Ramsey Fan and Credit Cards

[Chris Virgilio]

Hello everyone, My wife and I are looks to get in to real estate investment within the next year or so. To date we have been Dave Ramsey fans and are totally debt free as of about two weeks ago. Yay! Now we are saving up an emergency fund and should have that finished up by the summer. As I've been learning and researching, reading the forums, attending BP webinars, listening to the podcast, etc, I get the overwhelming impression that investing with an all cash strategy isn't popular, and I have seen the math worked out in several threads. I understand the logic. We are aware of the popularity of leverage in investment, and are trying to decide if we will be able to come to grips with it enough to allow our potential business to utilize it. It's a scary thought for us right now as we are just freshly debt free. As a result, we currently have zero credit cards. My biggest question is this: should we consider getting a credit card in order to keep our existing credit (which is actually quite good) growing in hopes that it will help us find decent loans in the future, or is it something that isn't necessary? I want to get the communities thoughts before pulling the trigger on another debt product. Please be thoughtful in helping us make this decision, as it's not an easy one for us. The reluctance is indescribable.

[Charlie Fitzgerald]

Call Dave and ask him...you already know the answer. :) I think if you want to be an investor AND follow Dave's advice, it will be ve4ry difficult to do. I am a big fan of Dave's teachings and have facilitated many of his Financial Peace University events. At the same time, Dave has an extraordinary benefit that the vast majority of his followers do not have,,,he has the income stream from his products to invest. I think one could still be a debt free investor, if you are willing to start with the very small cash deals you can afford to take down with cash, by saving up the cash needed and doing it. I also think that a group of similar thinking people could form a JV group and pool resources and do the same thing...again using all cash from the parties. Lastly, I think that some of Dave's followers will find themselves too drawn to the potential profits that investing in real estate can bring and they will succumb to the lure of financing of some type to get into the REI world.

So, you need to decide what is important for you and your family and how badly do you want to do what you need to do to reach goals that you set and what are you willing to risk to do it.  Somewhere in there lies your answer...Dave's would be DO NOT BORROW MONEY!  You did not work so hard to get debt free...to go back into debt.