then an argument could be made to put a large %age of one's net worth into gold.  However, if that turned out to be wrong, then buying gold as an investment would likely turn out not to be the best move in one's investing career.     

JL Lord
 

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Re: Dave Ramsey's Town Hall For Hope

Thanks for the comments on DR; Really helps me to get ideas "gelled" in my head. The construction analogy was particularly apropos, as that's the industry I'm in. It made perfect sense to me. Thanks.

JL Lord wrote:

Last comment and then I'll shut up.....on gold.  Keep in mind that there are a few schools of thought with regard to investing in gold.  One is as an investment -  Buy it low and sell it high, just like any other asset.  Another view for gold is as a store of wealth, and as a potential medium of exchange should SHTF.   I'll digress - there's a book entitled Pit Bull by Buzzy Schwartz.  He's a trader and there is a humorous section where he talks of walking down the street in New York City, in the midst of a financial panic, carrying a bag of gold in each hand, each worth 6 figures.       undigressing... If one knew that the dollar were collapsing, then an argument could be made to put a large %age of one's net worth into gold.  However, if that turned out to be wrong, then buying gold as an investment would likely turn out not to be the best move in one's investing career.

I'd like to play this out just a little. Work with me on this one: I understand, more or less, the different schools of thought you mentioned. For the sake of easy arithmetic, let's say that I buy some gold eagles at spot, plus my local dealer's mark-up, of $1,000 an oz. Now, if it all goes to hell and a hand-basket, gold shoots skyward to $2,000 an oz. Great for me! On the other hand, maybe the policy-makers aren't the Three Stooges, and they really have a plan to make the dollar strong again. (I know it's a stretch - This is just an example!) All of a sudden, gold drops down to $600 an oz or maybe less. In the second case, no matter what my rationale for buying the gold was, I've lost $400/oz purchasing power. Ultimately, the only "practical" use for gold is the amoung I can trade for Amero's. (I mean, the US Dollar) to buy some bread and soup. I cannot eat the gold, and there's only so much that money is useful for: to save, to spend, and to give away, if I understand it properly. How would these different schools of thought relate to the two scenarios above? Thanks for playing along.

(Wait! Did I just hijack my own thread?)

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Re: Dave Ramsey's Town Hall For Hope

tx -

and here I thought I was gonna get to shut up about gold....but since you asked, here's my 2 cts...

I hope I'm understanding your question correctly....
You wrote  "the only practical use for gold is the amount you can get in trade for Amero's (or any currency) to
buy bread & soup" - I'd agree.  That statement applies for any investment that you make - be it gold,
stocks, bonds, or even baseball cards & pez dispensers!  To me, the definition of an investment
is "allocating capital so as to get interest, income, or an increase in value".     Since gold doesn't pay interest
nor income, the hope, in this scenario, is that it goes up in value, for whatever reason.

Using your example of buying at $1000 and then see it drop to $600 - you'd now have a $400 loss for every
ounce purchased... which equates to watery soup and day-old bread.  That is the exact opposite of buy low and
sell high!   That's what known as an "aw - insert favorite 4-letter-word here"  trade!

Conversely, if you bought gold not with the intent of selling at a higher price, but instead as a possible medium
of exchange in case SHTF...then, the above statement is still true - "the only practical use for gold is the amount
you can get in trade for Amero's (or any currency)  to buy bread & soup".   

The difference is that if SHTF, then baseball cards would lose value,  stocks may or may not lose value (depends
on what the company does - baseball card company=probably not much value....gold mining company=probably
some value....food producer = probably some value)  and gold has historically had value and that value can be
traded into whatever "currency" one desires. 

Knowing that you have an interest in learning how to have money make money,  it would be natural for you to
think "well, if gold can be an investment that I could profitably trade...and I can bury it in the backyard to dig up in
case SHTF, why bother to learn about stocks/bonds or baseball cards...why not just trade gold?"

Good question (d'ya like how I ask a question, compliment it, and then answer it?  Guys in white coats will
soon be at the door)....however, there are many times in history that gold's price does not move around much.
If price doesn't move or doesn't move very much, then it becomes a challenge to buy low and sell high... 

If I totally missed the question - try me again.  My skin is thick and sometimes so is my head

JL Lord

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tx_floods
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Buying Some Gold

JL - Thanks for engaging me on this one. I'm primarily interested in buying some gold & silver as more diversification to my portfolio. (As if I HAD a portfolio ~ HA!) I think it would be good to own some gold and some silver (I, for one, love the idea of "Silver Sams"!) just in case. I'm not looking to trade at a profit. I just don't want to participate in an aw-_ _ _ _ deal. Gold is at high levels right now, a level that represents a lot of money, to me. I read a lot about gold skyrocketing to many thousands per ounce, but then i also read about "The Powers" manipulating gold to keep it low. What if I buy at $1000, and it drops to $600 - Then what?

I suppose I'm buying as a hedge. I don't know if the system will collapse to total nothingness, but I can see that the dollar may tank, and in the interim, until they replace the dollar with an equally valid form of fiat money, it may be helpful to have something that can be coverted into something that can buy the bread and soup. I guess that qualifies as the "medium of exchange" example from above.

I often think about this, as relating to gold; Maybe it comes from Dave Ramsey himself. If one bought gold a hundred years ago, in 1908, one ounce of gold would buy one man's suit, really nice. Today, that same ounce of gold will buy roughly, one man's suit. Thus, gold, is not a good investment over time.

Let's look at that same example, though, from another perspective: If I had $1.00 a hundred years ago, it would buy roughly, I don't know, let's say.....Three loaves of bread. Today, that same dollar would only purchase a portion of one loaf of bread. Thus, when compared to the fiat dollar, gold holds it's value very well. I am thinking about this right?

I'm sure now that this is in the wrong forum. It's interesting the way a conversation will twist & turn. If someone wants to move to the gold forum, please do so.

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SamLinder
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Re: Dave Ramsey's Town Hall For Hope

tx_floods,

Near as I can tell, you've got a pretty good handle on the PM's situation.

Gold and Silver are not good investment instruments in the short or long term. They're too volatile.

However, if your aim is to preserve wealth across time and SHTF scenarios, then PM's are good to buy and hold.

Using your suit example, if you own one ounce of gold and it buys a suit, it will buy a suit whether gold drops to $200/oz or rockets up to $2000/oz. That's what I mean by preserving wealth across time.

If you have further PM questions, it would be a good idea to pop over to the "Gold's near future" thread.

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tx_floods
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Re: Dave Ramsey's Town Hall For Hope
SamLinder wrote:

If you have further PM questions, it would be a good idea to pop over to the "Gold's near future" thread.

I've been reading that one with great interest. Lots of knowledge there!

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