What do we know about Dave Ramsey?

[noamnety]

He's got a social security misinformation calculator on his site, people on another forum are all excited because they think they will be getting $11,000 a month under the new SS plan.

http://www.daveramsey.com/

So I need some debunking on that, someone on FR off all places pointed out that it's missing a $1,000 cap until 2009? I don't know the details on that. And it obviously doesn't address risk or the insurance part of Social Security INSURANCE.

Looking into him, I see he's a christian (700 club) financial advisor talk show guy. He's involved in the Lambo Group, a group of christian professionals scratching each others backs, as far as I can tell. And he does financial advice for churches, based on the 800+ scriptures telling them how to handle their money (faith based finances).

And he's had his advise column cancelled by several newspapers last year due to printing the same question roughly 10% of the time, and identical answers, but attributing the questions to different authors.

He's been parroting the RNC talking points on social security pretty heavily lately. Not that I'm questioning who his circle of professional friends is, or that he's part of the payola press, mind you. I'm just wondering if there are any connections I'm missing here.

[Richardo]

1. That is one crappy model

What a financial genius:

C Fund (common stock index fund)
10.99% average return over last 10 yrs (*Dave recommend this fund)

Does not calculate the benefits with caps.
Note: Our calculator does not account for the phase in process included in the President's plan. Our calculator assumes the plan has been fully phased. The phase in process will vary based on your salary. :eyes:

Plus get this:
Those workers who do not elect to create a personal retirement account would continue to draw benefits from the traditional Social Security system, reformed to be permanently sustainable.*

*Read: with promised benefits cut by up to 40%

[leftyandproud]

2. He gives great advice..

I don't know if the calculator is accurate but he has some damn good advice on finance. I highly recommend his book Financial Peace. Saved my life.

[elsiesummers]

3. He does Christian Personal Finance Radio Shows.

I used to listen to him sometimes (although I'm not Christian). I'm not surprised he's pushing the SS privitization because he's evangelical (part of the Bush special interests) and because he's very pro no load index equity mutual funds. His investing advice is extremely certified financial planner conventional.

Overall - his real concentration is on getting people who are heavily in debt out of debt. His approach is to steer people away from bankruptcy and toward making life altering changes - one of his gimmicks is to get people to put their credit cards in a blender on air and call it a "plastectomy."

His investment advice is fairly limited because he concentrates so heavily on debt reduction.

I think for someone who has serious spending issues or problems using credit in a positive way, he is worth listening to, if you can stomach the Christian angle. He gives advice about specific approaches to paying off debt.

Apparently he went bankrupt and then turned his life around. His show is interesting the first couple of times but after that it's very one note - he just repeats himself.

As a saver and not a spender, I don't think Ramsey has much to offer.

As far as investment advice goes, he is extremely limited and I think investors and savers would be better off listening to or reading Susie Ormand, AndrewTobias (and Less Antman), Bob Brinker, Bill Fleckentstein, John Mauldin, Terry Savage and other less debt oriented and more investment oriented advisors.

[noamnety]

4. I'm not so much concerned about the general advice he gives

You know, get rid of debt, get rid of high interest cards, live within your means, that's all common sense stuff.

I'm more interested in his business connections, since he's coming off sounding a bit like Armstrong at the moment.

[elsiesummers]

5. I think he does more good than harm.

I think it would be a shame to take down someone who delivers the get out of debt message with evangelical zeal for the wrong reasons.

While I have nothing in common with his target audience (as an Agnostic/Athiest who is a tightwad from birth) I think he probably does a lot of good.

I would think that his past, his bankruptcy, would be an area more likely to provide the shadier side.

I think a lot of CFP types are too gung hoe on the stock market as a retirement vehicle and this is the real source of the problem with Social Security Privitization - and would suspect that Ramsey is one of these.

Andrew Tobias at andrewtobias.com does make some great anti-privitization arguements that I haven't seen around - most especially that the outflow from Treasury purchases, of that 2% (actually 4%) of income will cause interest rates to skyrocket in order to attract Treasury purchasers.

The problem with privitization, beyond the concerns about retirement security, are unintended consequences.

[noamnety]

6. I'm not interested in "taking him down"

But if we can debunk the calculator on his site legitimately and concisely, and find the reason that he's spreading misinformation there, it's for the good of the social security system.

There's a point at which the good of helping individuals to get out of debt has to be balanced with the bad of helping to dismantle social security. If he helps 1000 people pay off their credit cards but helps 1000 other people vote against their own interests so they end up having to chose between medicine or food, is that good or bad?

[elsiesummers]

8. Maybe you should write him about errors in his calculator.

It probably wouldn't hurt. Maybe he would legitimately appreciate the input if it is offered in a helpful way. (It never hurts to start on a good note).

My problem with any SS privitization is that it might be the first crack in the armor of SS.

I actually don't think, if the privitization was limited to the current proposals, that it's all bad.
After Greenspan's speach I think they are going to try to go for a compromise which is 1% (2% including employer contribution) in order to push it thru and keep under the 1billion borrowing threshhold that Greenspan suggested).

The problem is that Bush privitization would be the first chink in the armor of SS and the Republican goal to completely dismantle all entitlement programs.

The problem is sort of like late term abortion. While I personally don't think late term abortion is a good idea I'm against any cracks in the armor of abortion rights. So - I'm for late term abortion.

SS needs to remain the third rail so they won't use this first privitiztion step to take an axe to the entire program.

[Bunny]

7. I enjoy his radio show from time to time. What I've learned:

It is no-nonsense basic financial advice for those struggling with debt, or just trying to get ahead and stay ahead. Essentially he says: if you can't afford to pay cash, don't buy it. No credit whatsoever, except for your house.

I haven't looked at his Social Security calculator, so I have no idea if it is good or bad. Dave uses a network of Endorsed Local Providers (ELP's). These are supposedly people from many walks of life: insurance, investment, etc. who agree with the Dave Ramsey approach of helping people get what they need while still living within their means.

His investment advice is limited to basically putting your money into slow-growth mutual funds (I think that's what he calls them). He says they are very safe, but you have to leave them in for the long haul. No risky investments for him.

He is a Christian and makes no bones about it, but I have found that he doesn't spend all that much time talking scripture during his show.

He is definitely a Christian Conservative, whatever that means, but he tends to stay apolitical during his show. There's no question he's a fundy Repub, but he also tells people that no government, whether it's Republican or Democratic, is going to save them. During the campaign, I heard him say that neither George Bush nor John Kerry can fix your life up - you have to do it on your own.

He went bankrupt through poor real estate investments, back in the late 80's.

I honestly don't think that there is anything nefarious about Dave. He's no Armstrong Williams, IMO. And no, Dave did not pay me to write this!

[noamnety]

9. Too late to edit my typo

It's The Lampo Group (not Lambo) he's involved in, in case anyone's wondering about that.