Confronting Dave Ramsey on "good" debt
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- Опубликовано: 4 сен 2022
- Link to full podcast: • The Full Story Of Dave...
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Props to this channel for having Dave Ramsey on and letting him speak this way. In depth and candid.
Have you seen them feature Graham on Dave Ramsey? It just aired
Dad?
Graham is a con artist. Only low IQ cultists can take him seriously. Also, Dave Ramsey's financial preaching is just a big informational. Dude's a con too
The channep, Investment Expert Exposes Fake Investment Gurus, exposed Ramsey and Graham multiple times with undeniable facts
@@blingdream8637 He's normally talking to idiots.
Outstanding interviewers. Three young guys who didn't interrupt a single time?! By today's standards that's absolute top tier.
This means they are willing to learn. Those who interrupt do not have learning in mind.
Nothing to do about young people, some people know how to listen some don't. Actually there was a study done that showed the older people get the less they want to listen and the more they want to talk, regardless of knowledge.
@@colin1818 Ben Shapiro interupts people all the time and says nothing but half truths to throw them off
@@20001mexico - Clearly somebody who has never watched a single one of his “Sunday Specials” but claims to be an expert.
They’re smart, this dude is worth hundreds of millions……he’s obviously doing something right.
I think Dave did a great job of actually answering this question.
Yes but he is wrong about good debt.
How is he wrong, he just said it is more risk. He didn't say anything more really.
@@pat-orl Yes, more risk and he says to pay it off which is bad advice. 3% for 30 years will be paying much less back in 15 years. Meanwhile, my real estate will be earning 15%+.
@@davepatton7529 "My real estate will be earning 15%+". There is no guarantee this will continue forever.
90 day callable notes are very very very riskyyyyy....30 year fannie mae conventional notes are much less risk.
When I heard Dave the first time I thought he was clueless about people that didn’t have much money. It wasn’t until I actually listened to what he was saying that I realized he knows what he’s talking about. My wife and I just paid off our house and cars. We are debt free and the freedom we have and feel is life changing.
WOOOOOOOOOOO!!!!!! YES! WAY TO GO!
Yes! It takes a long time to understand all the reasons on why to stay away from debt!
It’s like removing a noose off of your own neck. Congratulations
Great for you man this is awesome
Congrats!!!! I can't wait to pay mine off!
"When the tide goes out, you can tell who's skinny dipping." Damn! That's one hell of a quote from Buffet.
Yes, brilliant quote. And there is even a little more to the quote... It is actually: "It's ONLY when the tide goes out, that you discover who's been swimming naked."
@@VuuHere And: “You only learn who has been swimming naked when the tide goes out.”
- Warren Buffett, Letter to shareholders, Feb. 2003
Tide goes out twice a day...
@@allenpriest8985Can't time the market and some positions change rapidly. But when the tide goes out if you got it wrong everyone knows.
What he said about people in the real estate business is so true. They are taught to preach that the market always goes up and there’s no risk involved in buying a home or investing in a property. Most agents and mortgage loan officers are just out here acting like used car salesman and trying to hit their sales goals. They don’t care if you foreclose or lose money on a deal and get stuck in it for years longer than you forecasted. I see a lot of first time homebuyers in the near future regretting buying at the highs the past few years.
During my days of Real Estate. The person who was the main broker in charge of the office. Lets say manager. He stated "I don't know why young people are not buying houses. They rather rent than buy? Can you belive. It is up to us to show them why its better to have skin in the game" I heard another agent about my age or slightly older say the samething. I counter it by saying "Can you blame them for not buying? Its cheaper to rent if your not staying long at one location. With people moving around, and upsizing and downsizing and also who can afford a home? Also if you rent its on the landlord to fix yours place not you. Landlord pays the property taxes, insurance and etc. Explain." He had no words other than "huh its hard to argue and I do agree the manager doesn't see it that way"
@@ralph4370 I definitely agree with this. I renovated my own home at 25, built $40k in net equity, and plan to turn it into a cash flowing rental in a year or two when I move, but that's a lot of work people can't manage as easily if they are moving around or their work or skillset doesn't permit. I'd never chastise someone for doing what's right for their situation.
there are a lot more ppl on the sidelines wishing they bought a couple years ago when rates were below 3
It really depends on what you bought and why. Houses are vehicles for living before they are investment vehicles. If someone bought a house thinking they will get to flip it in 3-7 years and come out 80% up from 2022, then yeah they are bound to be disappointed. If someone bought a house that had an ARM loan and they could barely afford it to begin with, then yeah its probably going to blow up in their face. These are risky things.
People shouldn't buy homes assuming they can sell at year 7 and turn a profit. Well thought out risk management in home buying is understanding that the risk is really in the opportunity costs of not being able to sell and move when you want. Not the loss of capital. Its removing the down payment from your investment pool and shifting it into building equity. Most of the time that starts around year 5, and it can be longer if you buy high and end up having to wait for a good market to sell.
Unless these are just the new lows. We printed 5x the money supply…if you don’t own assets you missed out
I deeply respect both Dave and Graham, it warms my heart to see two people with similar theories and opposing theories sit and discuss the pros and cons of their philosophy. My hat is off to both Dave and Graham for doing this…
Graham is a ftx grifter
I mean, Dave has literally gotten millions of people out of debt and made several thousand millionaires with his strategies over the past 40 years. And Graham has only made himself richer all the while screwing people, like with the FTX scam and all the other credit card BS he used to push. They are not equals.
Agree. That’s the way it supposed to be as we grow from other’s mistakes and experiences!
@@ltmsimply
Cooperation and creativity vs competition and domination. We can also agree to disagree.
Concur. Most people today do not intelligently discuss anything without name calling and taking things personally.
I appreciate Dave being real here.
I was raised on DR, listening to him on AM in my parents minivan during the recession, and this was one of the best clips I've seen of him ever. Simple, yet rock solid response to one of his biggest critiques. Remember folks, there is a reason why Dave has been relevant for as long as he has.
💯💯💯
Here’s when I think it’s okay to take out debt, if your home is paid off and everything and you have 100k in savings and you can buy a rental property with a 1/3 down payment. I would take out debt for that.
He’s also really good at speaking. His message isn’t the best message for each person, but it’s a good message for everyone.
I’ve heard Dave tell people who’ve paid off thousands in debt over a 3 year period, skimping on life and taking on extra jobs, who then ask if they should take an unexpected bonus of say $15k and pay off the last bit of their debt, or take their family to Disney World and finish up their debt over the next 8 months or so. You can guess it, because his method has no practical use for debt of any kind, he told these people to go next year, although their kids are getting older and some of them would likely be much less interested.
Also heard him tell a small business owner no to debt who could 3x their revenues by taking out a small business loan to buy some equipment that could be paid off in very short order via the incremental cash flows. It wasn’t that it was a bad plan, it’s just not a part of his plan and methods. Dave says that RE investments don’t allow for the calculation of risk, but I would say that his plan doesn’t allow for the calculation of solid plans and the likelihood of success or failure. He just says no to all debt, whether it’s to buy a fishing boat, or increase the growth of your small business exponentially with limited downside risk.
@@freepat101that’s because you’re missing the long term goal here which is to become a millionaire 😂 he wants people to reach this goal and be debt free
I feel sorry for you. Because of Dave's influence in your life, you will not be poor, but you will most certainly never be rich. Shame.
Dave knows what he's talking about. He's more than just a math/finance guy. That's what people miss in their conversations about him. He's explaining that people don't behave in purely calculated mathematical ways. That the world is more complicated than that.
Yes, in a vacuum with very predictable variables, debt is a much smaller issue. But in the real world, that's not how people operate. And that's his audience. The mainstream typical spender.
