What’s with the Dave Ramsey haters?

[Brian Ellis]

Over the years of being involved in REI, I have seen so many people bashing Dave Ramsey.

I don’t understand why it is impossible for people to see some value in what he’s teaching. I don’t even think he’s targeting a Biggerpockets type of audience. I think it is bad misinformation to the newbie looking to get his/her first deal, when you say Dave Ramsey doesn’t know what he’s talking about. You need to have your finances in order First.

If you’re investing in real estate already, chances are Dave Ramseys total money makeover is irrelevant. And at some point you have already implemented some of what he’s teaching.

I only bring this up because it was one of the first books I read. I was making minimum wage at the time, bringing home $300 a week, smoking two packs of cigarettes a day, drinking 3 coffees a day, spending money on scratch tickets and blowing money on card games. I had been clean for about 3 months and just barely able to pay my weekly rent at a sober house. 

I read that book and it STARTED to change my life financially. Maybe it did change it completely. But I started paying off my debt, I started saving what I could, and eventually I was able to purchase my first home. I quit cigarettes, I quit gambling, I started making coffee at home, and eventually I became responsible with money. Fast forward a few years and I was able to buy my first house. THEN I implemented what is taught in Rich Dad Poor Dad. Somewhere along the way I understood what kiwosaki was teaching, and I have since been able to scale to 4 properties over the course of 5 years since getting that first property. I’ve used debt (from equity) to scale. But im financially responsible now, I still implement what Dave teaches. Having reserves in place, and not carrying credit card debt. I still carry those same quality’s I first learned. 

My point is I don’t think it is bad practice to understand the basics, especially if you are first starting out. So don’t completely disregard what is being taught in total money makeover. Not everyone is privileged with a high paying W2 job.

Just my 2 cents on the subject.

[Neil Goradia]

Not sure about Dave Ramsey specifically, but many people feel that financial advice gurus like him, Suzy Orman, etc just cater to those that are content to work a 9-5 and don't consider investing in other things like real estate as a way out of the rat race. I have found I can pick up a few things here or there but largely feel they miss the mark. Advising people to try and hit some magic retirement number is my biggest pet peeve. They should be teaching concepts of creating passive income instead in my opinion but that info isn't for the masses.

[Brian Ellis]

Quote from @Neil Goradia:

Not sure about Dave Ramsey specifically, but many people feel that financial advice gurus like him, Suzy Orman, etc just cater to those that are content to work a 9-5 and don't consider investing in other things like real estate as a way out of the rat race. I have found I can pick up a few things here or there but largely feel they miss the mark. Advising people to try and hit some magic retirement number is my biggest pet peeve. They should be teaching concepts of creating passive income instead in my opinion but that info isn't for the masses.

I agree when it pertains to real estate. But I don't think he's catering to the real estate investor, which is surprising to me when I hear his name so much around here. He's not saying "don't invest in real estate". In fact he considers mortgage debt being completely ok as long as it's affordable. There are many avenues to create wealth, and I don't think 401k, Roth IRA and savings is a bad idea for the long haul. But he is also teaching fundamentals in regards to being responsible with money.

You see so many people just tossing around equity lines of credit and high interest rate loans. We’ve been in such an inflated market since 2017, it’s easy for everyone to say Daves advice is stupid when we’ve been handed a bull market for as long as we have. 

[Brian Ellis]

Quote from @Brian Ellis:

Quote from @Neil Goradia:

Not sure about Dave Ramsey specifically, but many people feel that financial advice gurus like him, Suzy Orman, etc just cater to those that are content to work a 9-5 and don't consider investing in other things like real estate as a way out of the rat race. I have found I can pick up a few things here or there but largely feel they miss the mark. Advising people to try and hit some magic retirement number is my biggest pet peeve. They should be teaching concepts of creating passive income instead in my opinion but that info isn't for the masses.

I agree when it pertains to real estate. But I don't think he's catering to the real estate investor, which is surprising to me when I hear his name so much around here. He's not saying "don't invest in real estate". In fact he considers mortgage debt being completely ok as long as it's affordable. There are many avenues to create wealth, and I don't think 401k, Roth IRA and savings is a bad idea for the long haul. But he is also teaching fundamentals in regards to being responsible with money.

You see so many people just tossing around equity lines of credit and high interest rate loans. We’ve been in such an inflated market since 2017, it’s easy for everyone to say Daves advice is stupid when we’ve been handed a bull market for as long as we have. 

 Also with historically low interest rates. I guess my point is, that the fundamentals he is teaching is actually extremely beneficial to the real estate investor. 

