This. I considered paying off our house during Covid then did a bunch of research and talking with professionals. I refinanced into a stupid low interest loan instead and kept the money I was going to be using to pay it off making money for me. The same with the decreased monthly payment.

 

And no one will tell you that was a dumb move. Unless you took that cash to Vegas and spent it on hookers and blow 🤣 or bet it all on a hand of blackjack, which you didn’t.

Like others have said, Dave Ramsey is all about behavior modification and mindset changes WRT consumer debt, for those who have failed to manage their finances responsibly. I don’t completely follow everything he says, but avoiding EVER carrying a credit card balance is sound advice. Also, like he says, “No one ever got rich with airline miles”. I listen to his pod casts when I cut the grass or do yard work, and enjoy listening to him and his crew occasionally. It usually makes me feel pretty good about myself and how I’ve done so far.

My biggest gripe with him, and it’s a small gripe, is how he brings religion into it. Which I would imagine could alienate some listeners, but he has a strong faith and is entitled to his views, on account of him owning the microphone. If it offended me, I could just stop listening, but I continue to listen occasionally, because I like hearing him help people with serious financial woes.

 

Yes. A lot of folks think having a mortgage is the worst thing in the world. If you refinanced into <3% during COVID then you are better off paying the monthly minimum and keeping the rest of your cash in cash collecting 4% interest or tied up in a 6% DAL bond. Going against the normal can be beneficial sometimes!

 

The problem being that people don’t do this, they see that excess money in their paycheck and just spend more and end up living paycheck to paycheck.

It’s amazing how people making $300k+ can be in such precarious financial situations.

 

Wasn't there a thread on here somewhere about how guys are gonna spend their retro checks?

 

In the mid 2000s CCs were doing 0% and no transfer fees. I put $15000 for a downpayment on a rental property on a CC and transferred it immediately. 13 years later I paid it off never spending a penny on interest. CCs aren't doing that anymore. Carleton Sheets would be proud.

 

I agree that his advice isn't for everyone. But he uses absolutes, A LOT. And his followers on here, especially well off ones, jump into the discussion as if owning a credit card is the devil's work. Just like everything in this society, there is no room for nuance. For example, the credit card you referenced. Carrying a balance is obviously bad. But you don't need to carry a balance to reap airlines miles or cash back. Yes, if you don't think about it or budget, things can get out of hand very fast if you use a credit card. But you know what? If you are disciplined and properly budget, credit cards are great.

 

Who cares? If I get a $90k retro check and want to spend it on myself by buying a car or a house or a boat, why is that triggering?

 

But you know as well as I that the vast majority of CC holders won't do that. And that actually goes to the heart of what DR is all about - behavior modification. I think an interesting contrast is how DR and Clark Howard go about 'training' people to get out of debt. Dr says to pay off your smallest balance first. That gives the debtor a sense of accomplishment and is a quicker reward. CH on the other hand says to pay off your highest interest rate first (which I think is the better financial move... but requires more discipline which has already shown itself to be elusive).

Anyway you slice it, they are trying to help people that get into a bind via a rigged system. The .gov wants people in debt. Were that not true, how is it that they allow credit card companies... banks... to charge usurious rates of interest on people that already show they cannot afford to be where they are?

 

Right on cue.

I couldn't care less what you do with it. I just thought it was funny.