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Posted: 5/8/2024 2:43:38 PM EDT
[#1]
Quote HistoryOriginally Posted By Lou_Daks: I didn't use 5% in my example, I used 4.1%. If you can't get 4.1%, I don't know what to say. Sequence of returns matters, esp. if you are heavily in stocks. For fixed income, SoR matters a whole lot less. That's what I intended to show, and I proved it using standard math - no tricks. It is possible to structure a conservative porfolio that eliminates the SoR risk. OF COURSE inflation matters. It always matters in a 30-year period, regardless of the type of portfolio. That's not the point. At. All. I was responding to a claim by Spidey07 that a portfolio balance will inevitably decline. It's just not true. Go back and read his post. ETA: Here's the EXACT QUOTE: "The 4% withdrawl rate is based on what you can take for 30 years, safely. The principal will go down even at 4%." "Will go down" are words, and words have meaning. |
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Posted: 5/8/2024 2:44:22 PM EDT
[#2]
Quote HistoryOriginally Posted By brasscrossedrifles: A membership on this website is an example of something Dave Ramsey would tell you not to waste money on. Show us where he said that. Maybe he IS a member. |
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Posted: 5/8/2024 2:47:59 PM EDT
[#3]
Quote HistoryOriginally Posted By brasscrossedrifles: A membership on this website is an example of something Dave Ramsey would tell you not to waste money on. Naw, he'd tell you it would come out of the entertainment envelope. |
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Posted: 5/8/2024 2:51:27 PM EDT
[#4]
Quote HistoryOriginally Posted By migradog: Naw, he'd tell you it would come out of the entertainment envelope. Truth. The Never_Daves are out in full force ITT. Isn't it strange how they "quote" the guy but never actually quote him? 
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Posted: 5/8/2024 3:09:04 PM EDT
[#5]
The biggest factor is to only spend what you really need to, you may have hundreds in savings but still buy a newer used car.
I knew millionaires and they all drove what ARFCOM millionaires would call a beater. |
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TX, USA
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Posted: 5/8/2024 3:09:38 PM EDT
[#6]
Quote HistoryOriginally Posted By brasscrossedrifles: A membership on this website is an example of something Dave Ramsey would tell you not to waste money on. Had one and didn’t see the benefit of it myself. I’ll invest my 24 bucks instead. |
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FL, USA
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Posted: 5/8/2024 3:23:35 PM EDT
[#7]
Quote HistoryOriginally Posted By Lou_Daks: Show me the math. Assume a 6% avg. return, which is not hard to do. I agree, some years may be down, but other years will be up. In fact, over 30 years there will be more up years than down years. Historically this is true. If the first few years are down, you could run out way before 30 years. The 4% rule is a simple guideline useful for planning retirement, that’s all it is. |
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Posted: 5/8/2024 3:27:54 PM EDT
[#8]
Quote HistoryOriginally Posted By Lou_Daks: Truth. The Never_Daves are out in full force ITT. Isn't it strange how they "quote" the guy but never actually quote him? Like, why do you hate the guy so much? |
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Posted: 5/8/2024 3:30:24 PM EDT
[#9]
Quote HistoryOriginally Posted By brasscrossedrifles: A membership on this website is an example of something Dave Ramsey would tell you not to waste money on. Quote HistoryOriginally Posted By brasscrossedrifles: Originally Posted By Lou_Daks: Financial claims & advice by someone too cheap to buy a $24 membership are always suspect. A membership on this website is an example of something Dave Ramsey would tell you not to waste money on. 
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Posted: 5/8/2024 3:34:17 PM EDT
[#10]
Quote HistoryOriginally Posted By JamiesGotAGun: It's a weird kind of hate. Like, why do you hate the guy so much? GD hates people far more successful than they are. |
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Posted: 5/8/2024 3:36:39 PM EDT
[#11]
SNL does Dave Ramsey vs GD
 Don't Buy Stuff - Saturday Night Live |
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Posted: 5/8/2024 3:40:45 PM EDT
[#12]
A million dollars in net worth isn't that much anymore.
