Reply to Dave Ramsey worth it?

Forum Index » Money and Finances

Reply to "Dave Ramsey worth it?"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous]I think Dave Ramsey's advice is good for those starting out.  It is a good way to get out of debt.  But the PPs are correct who say his approach is very conservative and not necessarily the fastest way to build wealth.

Here are his steps:

1.  Baby Emergency Fund ($1000)
           - I actually think this is pretty small, and would make it 2 or 3 K)
2.  Snowball (paying down debt, in order of smallest to largest)
           - You will save more in interest payments if you do this by highest interest rate to lowest, but the smallest to largest debt is to help keep you motivated in the beginning.
           - I personally wouldn't lump all debt into this category.  I would exclude student loans and possibly car loans, but only if the interest rates are very low, as in less than 3 percent.  I would move those to between steps 4 and 5.
3.  Fully funded emergency fund (3-6 months expenses)
4.  Retirement savings
           - Dave recommends investing 15% of household income
5.  College savings
6.  Pay off home
           - I think the wisdom in this step depends upon your age and your interest rate.  I am young, and have a very low interest rate.  I have no intentions of paying off my mortgage early.  If I pay it as scheduled, then it will be paid off right when I am ready to retire, and I would rather be investing my money and building wealth since the rate is so low.
7.  Build wealth and give

[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics