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Ramsey debt viewpoint explained

Saw this article this morning. Ramsey is building a succession plan. The over focus on debt is what kills me. Work a few extra shifts as an anesthetist? No.
Sell second home? No (I guess this is assumption because it says two mortgages, maybe it is on the same house???). Sell cars and buy cheaper used cars? Bingo.


 
Saw this article this morning. Ramsey is building a succession plan. The over focus on debt is what kills me. Work a few extra shifts as an anesthetist? No.
Sell second home? No (I guess this is assumption because it says two mortgages, maybe it is on the same house???). Sell cars and buy cheaper used cars? Bingo.


Ugh.

Stop investing?

Second house is stupid. Large car debt is stupid too. However, given her profession, I’d guess they’ll earn their way out of this crisis in about 5 years.
 
Saw this article this morning. Ramsey is building a succession plan. The over focus on debt is what kills me. Work a few extra shifts as an anesthetist? No.
Sell second home? No (I guess this is assumption because it says two mortgages, maybe it is on the same house???). Sell cars and buy cheaper used cars? Bingo.



I listened to the call, again Ramsey et al. are morons when it comes to student loans.

Key points

"she has a degree in anesthesiology"

"we gross 340k"

"no debt prior to 2019"

If she had no loans prior to 19' then she would be a resident MD and/or if she was a resident he would have said degree in medicine. Which makes me think she is a tech or Nurse Anesthetists.

Either she's making 80-120k and he's making 220k or she's making like $180k-210

Either way this is the advice they should have been given.

1. Apply for the SAVE (IDR) plan
2. File your taxes in 2024 as Married filing separate, that way you payment is based on just her income.
3. After 2-3 years amend your past returns to married joint. This way you get back the benefits you lost on your taxes. But still have the lower income for payments.
4. Absolutely continue 401k esp if you have an employer match, that’s money you’re leaving on the table, plus it lowers your AGI and thus reduces your student loan payment.

If she's in medical there is a good chance she's at a 403B ie non profit, if not she should consider making a switch. If she is she needs to apply for PSLF.

Totally agree with their advice on the $100k in auto debt though, holy smokes.
 
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I listened to the call, again Ramsey et al. are morons when it comes to student loans.

Key points

"she has a degree in anesthesiology"

"we gross 340k"

"no debt prior to 2019"

If she had no loans prior to 19' then she would be a resident MD and/or if she was a resident he would have said degree in medicine. Which makes me think she is a tech or Nurse Anesthetists.

Either she's making 80-120k and he's making 220k or she's making like $180k-210

Either way this is the advice they should have been given.

1. Apply for the SAVE (IDR) plan
2. File your taxes in 2024 as Married filing separate, that way you payment is based on just her income.
3. After 2-3 years amend your past returns to married joint. This way you get back the benefits you lost on your taxes. But still have the lower income for payments.

If she's in medical there is a good chance she's at a 403B ie non profit, if not she should consider making a switch. If she is she needs to apply for PSLF.

Totally agree with their advice on the $100k in auto debt though, holy smokes.
That’s the advice that comes with annual subscription. You better sleep with one eye open.
 
He's at it again!

 
What if you paid cash for your vehicles and then took out title loans on them to buy land? 😎

What if the interest rate is under 3%?
 
A while back I participated in a thread about whether Dave Ramsey was irrational in his approach to debt. I couldn't find that thread, so started this one.

I just saw an interview with him about this very point. He acknowledged that as a trained finance guy debt is a reasonable part of finance considerations but folks forget about the added risk of it. He then said his viewpoint on the topic came after his 100% leveraged real estate speculation business failed due to the debt being called in. So, from this, he questioned if anyone should ever have debt. He then acknowledged that he struggled with this because zero use of debt and leverage has a downside too. But the conflict in his mind was resolved when he read the bible and found no evidence supporting the goodness and bounty of debt.

So, my take away. Don't run a 100% leveraged speculative real estate investment business. Don't overreact to that extreme lesson and lose the power of reasonable, limited, and productive use of debt. As a Christian, I will continue to use the bible to tell me how to love my neighbors and not how to plan for retirement savings.

I acknowledge alcohol is dangerous for some people. It doesn't mean we are all best served by being absolutist teetotalers. In the same way, some folks probably are incapable of reasonable use of debt. But for those who are capable, they will be more successful in their finances if they know when/how to use it.

Let the slings and arrows fly.


edit added: I do think Dave does a good job with basic literacy development for a society where few get even the basics, I just wish he didn't go full monty influencer on every point - especially a few like this one that actually hurts a lot of middle Americans if taken literally.
Ramsey offers excellent guidance to those who have been raised to think that debt is just a part of life. Need more like him IMHO. In regards to how his principles apply to sportsman…it’s easy. Take reloading for example. I have way more wants than needs on my bench and only add gear as I can afford over a long period of time. As Dave says…the tortoise always wins
 
He's at it again!

Driving is a rich person's pastime these days.
 

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