Especially if you live in any of the higher value housing markets. A half million dollar home is not that uncommon even in Michigan where housing cost are still relatively low compared to the rest of the nation. |
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Posted: 5/8/2024 5:26:45 PM EDT
[#13]
Quote HistoryOriginally Posted By MtnMusic: Helpful hint for Gen Alpha: If you start investing $50/month at the age of 21, and increase that number by $50/month for every year you work, you will have at least couple million when you retire. Time is your ally. As long as the fed keeps printing. |
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Posted: 5/8/2024 5:34:10 PM EDT
[#14]
Quote HistoryOriginally Posted By Lou_Daks: I didn't use 5% in my example, I used 4.1%. If you can't get 4.1%, I don't know what to say. Sequence of returns matters, esp. if you are heavily in stocks. For fixed income, SoR matters a whole lot less. That's what I intended to show, and I proved it using standard math - no tricks. It is possible to structure a conservative porfolio that eliminates the SoR risk. OF COURSE inflation matters. It always matters in a 30-year period, regardless of the type of portfolio. That's not the point. At. All. I was responding to a claim by Spidey07 that a portfolio balance will inevitably decline. It's just not true. Go back and read his post. 5% now or for 30 years of 5%? Everyone is gonna refinance when the rates go down but somehow their investment returns stay the same. Yay! |
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Posted: 5/8/2024 5:41:07 PM EDT
[#15]
Quote HistoryOriginally Posted By Lou_Daks: Financial claims & advice by someone too cheap to buy a $24 membership are always suspect. Quote HistoryOriginally Posted By Lou_Daks: Originally Posted By miseses: We do not have a market for houses, we have a command economy run by the fed and county development boards. Market implies voluntary trade. Instead prices are set violently through, amongst other things, government monetary policy. In fact my building permit makes it a criminal offense to even sell my house, since a single anecdote is your threshold for proof, I have now disputed your thesis. If we actually did have a 'market', I would agree it wouldn't be 'wrong.' The reason why it is looking so wrong is because it is not a market but rather a facade of a market. Financial claims & advice by someone too cheap to buy a $24 membership are always suspect. What about financial claims by a $750 member? Super credible. |
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Posted: 5/8/2024 5:43:05 PM EDT
[Last Edit: spidey07]
[#16]
Quote HistoryOriginally Posted By iwouldntknow: 5% now or for 30 years of 5%? Everyone is gonna refinance when the rates go down but somehow their investment returns stay the same. Yay! Quote HistoryOriginally Posted By iwouldntknow: Originally Posted By Lou_Daks: I didn't use 5% in my example, I used 4.1%. If you can't get 4.1%, I don't know what to say. Sequence of returns matters, esp. if you are heavily in stocks. For fixed income, SoR matters a whole lot less. That's what I intended to show, and I proved it using standard math - no tricks. It is possible to structure a conservative porfolio that eliminates the SoR risk. OF COURSE inflation matters. It always matters in a 30-year period, regardless of the type of portfolio. That's not the point. At. All. I was responding to a claim by Spidey07 that a portfolio balance will inevitably decline. It's just not true. Go back and read his post. 5% now or for 30 years of 5%? Everyone is gonna refinance when the rates go down but somehow their investment returns stay the same. Yay! If you could guarantee me 5% for 30 years with a contract I’d stop working today. No 2 weeks, no nothing. “I’m out! See ya!” |
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Posted: 5/8/2024 5:55:18 PM EDT
[#17]
Quote HistoryOriginally Posted By iwouldntknow: What about financial claims by a $750 member? Quote HistoryOriginally Posted By iwouldntknow: Originally Posted By Lou_Daks: Originally Posted By miseses: We do not have a market for houses, we have a command economy run by the fed and county development boards. Market implies voluntary trade. Instead prices are set violently through, amongst other things, government monetary policy. In fact my building permit makes it a criminal offense to even sell my house, since a single anecdote is your threshold for proof, I have now disputed your thesis. If we actually did have a 'market', I would agree it wouldn't be 'wrong.' The reason why it is looking so wrong is because it is not a market but rather a facade of a market. Financial claims & advice by someone too cheap to buy a $24 membership are always suspect. What about financial claims by a $750 member? 
