Who Is Dave Ramsey?
Dave Ramsey is a personal finance guru and media personality. At the age of 26, Dave Ramsey was bringing home a quarter of a million dollars a year and had a $4 million real estate portfolio. Two years later he lost everything. Today Ramsey, 60, has rebuilt an even larger fortune and is one of America’s most trusted sources for financial advice. His syndicated radio program, The Dave Ramsey Show, is among the top five talk radio shows in the United States teaching about prosperity and is heard by 13 million listeners each week on more than 600 radio stations, according to Ramsey's website.
What is Dave Ramsey's Philosophy?
Ramsey is transparent about his investment style. He encourages his followers to avoid investing in individual stocks and purchase mutual funds that have a long track record of good performance. Personally, his equity investments are allocated into four types of mutual funds: growth, growth and income, aggressive growth, and international.
Besides mutual funds, Ramsey owns a portfolio of rental properties. His real estate investment philosophy is based on acquiring properties without the use of debt financing.
Dave Ramsey has come a long way since filing for personal bankruptcy in his early years. With his estimated net worth of $200 million, he's living proof that anyone can turn a bad financial situation around. Ramsey made his first million, lost it, and then rebuilt an even larger fortune in a relatively short period.
Dave Ramsey's Top Takeaways
- Dave Ramsey is a well-known financial guru and author with a nationally syndicated radio show and other media presence.
- Before becoming a financial pundit, Ramsey saw both early success and bankruptcy.
- Ramsey employs Christian values to help convey his message of financial prudence and saving.
- Dave Ramsey is transparent about his investment style, and he encourages his followers to avoid investing in individual stocks and purchase mutual funds with a long track record of good performance.
- Ramsey's net worth is estimated to be around $200 million as of 2021.
The Ramsey Show
Dave Ramsey's financial philosophy centers on staying out of debt and building savings. When it comes to paying off debt, Ramsey preaches the debt snowball method. The snowball method involves paying off your smallest debts first and then moving on to your biggest debts.
Ramsey Personalities recognize their public platform is a privilege. They are passionate about sharing biblically based, commonsense education to empower the real heroes – audience members, show listeners and book readers – to take control of their lives.
Dave Ramsey Reviews
As we always say, anytime you're taking financial advice from ANYONE there are going to be critics. Part of this reason, that every financial advisor knows, is that financial strategies have to be tailored to each and every individual based on a lot of factors like their risk tolerance, assets, experience, etc. Hence Dave Ramsey is no exception to some bad reviews. No one credible has gone as far as to call him a scam but here are seven critiques about his philosophy:
1. “You’ll earn 12 percent in the stock market.”
2. Problems with Dave Ramsey and his high-fee mutual funds.
3. Ramsey does not make room for asset allocation outside the stock market.
4. Dave Ramsey is wrong about whole life insurance.
5. Dave Ramsey advice ignores opportunity cost.
6. The Dave Ramsey plan does not differentiate between good and bad debt.
7. Dave Ramsey is wrong to encourage people to simply forget their credit score.
8. The Dave Ramsey method (read style) isn’t for everyone.
9. The debt snowball can be inefficient.
The bottom line: Ramsey may have done as much as anyone else to motivate Americans to get out of debt and start saving. Ramsey’s advice makes for good radio, but that doesn’t make his investment advice solid. Any competent advisor or fee-based planner could poke holes in Ramsey’s recommendations. Perhaps The Balance says it best… while Ramsey’s talk radio show can provide some “good tips… investors would be wise to understand the difference between entertainment and sound investment practices.”
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