I like this version of Dave a lot more than the Dave on his show. Calmer, more time to get his thoughts out, shows that he does, in fact, know what he's talking about. Shows that his dogma doesn't come from ignorance, but a place of extreme risk aversion.
I agree with you. I think part of the difference is that he is a guest on someone else's show here. The audience is a little different. He's not the boss here; he's a guest. So, he is preaching in a lower key.
@@mathematician1234 Dave is no preacher. He is a false prophet, and he has no business speaking in churches or quoting from the Bible.
The talk radio format does not lend itself to long, thoughtful explanations, where the goal is to get the caller to explain their situation as quickly as possible, find the actual root of the problem (it's rarely what the caller thinks it actually is), and provide a recommendation before the next ad break.
I think part of it is a different audience: his show is for the radio so it needs to be exciting and also promoting his baby step method which is fine but geared towards a group of people who often need tough love and a simple step by step plan without a lot of thought and options
Extreme risk aversion is stupid tho. Don't try anything because you might fail
As a former Dave Ramsey follower turned cynic, if I’m being honest, after this recent economic downturn, his principles have started to look very appealing. I’m really starting to come around to the idea that slow and steady may in fact be the better way. Especially if you can find a career that you truly enjoy and don’t need to escape from.
What economic downturn?
@@user-tl5yb1jy7c The one that has been happening for the last 6 months
@@the_expidition427 how so?
@@user-tl5yb1jy7c What nation are you in? There is the rising rate environment, highest credit card usage seen in many years, high prices, high inflation year over year.
@@the_expidition427 I'm in Houston Tx. There is inflation but people have jobs and things are generally fine w economy here.
Dave’s advice for getting out of debt and budgeting is god tier and has helped millions of people. His problem is that his view on debt is like the view on alcohol from a former alcoholic.
Debt sucks so why teach how to use “good debt” to the masses when the vast majority of the masses will end up in bad debt trying to use “good debt” be become rich. I would argue “Good debt” teachers have unintentionally hurt more people then they have helped.
Yes he’s right, alcohol is always bad
@@baderaw25 The arguement on is it overall good or bad. Is how much is a little leveraging going to cause a bunch of people to fuck up and ruin their lives. Stuff like that is just hard to quantify. Because mathematically it makes sense if everyone does it perfectly and responsibly but you know some of them wont.
@@guppy719 Exactly
excellent analogy and agreed, i use his getting out of debt "snowball method" for consumer debt but im also on the flip side of the coin and realize theres no way to grow for a guy like me started from nothing except to use OPM
I've used debt on almost every investment. But each and every time I'm thinking about the worst case. 'Do I have enough cash if shit hits the fan?" "What if the market drops 20%, 30% 50%?" Debt can be amazing or it can end you. You can never forget that.
Exactly. Risk is factored in if you're smart, you just don't let it stop you.
That's why it's better to have very little to no risk involved. He says that using debt to amass wealth can work, at greater risk and know what you are doing. But it's just better to have little to no risk. Less chances of getting hurt for the long haul.
@@Ratkill9000 theres going to be risk regardless, you could be debt free and end up screwed. Your banks and investments arent 100% bulletproof.
If you can stomach the attention needed theres almost no reason to go againts debt.
@@Ratkill9000I work in cyber, so risk is something we talk about every day. What I find Dave talking about is very naive. If you don't have any debt that does not mean you have zero risk. In fact, there are some instances where not having your own money invested can pay off. If a property is lost, having your insurance work directly with a lender, while you make a monthly payment is way better than having capital just sitting there until you can recoup the costs. Yes, you want to minimize the risk, but if you take it too far, it can certainly bite you.
@@misterdeluxia5948if you look at every stock market fall, it's always sudden, and extremely quick. It's just the same as when you build a house vs knock it down or start a business vs going under.
Yes investments aren't bulletproof, nothing ever is. But investing over time, guarantees that the losses you see won't be as dramatic as if you invest quickly and gain quickly.