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Posted: 5/8/2024 6:21:23 PM EDT
[#18]
Quote HistoryOriginally Posted By OregonShooter: 26% of Americans own a house outright. So many of them should be half way there. I thought that number would be higher. Is there a distinction between primary and/or rental (income producing) property? |
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Posted: 5/8/2024 6:25:19 PM EDT
[#19]
Quote HistoryOriginally Posted By midcap: I just noticed my membership ran out...I am gonna reup lol you mean you didn't get notices for weeks prior? what kind of sorcery is this? |
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Posted: 5/8/2024 10:10:31 PM EDT
[#20]
Quote HistoryOriginally Posted By M4ger: I thought that number would be higher. Is there a distinction between primary and/or rental (income producing) property? Quote HistoryOriginally Posted By M4ger: Originally Posted By OregonShooter: 26% of Americans own a house outright. So many of them should be half way there. I thought that number would be higher. Is there a distinction between primary and/or rental (income producing) property? @ M4ger 66% of Americans are homeowners, 40% of homeowners do not have a mortgage. |
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Posted: 5/8/2024 11:05:16 PM EDT
[Last Edit: BillofRights]
[#21]
Quote HistoryOriginally Posted By FALARAK: The best part about making your first million, is noticing how much faster the second million comes along. Quote HistoryOriginally Posted By FALARAK: Originally Posted By Jack-of-Hearts: He ain't lying. But a mil isn't what it used to be.  The best part about making your first million, is noticing how much faster the second million comes along. |
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Posted: 5/9/2024 2:21:02 AM EDT
[#22]
Quote HistoryOriginally Posted By brasscrossedrifles: Ah, yes, the mid-late 70s. Maybe millennials will get off easy and this is just going to be our version of the 70s. (Extreme optimism)  |
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Posted: 5/9/2024 5:21:34 AM EDT
[#23]
Quote HistoryOriginally Posted By godzillamax: Wonder how he (Ramsey) calculates net worth of a teacher's public pension into his overall net worth formula. Quote HistoryOriginally Posted By godzillamax: Originally Posted By Zak406: He calculates net worth as: House+ savings (retirement, brokerage, bank accounts ) - expenses. So if you paid 400 g for your house and owe 200 g you have 200 net worth + retirement and savings Pensions are not part of net worth. They are income, and reduce your need for other retirement assets. Net worth is something you can sell, something you can pass on, etc. My wife gets my pension when I am gone, but my kids won’t. So if we both get hit by a falling satellite tomorrow, the value of that pension is zero. But you can figure out how much a pension will offset your savings needs by just dividing the yearly amount by 0.04, and that number is how much you would need to have to equal it, at a 4% withdrawal rate. Basically if you get a 40k pension, that is 1 million less you need in savings. |
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Posted: 5/9/2024 5:26:32 AM EDT
[#24]
Quote HistoryOriginally Posted By GunLvrPHD: Someone with $2.5 million can live where they like, drive a Lexus, and fly business class. Sure, if you don’t intent it to last a long retirement period. That is 100k a year at the commonly recommended 4% safe withdrawal rate. Not suffering, but not exactly do whatever the hell you want wealth either. |
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Posted: 5/9/2024 5:26:41 AM EDT
[#25]
Quote HistoryOriginally Posted By OregonShooter: @ M4ger 66% of Americans are homeowners, 40% of homeowners do not have a mortgage. I don't know if I believe those numbers. they sound high. |
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Posted: 5/9/2024 5:30:39 AM EDT
[#26]
Quote HistoryOriginally Posted By OregonShooter: Your wife is already a millionaire. The value of her pension exceeds 1 million. Quote HistoryOriginally Posted By OregonShooter: Originally Posted By godzillamax: I'd be interested in seeing the data on teachers and how Ramsey ascertained so many are millionaires in retirement. My wife has been a public middle school teacher for 30 years and has taught in a very affluent school district for the past 17 years. She got her masters degree 20-22 years ago and in 2023 made $95k salary. Fresh grad teachers in her district start around $50-$60k salary. When my wife retires her pension + 403b will make for a nice retirement, but no way will her net worth even remotely be a million dollars (but I guess with a gov pension that depends on how it's valued over the course of her retirement). Your wife is already a millionaire. The value of her pension exceeds 1 million. No, as a pension is not an assent, it is income. Can last for 50 years, or end tomorrow. |