[Jay Hinrichs]

more people followed him the better off the whole country would be.  Not everyone wants to be a real estate landlord. Its just here at BP were this is the main theme of this site. there are plenty of ways to get ahead without owning rentals as well. 

[Brian Ellis]

Quote from @Jay Hinrichs:

more people followed him the better off the whole country would be.  Not everyone wants to be a real estate landlord. Its just here at BP were this is the main theme of this site. there are plenty of ways to get ahead without owning rentals as well. 

I agree. He’s targeted as some bad dude. His book personally put me on a path of success. I just use real estate as another source of building wealth. 

[Jay Hinrichs]

to expound a little..  rentals is just a small business and sometimes people grow their small business into a large business.

the same can be done with any number of small business enterprises and many are ( at least cash flow wise) much better than rentals .  

Just think of all the small business's out there in America  people working for themselves creating wealth .  Many ways to skin this cat. 

[Brian Ellis]

@Jay Hinrichs so I wonder why he is thrown around here as being a bad influencer? 

You know when my life changed completely? As soon as I paid off my debt. It opened up many doors for me, and the first door it opened was the ability to buy a house. That house alone has brought my net worth from 15k to 500k in 5 years. But I never would have been in a position to buy it in the first place if I didn’t follow the “baby steps” he talks about. 

[Jay Hinrichs]

Quote from @Brian Ellis:

@Jay Hinrichs so I wonder why he is thrown around here as being a bad influencer? 

You know when my life changed completely? As soon as I paid off my debt. It opened up many doors for me, and the first door it opened was the ability to buy a house. That house alone has brought my net worth from 15k to 500k in 5 years. But I never would have been in a position to buy it in the first place if I didn’t follow the “baby steps” he talks about. 

 not sure who is haters are .. I like him.. my daughter and son follow him religiously.  both of them own homes and rentals and have Zero debt and 800 plus ficos with no help from Dad..  

I also see this in people that I met early in my RE sales carrer ( clients of mine) and my wealthy ones would always talk about having zero debt.. Remember when I brokered the highest priced SFR in my little town ( 425k) and my client paid cash I could not imagine who had that kind of cash.. he was retired at 45 and owned 3 goodyear tire shops and was in the NO debt camp.. another partner of mine owned garbage companies and recycle facilities NO debt. his balance sheet was all assets everything paid for Millions in high end real estate Napa Valley Lake Tahoe hunting ranchs in N. CA Grnated he had corporate debt ( his garbage trucks and all the bins) that was in the multi millions of course.

But I get it we all have to start somewhere and leverage is very important part of growing a real estate portfolio but from my vantage point there is also nothing wrong with owning real estate free and clear.  I know I am in the vast minority on this site as it relates to leverage but I am also older than many. 

[Brian Ellis]

Quote from @Jay Hinrichs:

Quote from @Brian Ellis:

@Jay Hinrichs so I wonder why he is thrown around here as being a bad influencer? 

You know when my life changed completely? As soon as I paid off my debt. It opened up many doors for me, and the first door it opened was the ability to buy a house. That house alone has brought my net worth from 15k to 500k in 5 years. But I never would have been in a position to buy it in the first place if I didn’t follow the “baby steps” he talks about. 

 not sure who is haters are .. I like him.. my daughter and son follow him religiously.  both of them own homes and rentals and have Zero debt and 800 plus ficos with no help from Dad..  

I also see this in people that I met early in my RE sales carrer ( clients of mine) and my wealthy ones would always talk about having zero debt.. Remember when I brokered the highest priced SFR in my little town ( 425k) and my client paid cash I could not imagine who had that kind of cash.. he was retired at 45 and owned 3 goodyear tire shops and was in the NO debt camp.. another partner of mine owned garbage companies and recycle facilities NO debt. his balance sheet was all assets everything paid for Millions in high end real estate Napa Valley Lake Tahoe hunting ranchs in N. CA Grnated he had corporate debt ( his garbage trucks and all the bins) that was in the multi millions of course.

But I get it we all have to start somewhere and leverage is very important part of growing a real estate portfolio but from my vantage point there is also nothing wrong with owning real estate free and clear.  I know I am in the vast minority on this site as it relates to leverage but I am also older than many. 

 I would only hope I could get to a place of being completely debt free. I understand the importance of using leverage. In fact it’s the only way I’ve been able to grow. 

But I don’t think Dave Ramsey is saying not to use calculated risks, or leverage in real estate. He is saying don’t buy a house you can’t afford. And don’t leverage what you can’t afford. 