Your investments have had years and years to grow overtime, so in 10 years it could be 120% up, if it drops 20% one year in a crash, it's not going to hurt anywhere near as much as if you invest in something quick like crypto or single stocks that can fall just as quickly as they rise.
“The borrower is the lender’s slave” is so straight forward Proceed at your own risk. Including the axiom that risk yields reward.
It's also a religious principal that doesn't make sense if you're not Christian. Proverbs 22:7
The bible is cool with slavery though
Unsecured debt being a bad idea is something most of the entire planet realizes the danger in.
Yet most of us do MANY things that are dangerous and/or stupid
@@quixomega how does it not make sense if your not a Christian?
Didn’t they also hate gays and kill people with holes into their clothes in that book?
There might be someone out there who finds that debt is good for them, but it certainly is not me. Thanks to Dave for helping to make debt a 4-letter word in my house. My wife, while slow to get on board, can see the benefits now of no payments, to anyone, anywhere, anytime. Debt-free since Jan. 2020.
Just in time…
Do you use 'debt' as a swear word when something bad happens? Maybe try it
I was curious if you use credit or only debit cards?
Before Dave Ramsey I was broke and living paycheck to paycheck. After applying his principles, I've had more money in my account than I've ever had. I'm sticking with Dave's Principles.
A smart man
Seriously why does Dave get credit for speaking some simple truth. It's budgeting 101!!!
@@JermA-xx4zwI was broke with a repoed car and never heard of him and when I got a decent job I knew what not to do after that and still never heard of him until years later studying financial things. I think he gives people hope. They know what to do, but don’t think they can do it. And he breaks it down into little pieces to where it doesn’t seem so overwhelming.
@@JermA-xx4zw Because he drills that philosophy into your brain.
Dave answers here very well in my view. He’s taken his life experience and learned the lessons that came his way; can’t be mad at a guy who decides not to take on unnecessary leverage. Love his life, love his career and his heart to serve people sincerely to help them get out of debt. Maybe don’t agree with him on everything, but it’s evident God has worked to use Dave experiences and trials for his own edification, and for the edification of many others. Praise God.
This is it
@jamesof7sevenLike taking out a $500,000 loan with $100,000 down payment and using that for an investment (property, mutual funds, whatever) instead of just using the $100,000. Its more risky but if it pays off you get rich quicker, etc. If the investment goes down you go in debt/bankrupt.
I really appreciate getting the chance to hear Dave talk about debt besides his usual “Debt = Bad”. I would love to hear him talk a little more about his philosophy in this manner
This is how Dave always talks you probably should listen to him and not what others say he says.
You have to remember his radio show is meant to drive in revenue. He is going to be boisterous and firm in his beliefs, it’s his show and he does what he wants lol.
He is aware there are more ways to skin a cat. I’m personally debt free but my business uses debt wisely to do what I need to do (lawn care) if I used the debt free mentality to build the business I’d grow at a much slower pace and that doesn’t fit my kind of business.
I know exactly what he’d say if I called into the show is to use what I have but I couldn’t do the amount of work I have with a push mower lol
@@Gardslawns “uses debt wisely” is nonsensical. You choose to take on the risk of debt because, as Dave even says in this video, it can create wealth faster. And millions of people choose to take on the risk of debt with possibly the majority of them ending up losing it all. Hopefully you win the game of risk you chose to play.
@@aaronqueen55 yeah we have the cash on hand to pay for the equipment, we haven’t gone crazy buying 3 brand new trucks, buying 10 new mowers and all of that stuff that sinks lawn care companies.
The marketing, cost of goods, maintenance and repairs are what we spend the cash on. As things progress we will have to use cash for equipment because cash on hand in a business is a liability in its self. But yes had we not used the financing we would have grown much, much slower
He used to talk a lot more like this but about 2 or 3 years ago I noticed he reduced the amount of time spent on each caller and they have added more talking time for their other personalities they are try to grow on the show. I've felt like it has made him come across at times as the grumpy old man yelling debt is bad...next caller
Good on him for doing this
What an excellent conversation! I've always wanted Dave Ramsey to address the concept of beta (risk) when dealing with leveraged investments, but never heard it on his podcast. Thanks Graham for putting this out there for us to all see!