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Posted: 5/9/2024 5:40:54 AM EDT
[Last Edit: tac556]
[#27]
Quote HistoryOriginally Posted By Lou_Daks: You're assuming they have no other income sources to go with that $100k/yr. Most people have SS, pension, etc. Further, the $100k is ONLY if they never want to use the principal (4% Rule). That's not realistic for most. Most will take the $100k + some principal. It's not hard to get to $200k/yr. with all the aforementioned. Most people can live pretty damn well on $200k/yr. Further further, many people continue to have side jobs, even into retirement. So now we're at $200k+. You are confused on how the 4% safe withdrawal rate was determined- it was not about never using any of the principal, it was simply to not run out of money before end of the the determined time frame (30 years I believe?). So if you ended year 30 with $1 in the bank, it was successful… If you never want to touch the principal, you need to either adjust your withdrawals in down years, have a lower fixed withdrawal rate, or die before you hit that number. Thus a safe withdrawal rate is different than a perpetual withdrawal rate, which is what you are talking about. |
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Posted: 5/9/2024 5:47:34 AM EDT
[#28]
Quote HistoryOriginally Posted By Lou_Daks: I don't grok your math - the bolded part. If I buy nothing but CDs at 5%, and only withdraw 4% annually, how does my principal go down? Further, nobody in their right mind only has CDs. Anyone with a lick of sense has some exposure to the broader market. It's not brain surgery to make 6-7%, annually, with modest exposure to the stock market + some stocks and bonds and CDs, over a 30 year period. Given that, how does my principal decline over 30 years if I only withrdraw 4% annually? Well CD’s don’t always pay 5% year after year? Some years are bad years in the market? Look up sequence of return risks. Backtesting, etc. You have about half the information you need it sounds like. Because you have the basics, but are missing how that information was derived, what the constraints are, etc. That can bite you if not careful… |
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Posted: 5/9/2024 6:17:50 AM EDT
[#29]
Quote HistoryOriginally Posted By JamiesGotAGun: It's a weird kind of hate. Like, why do you hate the guy so much? Quote HistoryOriginally Posted By JamiesGotAGun: Originally Posted By Lou_Daks: Truth. The Never_Daves are out in full force ITT. Isn't it strange how they "quote" the guy but never actually quote him? Like, why do you hate the guy so much? Ramsay is good for people to unfuck their finances. Where he fails utterly is in his claims about how much you can spend down from your investments. If you followed his nonsense of pulling 8-10% a year (sometimes he says 12%!), you would be screwed pretty damn quick and going back to work. So he gives folks a very unrealistically low expectation of the number they need to meet for a retirement nest egg total. As already stated, he is good for some things. But his investing advice and retirement spending is flat out dumb- because he is using over simplified math- He says that since the market averages a certain amount, you can take that amount out yearly. It is like he doesn’t even understand what “average” means, or that it is not a constant steady number. Anyone who understands the math knows Ramsay is giving people terrible advice for withdrawals. |
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Posted: 5/9/2024 6:21:39 AM EDT
[#30]
Quote HistoryOriginally Posted By spidey07: If you could guarantee me 5% for 30 years with a contract I’d stop working today. No 2 weeks, no nothing. “I’m out! See ya!” What! You mean today’s high CD rates were NOT the rates of the last few years before inflation? Or that they might not be the rates in a year or 5? No way! Over simplification will fuck you over for sure. But it sure must make some folks feel better I guess. |
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Posted: 5/9/2024 7:25:08 AM EDT
[#31]
Quote HistoryI won't wear any of the pants from the 70s. They can go ahead and just put me in a camp. |
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USA
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Posted: 5/9/2024 7:29:34 AM EDT
[#32]
The dumbest thing he ever said was to not take debt for grad school. When you finish school sooner, you have more years of higher earning power at the end of your career. I used a basic financial calculator years ago to figure that out. And businesses borrow money all the time to expand operations etc. Plenty of businesses leverage debt in their operations and make money; individuals can do the same thing.