I had just seen a post on IG from a BP member and it rubbed me the wrong way. I would just hate for people to expect leverage to solve all their problems, when the main problem of being financially irresponsible isn’t being addressed first. 

[Justin Melendez]

I couldn’t agree more with this post lol. Don’t get bent out of shape about it. All that matters is you take/learn the lessons from the people and scenarios that apply to you and your goals…the rest is noise!

[Tony Kim]

Quote from @Brian Ellis:

Quote from @Neil Goradia:

Not sure about Dave Ramsey specifically, but many people feel that financial advice gurus like him, Suzy Orman, etc just cater to those that are content to work a 9-5 and don't consider investing in other things like real estate as a way out of the rat race. I have found I can pick up a few things here or there but largely feel they miss the mark. Advising people to try and hit some magic retirement number is my biggest pet peeve. They should be teaching concepts of creating passive income instead in my opinion but that info isn't for the masses.

I agree when it pertains to real estate. But I don't think he's catering to the real estate investor, which is surprising to me when I hear his name so much around here. He's not saying "don't invest in real estate". In fact he considers mortgage debt being completely ok as long as it's affordable. There are many avenues to create wealth, and I don't think 401k, Roth IRA and savings is a bad idea for the long haul. But he is also teaching fundamentals in regards to being responsible with money.

You see so many people just tossing around equity lines of credit and high interest rate loans. We’ve been in such an inflated market since 2017, it’s easy for everyone to say Daves advice is stupid when we’ve been handed a bull market for as long as we have. 

It's a similar dynamic to the wealth planners who never recommend real estate investing or being a landlord. They simply won't make much money off you if you decide to allocate a large portion of your wealth to directly owned real estate. And for that same reason, I see a lot of folks here bashing 401k's and other more traditional ways of building your wealth. They would rather you entrust your money with them in their syndication deals or diamond in the rough SFR's they want to sell you.

And then you also have the refi/finance till you die crowd here that will tell you to avoid the dreaded dead equity like the plague. Dave Ramsey's advice goes completely contrary to that philosophy. If any of your property makes any equity gains, you can't just sit around and do nothing because you'll be missing out on some new incredible opportunities to borrow more money. Can't let that dead equity degrade your IRR. 😉

[Jon Kelly]

@Brian Ellis I understand what you're saying, but I disagree with the post. "Why is it impossible for people to see some value in what he's teaching..." 

Dave Ramsey has hundreds of thousands, probably millions, of people that follow his advice. There's a lot of value in what he says. Of course he isn't for everybody though.  

Kind of the world we live in these days. Just because you read a few negative posts doesn't mean that's what everybody thinks. 

(Note: I'm a big believer in leveraging debt, but I still see the value it what Dave Ramsey preaches) 

[Jim K.]

I like Dave Ramsey, and I follow many of his recommendations very carefully in my personal life.

I suspect the easiest explanation for the occasional disparaging remarks about him here and elsewhere, @Brian Ellis, is that there's a lot of wishful thinking in REI. I really think that Dave Ramsey's genius is in speaking to people who start out with very little and a lot of inherited bad money habits. This very accurately used to describe me.

[Dell J.]

if your in debt and have poor financial habits Dave Ramsey can be the best thing for you.

If you are already investing and have a higher level of financial literacy. already cash flow positive,  already have a great credit score, then Dave may not have much to offer you.

I dont hate him and i understand why people follow him.   ITs just not for me.

I think we put too much emphasis on what someone else says you should do.   ONe person would tell you dont go in debt for an investment another person would tell you the opposite.

Really, each individual needs to think for themselves.  Each individual needs to look at their investment approach and decide what is best for them and their lifestyle.   A guru cant answer that question for you

[Brian Ellis]

Quote from @Dell J.:

if your in debt and have poor financial habits Dave Ramsey can be the best thing for you.

If you are already investing and have a higher level of financial literacy. already cash flow positive,  already have a great credit score, then Dave may not have much to offer you.

I dont hate him and i understand why people follow him.   ITs just not for me.

I think we put too much emphasis on what someone else says you should do.   ONe person would tell you dont go in debt for an investment another person would tell you the opposite.

Really, each individual needs to think for themselves.  Each individual needs to look at their investment approach and decide what is best for them and their lifestyle.   A guru cant answer that question for you

 I understand what you’re saying. I also use leverage. I’m a fan of it. But not with credit card debt, a financed vehicle, or without reserves in place. 

My perspective is coming from a place of helping the person who doesn’t really know where to start. I think the fundamentals gets overlooked far to often