Dave Ramsey is a moron

My friends love Dave Ramsey. They love him so much that they bought a Tesla and paid it off aggressively. They also bought a house with a 15 year mortgage. Rather than investing in index funds, they’d rather “get out of debt fast” by tying up all their cash in the equity of their home. Investing is optional to them only after they’ve paid off every liability. Because that’s the Dave Ramsey way! Pay off your house then invest. Set your life on fire then do damage control. Don’t worry, his financial diet will save you from all those financial donuts you’ve been eating. Papa Ramsey is here to heal your boo-boos… Has anyone else seen his philosophies hurt people or is it just me?!

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Hi @Shae_Bryant,

I think you have to realize what Dave Ramsay’s target audience is. Think of it as AA for credit card users. I used to not like him either when I first watched a few of his videos. After talking to a few people that religiously follow him, they need someone to be really strict because they lack discipline and will let debt get out of control.

I am sure people like you are not his target audience but I do know a lot of people that could do a lot of good following Dave Ramsay’s steps. I think I agree with Dave Ramsay’s first few baby steps. Paying off the house isn’t a bad idea either just for the peace of mind. Statistically you are better off putting the money in the market because you will have an 8% return, but there is something to be said for peace of mind.

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Well, to be fair to Dave, he definitely doesn’t recommend paying off your house before investing. On his steps, paying off your house is step 6, while investing for retirement is step 4. He also definitely would never condone buying a Tesla on a loan.

So, I certainly think there’s room to critique some of Dave’s advice (i.e. high load/high fee actively managed mutual funds) but what you mentioned sounds like people who want to spend a lot misusing Dave’s advice as an excuse.

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