I don't carry debt right now, but I've used it before. I once bought a property with credit that had an excellent rate of return. I used zero percent offers on several credit cards to get the cash immediately. I paid the balances down in one year and the only cost was the 3% fee for the loans (Citibank). I sold that property 8 years later at 6X purchase price. I've audited plenty of banks, and performed loan review. Here's a news flash, Dave; there are developers and builders and other businessmen borrowing money ALL THE TIME. They are making money hand over fist. |
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Posted: 5/9/2024 8:55:32 AM EDT
[#33]
Quote HistoryOriginally Posted By ricky_45: The dumbest thing he ever said was to not take debt for grad school. When you finish school sooner, you have more years of higher earning power at the end of your career. I used a basic financial calculator years ago to figure that out. And businesses borrow money all the time to expand operations etc. Plenty of businesses leverage debt in their operations and make money; individuals can do the same thing. I don't carry debt right now, but I've used it before. I once bought a property with credit that had an excellent rate of return. I used zero percent offers on several credit cards to get the cash immediately. I paid the balances down in one year and the only cost was the 3% fee for the loans (Citibank). I sold that property 8 years later at 6X purchase price. I've audited plenty of banks, and performed loan review. Here's a news flash, Dave; there are developers and builders and other businessmen borrowing money ALL THE TIME. They are making money hand over fist. School loans used to be a no brainer investment into yourself. 20 years ago, if you just finished a degree program, it was a sound investment. Now it really depends. Schools are ripping people off for worthless or near worthless degrees. Even a lot of degrees that get you a higher wage aren't worth the debt, when you do the math. Just look at all the crying over the college debt "crisis" While it is case to case, for a lot of people, telling them not too take the loan, is the right answer. |
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GA, USA
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Posted: 5/9/2024 9:17:20 AM EDT
[#34]
Quote HistoryOriginally Posted By Missilegeek: School loans used to be a no brainer investment into yourself. 20 years ago, if you just finished a degree program, it was a sound investment. Now it really depends. Schools are ripping people off for worthless or near worthless degrees. Even a lot of degrees that get you a higher wage aren't worth the debt, when you do the math. Just look at all the crying over the college debt "crisis" While it is case to case, for a lot of people, telling them not too take the loan, is the right answer. I got my degree in Respiratory Therapy 20yr ago. Back then and still these sort of degrees offer a good return on investment. 2 year community college degree with 100% job placement anywhere in the country at hospitals with things like 401k and working indoors. But tech, man. I started in the tech space as a hobby. Now I have a job making 4x as much as a respiratory therapist and I didn't need a degree or any certs to do it. I have a couple family members now taking some 12week online classes for medical coding. Its a couple grand for the program, including books and instructor time. They even let you finance it with Affirm @ 0%  . At the end, you take a test and get a few letters after your name and you're setup to start a career.
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Posted: 5/9/2024 9:43:44 AM EDT
[#35]
Quote HistoryOriginally Posted By ricky_45: The dumbest thing he ever said was to not take debt for grad school. When you finish school sooner, you have more years of higher earning power at the end of your career. I used a basic financial calculator years ago to figure that out. And businesses borrow money all the time to expand operations etc. Plenty of businesses leverage debt in their operations and make money; individuals can do the same thing. I don't carry debt right now, but I've used it before. I once bought a property with credit that had an excellent rate of return. I used zero percent offers on several credit cards to get the cash immediately. I paid the balances down in one year and the only cost was the 3% fee for the loans (Citibank). I sold that property 8 years later at 6X purchase price. I've audited plenty of banks, and performed loan review. Here's a news flash, Dave; there are developers and builders and other businessmen borrowing money ALL THE TIME. They are making money hand over fist. They're not his target audience. Exceptions to every rule etc. |
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TN, USA
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Posted: 5/9/2024 10:10:10 AM EDT
[#36]
Dave Ramsey is good for getting out of debt.
After that, you shouldn't listen to him. |
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Posted: 5/9/2024 10:18:02 AM EDT
[#37]
Quote HistoryOriginally Posted By migradog: They're not his target audience. Exceptions to every rule etc. Quote HistoryOriginally Posted By migradog: Originally Posted By ricky_45: The dumbest thing he ever said was to not take debt for grad school. When you finish school sooner, you have more years of higher earning power at the end of your career. I used a basic financial calculator years ago to figure that out. And businesses borrow money all the time to expand operations etc. Plenty of businesses leverage debt in their operations and make money; individuals can do the same thing. I don't carry debt right now, but I've used it before. I once bought a property with credit that had an excellent rate of return. I used zero percent offers on several credit cards to get the cash immediately. I paid the balances down in one year and the only cost was the 3% fee for the loans (Citibank). I sold that property 8 years later at 6X purchase price. I've audited plenty of banks, and performed loan review. Here's a news flash, Dave; there are developers and builders and other businessmen borrowing money ALL THE TIME. They are making money hand over fist. They're not his target audience. Exceptions to every rule etc. This is important to remember. We know there are exceptions, and I’m sure he does, too. But he can’t go on the radio and start talking about exceptions to those rules, because then every person that needs his advice Would think they’re the exception |
