@gouf78, Dave Ramsey is considered by most Bogleheads to provide sound advice about living below your means and getting out of debt, but his investing advice is a) in the charitable view, unrealistically optimistic and naive or b) in the less charitable view, self-serving.
Jack Bogle could have been a multi-Billionaire if he chose to. Instead, he leads a very comfortable life with sufficient millions, and lives his philosophy of having “enough.” He is a hero to me, right alongside Fred Rogers and Elon Musk.
Ramsey is good at motivation and behavioral modification to help you break bad spending habits and develop good ones. He is a people person. He is not good at math, investment theory, or investment advice.
Some anti-Ramsey advice would be to spend as you like, but pursue career and business opportunities that lead to more than enough income to support your desired spending. Few have ever saved their way to being rich. Comfortable, maybe. But getting rich without an inheritance or marriage to money means thinking big, working hard, taking risks. Lots more luck involved than people want to admit as well.
In some careers like sales, you are expected to live large partly as a way to “fake it til you make it”, and force yourself to earn more to cover the lifestyle you must project. It often succeeds or fails spectacularly.
Ignore this post. unless you got caught in post 140…
Upfront: this is an aside to the thread of “Who’s Rich?” But I have to answer…
Ixnay—About Dave Ramsey. Not sure why straight forward investing advice in safe funds is “self serving” or “unrealistically optimistic” or naive in the least. And advice to change those strategies dependent on your income and status in life would be anything less than realistic. His advice changes drastically dependent on personal resources.
Dave speaks to people who aren’t rich, are in debt, to young and old alike who need financial education. and how to become self sufficient and retire with grace
. A step by step practical plan. Which makes it great.
And yes, “living below your means” is a huge part of that. No pain, no gain. Lots of pain in many cases.
But it’s worth it to sleep at night. He pretty well has “been there, done that”.
Don’t spend what you don’t have.
I haven’t researched Jack Bogle (but I will) .
but Jack Bogle “could have been a multi-billionaire if he chose to” is not a recommendation in my book. And I’m sure he lives a VERY comfortable life with his sufficient millions (if that’s the case). Anyone would.
Dave has a great life too. His philosophy is to “give back” dependent on your means.
My brother is rich (his company was purchased by IBM back in 2005) and its worked out well for all of us siblings. None of us have asked for (or would need) his financial help…but, dang…it’s a great feeling to know that if our parents needed dramatic health care help…or if one of us ran into a terrible situation…we have something to fall back on.
Honestly, having a rich sibling is better than being rich yourself. It’s like having a generous neighbor with a backyard pool rather than having to deal with a pool yourself.
@SouthernHope, in that line of thought, my neighbor has much more land than we do, a nice pond, stream, etc. The “borrowed view” is just fine, and the property taxes are much lower than if we owned it
Haha @SouthernHope, couldn’t agree more. We have a relative with a vacation home. We get to enjoy it, they get to pay for it and maintain it. We think it’s perfect.
@gouf78, the details matter when it comes to Dave Ramsey’s investment advice. Living below your means, giving back, and sleeping well at night have nothing to do with investment. They are all good and healthy things to do. If you can separate out the “get rid of your bad habits” advice from the investment advice, you’ll be fine with him. But believing he knows something about investment because he knows how to get and stay out of debt is like believing your personal trainer knows something about valve replacement surgery because she came up with a great cardio workout for you. Completely different skill sets.
And @SouthernHope, ditto on the siblings with money. I’ve also enjoyed having friends with boats and pickup trucks. Your personal network is definitely part of your wealth.
I have 3 relatives with swimming pools. It’s great–our kids learned to swim in them and have the fun without having to maintain the pools or us having to pay for them. They also have large houses, which are perfect for entertaining our large extended family and ours is tiny by comparison. I’m SO GLAD they clean and maintain their homes and we can just handle our much, much smaller one.
It does not say how the 1,000 people were selected, or where they were on the income and wealth scale. There is also a distinction between “wealthy” and “financially comfortable”; the survey said that $1 million net worth was the amount given for the latter.
Dave Ramsey is great for getting out of debt. He is also great for starting down the path for building wealth or starting a business. His investing advice is not good. It’s possible to believe all of the above. I vote Bogle and index funds for retirement savings and if debt isn’t high, investing a nominal amount in retirement while paying down debt. I categorically disagree with fake it until you make it. I know self made millionaires from small business and most lived frugal lives pouring money back into the business in early days. I remember a magazine article years ago similar to “Millionaire Next Door.” It said most millionaires do drive a BMW or Mercedes but they bought it used in good condition.
I get what some poster said about comfortable vs rich but that hits to the original point of this thread. Where is the line between comfortable and rich? I still use the world standard and if I can tour the country in my Class A RV and maybe have a one bedroom condo ski lease in Tahoe, I’m more than comfortable and did it on the frugal life, solid but not 1% income, and invest for retirement from mid 20’s to 60’s. The wealth built over a lifetime to achieve the above goals will not let me fly to Europe business class or better and I’ll still need to watch expenses. But I like the joke earlier. I’ll buy the red pepper, or grow it in my own garden
Of course we can pick all of this up in the "how much do you need to retire thread. Lots of good information it’s just a lot to read through or pick a place to start reading.
However, it seems that many people’s idea of “spend as you like” is equal to or greater than the income from their career or business opportunities, so that any increase in income just gets spent quickly, so that they never really build up any wealth (or worse, they spend themselves into as much debt as possible before no one will lend them any more).
My definition of rich = when you have so much money that you can get up and walk out half way through a movie because it is so awful and not feel bad about the money you just wasted on the tickets.
I remember once we asked the manager for rain jacks because H thought “Three Musketeers” would be a great family movie. The kids started wintering and showing great distress at the prison/torture scene near the beginning of the movie. The manager was very sweet and had no problem with giving us raj checks to see another movie. We didn’t let H choose again for a long time.
“It doesn’t pay to double your loss by staying to the end of a bad movie. Your ticket is a sunk cost.”
I agree. I have walked out of movies rather than compound my loss my staying, but I always regret the sunk cost. I want to be rich enough that the price of two movie tickets means nothing to me. I don’t think I’ll ever make it.
