this post was submitted on 12 Apr 2024
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I lost all respect for Ramsey when I came across a video of him saying he wouldn't take a 0% interest million dollar loan. His opinions on finance are outrageous and dumb.
His whole thing is being anti-debt which is probably good for some people, but some people already have no debt
Yea. I have managed to never carried debt. Without that, what’s this guy got to offer me? In fact, the only thing the guy has to offer is the simplest financial advice there is: spend less than you earn.
But then a poor person comes along and says they can’t and his only advice is ‘earn more money’. Because it’s that easy, obv.
The guy is an out of touch chode who had some privileged upper middle class kid think he was the financial messiah once for saying ‘use a budget’ and let that go to his head.
For some people "use a budget" is revolutionary advice. Most people don't literally track every dollar they spend, although apps and software make it much easier now.
Some middle class and wealthy people make a decent amount of money but spend it all on leasing a few luxury cars and going on vacation. These are the people who "budgeting" works for.
They literally cut back on eating out and save $500 - $1000 per month ("cut back", not eliminate). They end a lease and save an extra $1000. They use this money to pay off their $50K credit card debt and it's eliminated in less than 3 years.
Exactly. That’s who his advice is for, but he markets himself as a guru to the poor and they gobble his bullshit right up and spend all their money on his financial peace university that’s just a book full of anecdotes of wealthy people learning how to do what the poors have been forced to do all along.
True. Most poor people are pretty good at managing money because they are forced to. They just don't have any money to manage.
Thing is, this advice is useless to anyone who straight up has no money and the rich legitimately don't understand that situation.
It's only free money if you invest it in a way that allows you to make a return on it. If someone hands you an interest free loan and you blow it on an expensive car that actually goes down in value the second you take it off the lot, you're losing money. That said in the right circumstances debt is an extremely useful tool. But he's probably mostly talking to the people who don't know how to use it that way.
An interest free loan is something you take 10 out of 10 times…the reason is simple: even in the worst of times you can accrue more than 0% interest on money.
Right now, with current interest rates, if you could get an interest-free million dollar loan, you’d essentially be able to make $50k a year out of it by just sticking it in an online savings account.
Even if they demanded that you pay all of the money back in a month, you should still take it, because you’d be netted the interest you could get out of the money in the month, and then return all of the money back to them.
Anyone saying they wouldn’t take an interest-free million dollar loan is a complete moron.
I'm well aware that that's true if you're financially responsible and educated in investment. I don't think his advice is aimed at that group of people. Also in the real world people don't hand out 0% interest loans without strings very often?
Educated in investment? Even a regular savings account will net you some return on a million dollars.
You can also be financially irresponsible in every other aspect of your life and just plunk the million dollars into a savings account and take the free money.
Of course, it's a hypothetical which is why it makes his answer as stupid as it is. He's too absolute on debt and that makes him a clown, and that's coming from someone like myself who paid off a mortgage with a ~4% interest rate in 3 years.
They used to for cars, but obviously that's a depreciating asset or w/e so it's not really the same thing.
Yeah that's the definition of strings attached. If they're giving you a 0% interest loan on a car, you can assume the profit margin on the sale is large enough to cover the interest, especially since car companies often own the finance companies.
It's not free money. It's still debt, as you have to pay it back.
Then put it in TBills or a high yield savings account. The money will still be there when you need to pay and you'll have made interest on it the whole time.
Not having debt would have been nice, but it’s kind hard when your parents shove you out the door at 17. I worked full time through college, shared an apartment with three other people, and ended up 50k to get a degree in a field that I can no longer work in (my state is currently covering up the murder of a transgender child, and as a fat hairy bearded man, I am legally required to piss in a stall next to teenage girls).
His advice works if you’re an upper middle class person with a supportive family. You can’t budget if you are making 12k a year.
What?
Nex.
Ah. It's sad I had to ask for clarification as to which one.
I'm pragmatic to a fault and so his advice often makes me cringe.
However, I still have respect for him.
First and foremost because he was the gateway for my wife actually caring about our finances. And so her realizing that we can make a lot more money in the long run by not recklessly spending it now I have to credit him for...I couldn't get through to her, but now she comes to me for most all financial advice.
However it's also because for a lot of people their relationship with money is more emotional than it is rational, and for them he is very good. Watching my wife go through the transformation gave me an appreciation for what he preaches, even if it isn't logically the best path, it's often the best path for a lot of people.