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Posted: 5/9/2024 11:00:42 AM EDT
[#38]
Quote HistoryOriginally Posted By miseses: The problem though is the houses just got locked up in 30 year, negative real interest rate mortgages that can't be rolled over by the property owner into an identical loan on the same purchase. The "market" in this case is fed policies that pinned interest rates to zero, policies that locked this in for 30 years, then fed wildly swinging interest rates the other direction creating an irreversible lock-up effect. Thus you have to buy them out of that opportunity cost to buy their house. The result? What we see now, unbudgeable prices even as sales drop way down. If you don't offer enough money to buy out the money printer of negative real interest rates, homeowners can and will just wait it out for 30 years. You can pretty much put a fork in it for the current generation of first time home buyers, they're gonna either have to reverse the zoning/code regulations to let them get affordable prefabs or something or find some other way around buying the current housing stock. Quote HistoryOriginally Posted By miseses: Originally Posted By Lou_Daks: Originally Posted By DDalton: If there's enough of those boomer estate homes (surplus), the prices could go down. Heirs don't always want to fix up homes and be patient to wait for the highest offer, either. This is correct. The market is never wrong. I'm old enough to have seen several cycles in RE, which are very long. A home I bought in 1989 for $270k went to $225k a couple years later. That's a 17% drop if my maths is correct. The problem though is the houses just got locked up in 30 year, negative real interest rate mortgages that can't be rolled over by the property owner into an identical loan on the same purchase. The "market" in this case is fed policies that pinned interest rates to zero, policies that locked this in for 30 years, then fed wildly swinging interest rates the other direction creating an irreversible lock-up effect. Thus you have to buy them out of that opportunity cost to buy their house. The result? What we see now, unbudgeable prices even as sales drop way down. If you don't offer enough money to buy out the money printer of negative real interest rates, homeowners can and will just wait it out for 30 years. You can pretty much put a fork in it for the current generation of first time home buyers, they're gonna either have to reverse the zoning/code regulations to let them get affordable prefabs or something or find some other way around buying the current housing stock. That’s true, assuming the standard One house per (non-divorcing) couple, and assuming that couple doesn’t have to move for work, or Die. That’s a luxury less than half of us get. Additionally, many houses are owned by investors, who panic easily. Currently, I’m shopping in God’s Waiting-room. The golden girls would love to wait it out another 30 years, but they won’t have that opportunity. Mother nature has strict rules about that. The Next of Kin will sell it faster than you can say CTD -30% Off. 
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GA, USA
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Posted: 5/9/2024 11:28:16 AM EDT
[#39]
Quote HistoryOriginally Posted By BillofRights: Currently, I’m shopping in God’s Waiting-room. The golden girls would love to wait it out another 30 years, but they won’t have that opportunity. Mother nature has strict rules about that. The Next of Kin will sell it faster than you can say CTD -30% Off. This is how I got both of my houses. 10/10, great experience. The first one, I bought it from the old lady who had it built back in 1979. 1 owner, well taken care of, and the house had not been a dozen random peoples' DIY HGTV wannabe projects. She was going off to the nursing home, and I swooped in and took it off her hands. Second house, I was going for a walk and noticed the elderly neighbor lady had put a for sale sign up. I knocked on her door and got that ball rolling. Similar story. She'd been in the house for decades and raised her family there. They were all grown up and moved out. The house was in good shape, but too big for her and she had trouble with the stairs. When I put in my offer, it included a dollar amount, but also 3 pans of home made banana bread. Both well-off little old ladies' husbands had died off decades ago. They were living alone. Their houses were probably some of the best taken care of you could ask for. |
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Posted: 5/9/2024 11:42:15 AM EDT
[#40]
