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Dave Ramsey

Davish Respsones:
Mortgage without credit can be achieved through manual underwriting.
No opinion on the insurance premium vs. credit score, I've never heard of such but could see it.
The entire premise of Dave Ramsey is to get a way from payments and pay cash for everything, when you take a loan, whether 0% interest or not, you're still making payments. You would still be buying a depreciating asset, that you're making payments on whether it's interest free or not.

Manual underwriting is a pain in the ass. Look it up. Banks hate it, and you better have a great high paying job with tons of liquid assets for a manual underwriting review to overlook no credit history.

Yes, insurance premiums vs credit score is a thing. It's considered part of the risk factor now.

A house is never a depreciating asset, unless the entire economy tanks.

But 0% loans are free money from the bank. Doesn't matter if it depreciates because in the end you paid the same either up front or in the end because it was no interest.

People who can't responsibly use credit cards are bad with money anyways. I have a credit card that vies me 6% cash back on groceries and 3% cash back on gas. I use it on those two things and pay off the balance entirely every month. I get hundreds of dollars a year in cash back. Literally free money.

Don't get me wrong, most of Dave Ramsey's advice is great. But it's geared for people who were terrible with their money like he was before he got out of debt.

You can be responsible with credit and make it work for you. That's the only myth I'm trying to dispel.
 
Example:

Do you carry collision and comp auto insurance? Why?

I have not had it in more than 40 years. The amount of cash saved is enough to purchase any new vehicle I could find.

Don't forget, all your monthly payments are made with after tax income. Add 1000 in payments to your budget and you need to be making 1600+ more each month to cover them.
 
I absolutely agree with buying a house vs. renting if you will live there several years to negate closing costs, and hopefully you don't have to sink a bunch of money it.
People in their 20's have MANY options to make more than $30k-$40k per year. Whether it be a 2 or 4 year college degree (you can go to college debt free), or a trade. I have several buddies Mid 20's in trades making $50k-$100k depending on where they are at with their respective program. That includes electricians, mechanics, airline mechanics, welders, etc.
I agree, and of course they do. But I'm basing it off the figures. Average median household income in Georgia is about $58700. So less than $30k a year per earner in the household if you factor a two earner household. Most of Georgia can't buy a house cash with those numbers.
 
I'm sorry, but that may have worked when our parents and grandparents were young. Back then yes you could literally save and buy a house cash in your 20s or 30s because houses were affordable. People in their 20's now making $30-40k a year aren't buying a house cash. A decent house in a decent neighborhood with decent schools for your kids will run you $120k+ in Macon. Probably north of $150k in the outskirts of Atlanta.

In the time you'd have to take to save up that kind of cash, you'd be blowing your money on rent that you'll never get back. If I am already having to pay $700-800/month rent on a two bedroom apartment, why not turn that rent money in to house payments that you'll actually have equity in?

So are you advocating that people just wait until they're older to buy their first house cash? That would kill the housing market and the economy. I think a house is the first and only major financial purchase you should borrow for. Cars sure I'm all for advocating buying used and paying cash. But not a house. My interested rate on my house I bought 7 years ago is 3.25%. I have 50k in equity in it. You aren't getting that paying rent or living at home with the parents.


I did it 20 years ago. Could easily start today and do it again.
 
You can be responsible with credit and make it work for you. That's the only myth I'm trying to dispel.
:tea: I fully agree, it's just not the "Dave" premise. As you just said, his program can work for everyone, because it takes the "people" aspect out of it, and literally spells out what to do and not do. I do see the point from Dave, though that is true wealth building, isn't making a few hundred bucks a year on credit card rewards (although, I still use a credit card for rewards as well). I need to get through some parenting books right now, but this is on my to read list: https://www.daveramsey.com/store/product/everyday-millionaires-book-by-chris-hogan
 
Example:

Do you carry collision and comp auto insurance? Why?

I have not had it in more than 40 years. The amount of cash saved is enough to purchase any new vehicle I could find.

Don't forget, all your monthly payments are made with after tax income. Add 1000 in payments to your budget and you need to be making 1600+ more each month to cover them.
But you're not factoring in rent. If you aren't financing a house, where are you living while you save up for the house? You're already making those payments every month, but in one scenario it's money you're throwing away and never getting back. In my scenario it's equity in a home I'll own.

Also, if you haven't paid collision in over 40 years, that means you've had way more years to save. Of course you should be completely debt free by then. :lol:

But comparing yourself to somebody just entering the work force or that still has 40 years to retirement isn't the same thing. In your example, somebody in their early 20's would be paying rent for 15-20 years before you could buy a house cash. That's literally over $120k in rent money you paid because you didn't want to finance a house. That makes absolutely no sense from a financial standpoint.
 
I agree, and of course they do. But I'm basing it off the figures. Average median household income in Georgia is about $58700. So less than $30k a year per earner in the household if you factor a two earner household. Most of Georgia can't buy a house cash with those numbers.
Understood,
Those figures (without factchecking I've seen very similar) are absolutely mind boggling to me.
 
I did it 20 years ago. Could easily start today and do it again.
I'm not saying it can't be done. But the cost of living has far outpaced what people earn these days. And financing a mortgage isn't the devil. Factoring in what you pay for rent, vs putting that same exact money towards a mortgage, the mortgage wins every time. Because at the end of that I'll own a house. Paying rent gets me nothing in the end.
 
But you're not factoring in rent. If you aren't financing a house, where are you living while you save up for the house? You're already making those payments every month, but in one scenario it's money you're throwing away and never getting back. In my scenario it's equity in a home I'll own.
Also, if you haven't paid collision in over 40 years, that means you've had way more years to save. Of course you should be completely debt free by then. :lol:
But comparing yourself to somebody just entering the work force or that still has 40 years to retirement isn't the same thing. In your example, somebody in their early 20's would be paying rent for 15-20 years before you could buy a house cash. That's literally over $120k in rent money you paid because you didn't want to finance a house. That makes absolutely no sense from a financial standpoint.
Absolutely, buy over renting. Just buy, with enough money down, in a growing area with decent market, and try to predict what the value will look like when you would be selling. If you buy today, and sell the house in 5 years, at the same price that you bought it at, you're not out anything because you'd have been renting the entire time and you'd have a little equity to show for it as long as you didn't sink tons into repairs/upgrades.
Or you could buy then sell in 15 years, and the house appreciates $150k, and you have equity + profit, or you could sell in 15 years and take a $150k loss because you sold in a "2009" economy.
 
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