Quote HistoryOriginally Posted By giantpune: This is how I got both of my houses. 10/10, great experience. The first one, I bought it from the old lady who had it built back in 1979. 1 owner, well taken care of, and the house had not been a dozen random peoples' DIY HGTV wannabe projects. She was going off to the nursing home, and I swooped in and took it off her hands. Second house, I was going for a walk and noticed the elderly neighbor lady had put a for sale sign up. I knocked on her door and got that ball rolling. Similar story. She'd been in the house for decades and raised her family there. They were all grown up and moved out. The house was in good shape, but too big for her and she had trouble with the stairs. When I put in my offer, it included a dollar amount, but also 3 pans of home made banana bread. Both well-off little old ladies' husbands had died off decades ago. They were living alone. Their houses were probably some of the best taken care of you could ask for. Quote HistoryOriginally Posted By giantpune: Originally Posted By BillofRights: Currently, I’m shopping in God’s Waiting-room. The golden girls would love to wait it out another 30 years, but they won’t have that opportunity. Mother nature has strict rules about that. The Next of Kin will sell it faster than you can say CTD -30% Off. This is how I got both of my houses. 10/10, great experience. The first one, I bought it from the old lady who had it built back in 1979. 1 owner, well taken care of, and the house had not been a dozen random peoples' DIY HGTV wannabe projects. She was going off to the nursing home, and I swooped in and took it off her hands. Second house, I was going for a walk and noticed the elderly neighbor lady had put a for sale sign up. I knocked on her door and got that ball rolling. Similar story. She'd been in the house for decades and raised her family there. They were all grown up and moved out. The house was in good shape, but too big for her and she had trouble with the stairs. When I put in my offer, it included a dollar amount, but also 3 pans of home made banana bread. Both well-off little old ladies' husbands had died off decades ago. They were living alone. Their houses were probably some of the best taken care of you could ask for. That second story reminded me of how I bought my first house. A nice old couple had raised 6 boys in this little 3 bedroom, one bathroom house. The old guy had Just put out the sign, and I stopped by an hour later and said I’ll take it! $78,000. He was kind of taken aback, it was so sudden. |
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Posted: 5/9/2024 3:28:33 PM EDT
[#41]
Quote HistoryOriginally Posted By ricky_45: The dumbest thing he ever said was to not take debt for grad school. When you finish school sooner, you have more years of higher earning power at the end of your career. I used a basic financial calculator years ago to figure that out. And businesses borrow money all the time to expand operations etc. Plenty of businesses leverage debt in their operations and make money; individuals can do the same thing. I don't carry debt right now, but I've used it before. I once bought a property with credit that had an excellent rate of return. I used zero percent offers on several credit cards to get the cash immediately. I paid the balances down in one year and the only cost was the 3% fee for the loans (Citibank). I sold that property 8 years later at 6X purchase price. I've audited plenty of banks, and performed loan review. Here's a news flash, Dave; there are developers and builders and other businessmen borrowing money ALL THE TIME. They are making money hand over fist. 
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Posted: 5/9/2024 3:51:36 PM EDT
[#42]
Quote HistoryThis meme isn't really applicable here unless Dave Ramsey has stated he understands some people will come out ahead if they take out loans to get a STEM degree. |
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Posted: 5/9/2024 4:06:24 PM EDT
[Last Edit: Lou_Daks]
[#43]
Quote HistoryOriginally Posted By tac556: Well CD’s don’t always pay 5% year after year? Some years are bad years in the market? Look up sequence of return risks. Backtesting, etc. You have about half the information you need it sounds like. Because you have the basics, but are missing how that information was derived, what the constraints are, etc. That can bite you if not careful… You have about half of the reading comprehension you need sounds like. Look back at my previous post, you'll see I already discussed Sequence of Return risk. It's a thing. But, it's only a thing re: stock. Bonds, CDs have no SoR risk. They pay out for their entire maturity at the stated % return. Further, the more $ you have in stock, the greater the SoR risk. OTOH, there are ways to mitigate this risk. One, is to be flexible enough to be able to take less than the 4% (or whatever) in down years. Say, 3.8% or whatever. Two, is to be invested primarily in fixed-return investments such as CDs and bonds, and dividend-paying stock during retirement. Not coincidentally, every retirement manager worth his salt recommends this strategy for retirees. That's why I provided an example above WITH THE ACTUAL MATH to prove it. If the withdrawal rate is 4%, and you get a measly 4.1% return, you can withdraw slightly more than $100k each successive year, and the account balance will actually grow modestly, leaving any heirs $2.5M+ after 30 years. That's pretty damned impressive. This isn't magic or snake oil, it's basic math. Notice that nobody has challenged my example because it's 100% correct. It's not that hard to make 4.1%. The risk comes in for people trying to make more, and taking more risk, BECAUSE THEY DIDN'T START EARLY ENOUGH and they are playing catch-up. Starting early is key - time in the market etc. is a very real thing. I started in my 20s, about a half century ago. I'm a living, breathing example of how it works. Further, SoR works both ways. If the market is up nicely for the first few years of retirement, you can take more than the 4% (or whatever), and the account balance at the end of the 30 years could be even larger if you stick with the plan. |
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Posted: 5/9/2024 4:10:02 PM EDT
[#44]
Quote HistoryOriginally Posted By DDalton: This is important to remember. We know there are exceptions, and I’m sure he does, too. But he can’t go on the radio and start talking about exceptions to those rules, because then every person that needs his advice Would think they’re the exception Here's the relevant Q to ask wrt Ramsey. If Americans, generally, followed his advice, would America be: A: Better off. B: Worse off. If someone can't answer that honestly, that tells us more about them than it does about him. |
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Posted: 5/9/2024 4:11:22 PM EDT
[#45]
Quote HistoryI like that meme. I would add, "after I paid off his student loan for a degree in 3rd century poetry". |
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Posted: 5/9/2024 4:13:38 PM EDT
[#46]
Quote HistoryOriginally Posted By brasscrossedrifles: This meme isn't really applicable here unless Dave Ramsey has stated he understands some people will come out ahead if they take out loans to get a STEM degree. I have actually heard Ramsey say that exact thing: People shouldn't take out loans for stupid degrees. I have also heard him say numerous times that borrowing to improve your economic value (aka a worthwhile degree) is money well spent. Anyone who says differently is lying, or just a Never_Dave. |
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Posted: 5/9/2024 4:20:26 PM EDT
[#47]
Quote HistoryOriginally Posted By brasscrossedrifles: I won't wear any of the pants from the 70s. They can go ahead and just put me in a camp.  M.C. Hammer - U Can't Touch This |
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IL, USA
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Posted: 5/9/2024 4:22:38 PM EDT
[#48]
Quote HistoryOriginally Posted By Kingstrider: Lol teacher what is that guy smoking? Most teachers I know don't make squat. Are you kidding around here ( central il ) they make bank AND only work 9 month and have a pension. |
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USA
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Posted: 5/9/2024 4:27:27 PM EDT
[Last Edit: miseses]
[#49]
Quote HistoryOriginally Posted By BillofRights: That’s true, assuming the standard One house per (non-divorcing) couple, and assuming that couple doesn’t have to move for work, or Die. That’s a luxury less than half of us get. Additionally, many houses are owned by investors, who panic easily. Currently, I’m shopping in God’s Waiting-room. The golden girls would love to wait it out another 30 years, but they won’t have that opportunity. Mother nature has strict rules about that. The Next of Kin will sell it faster than you can say CTD -30% Off. Quote HistoryOriginally Posted By BillofRights: Originally Posted By miseses: Originally Posted By Lou_Daks: Originally Posted By DDalton: If there's enough of those boomer estate homes (surplus), the prices could go down. Heirs don't always want to fix up homes and be patient to wait for the highest offer, either. This is correct. The market is never wrong. I'm old enough to have seen several cycles in RE, which are very long. A home I bought in 1989 for $270k went to $225k a couple years later. That's a 17% drop if my maths is correct. The problem though is the houses just got locked up in 30 year, negative real interest rate mortgages that can't be rolled over by the property owner into an identical loan on the same purchase. The "market" in this case is fed policies that pinned interest rates to zero, policies that locked this in for 30 years, then fed wildly swinging interest rates the other direction creating an irreversible lock-up effect. Thus you have to buy them out of that opportunity cost to buy their house. The result? What we see now, unbudgeable prices even as sales drop way down. If you don't offer enough money to buy out the money printer of negative real interest rates, homeowners can and will just wait it out for 30 years. You can pretty much put a fork in it for the current generation of first time home buyers, they're gonna either have to reverse the zoning/code regulations to let them get affordable prefabs or something or find some other way around buying the current housing stock. That’s true, assuming the standard One house per (non-divorcing) couple, and assuming that couple doesn’t have to move for work, or Die. That’s a luxury less than half of us get. Additionally, many houses are owned by investors, who panic easily. Currently, I’m shopping in God’s Waiting-room. The golden girls would love to wait it out another 30 years, but they won’t have that opportunity. Mother nature has strict rules about that. The Next of Kin will sell it faster than you can say CTD -30% Off. Yeah there is some truth to that. When An elderly family member of mine died the relatives sold it for like 2/3 of what the flipper got for it a few months later. I built my house myself from nothing for less than the amount of money they lost out on that deal. A bit depressing to think about. Boomers by and large have no real understanding of the value of houses and money. Why would they, they regulated the fuck out of housing to stack the deck. They got in on the loose zoning and building codes, then tightened them down to damn their children and constrain supply. Then when they inherited houses they fire sold them to flippers. I pulled myself up by my bootstraps but it was definitely depressing watching boomer family members fireselling inherited houses just dropped in their lap and losing all that money while I slave away and spend time away from my family while gathering scraps to build property from raw land just so we have a shack to live on. |
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Posted: 5/9/2024 4:31:14 PM EDT
[#50]
Quote HistoryOriginally Posted By Lou_Daks: I have actually heard Ramsey say that exact thing: People shouldn't take out loans for stupid degrees. I have also heard him say numerous times that borrowing to improve your economic value (aka a worthwhile degree) is money well spent. Anyone who says differently is lying, or just a Never_Dave. I never heard him say the second part. I'll take for granted that he did. |
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