Thanks for that mature adult like remark! Always good catching up with you, Leave me a msg I’ve got something essential to share ⬆️..
Studying finance and hearing Dave talk about Betas is pretty cool because I’m studying finance right now and learned about Alphas and Betas in my investment analysis class this year. Really cool to see stuff you learn in the class room talked about outside of it.
Hey, hi, im sorry to ask you but, you think is a good idea to study finance? thats the one that i want to study but i dont know, is there a lot of math o what? if is not a problem to ask
@@angelarias5717 No worries long story short I graduated with my degree and now I am working on Wall St studying for my exams to become a Stockbroker. Yes there is a lot of math when you're in school its not too bad though. As a broker I am learning that you really don't need any math to do the job I am doing (client facing). We get most of our information from our analysts. If you want to be an analyst or investment banker you will definitely use the math that you learn. That being said I learned so much about rules and regulations in school that is helping me currently. If you have the opportunity I would highly recommend trying to get an internship it will help you get a job, and let you know what kind of area in finance you would like to work in.
Great work, Graham and team! A+!! Thanks for not being afraid to introduce some new ideas on your channel.
I LOVE that’s there’s still people in the world that have two different opinions and can talk about it!
I've been watching Dave Ramsey for years and have never heard him talk this in-depth about the ins and outs of the financial system. He does a great job of making it simple for people on his show/with his plan, but his knowledge is deep and impressive.
i think if he approached the people who call into his show at this level, they would get lost in the complexity. basic financial literacy is required to benefit from ramsey's comments here.
Dave is speaking wisdom. He acknowledges good debt but says it can be a double edge sword and quickly ruin your life at a moments notice. At the end of day debt is fire and when you play with it you have to accept you can get burnt.
Best way to handle debt is to know how much your willing to lose when things go south and have a real prospective at whats at stake .
Very well said
True. And on a cold night that same fire may keep you warm and safe while providing light. But yes, there is always risk of getting burnt.
If it can quickly ruin your life is it really "good" debt?
Yes but also let’s not ferget peeing da bed
@@docsays Safety is an illusion when it comes to debt. I'm sure the bankrupt companies that leveraged debt felt safe right up until the loans got called 😂.
This was delightful to hear. Dave speaking in a different setting. A setting for more hardcore investor types. And he is perfectly correct. Debt=risk. Not just reward.
Awesome video - glad to see you guys and Dave at the same table.
Loved hearing this answer from Dave. In the end, he tries to keep things as simple as possible for as many people as possible. Those interested in good debt are outside his target.
My father built the family business without taking risky loans. While his former boss lost everything because he was leveraged. The bank called in the loan in full. He couldn’t get the money so they seized his building, his house , cars. Etc. Lost everything
The exact same could happen with a mortgage but tends not to but the risk is still there.
Guarantee there is more to the story than simply the loans being "called in full".. Also must be more to Ramsey's story than he wanted to share; guessing he was overleveraged in Hard Money loans, the market dipped and he was short of the cash flow to (a) service the loans or (b) to refinance.
My father got screwed when the Great Recession occurred. He defaulted on his debt and they foreclosed on his properties. When covid occurred the same thing happened again. Debt is a nightmare.
@@embg he was making minimum payments on the loan but the bank was scared because there was a slowdown so they figured the best way to get there money was to screw him
@@inertiaforce7846 that’s similar to what happened to that guy.
this was a MUCH more nuanced, complex and thoughtful answer than I was expecting. Props.
Digging the new PR40 Mic Setups. Well done, it is my mic of choice.
This was awesome. Great question and I appreciate Dave elaborating on what he has made over the years an overly simplistic answer.
Dave’s answer was incredibly valid. I’m leveraged on an investment and “plan” to do incredibly well on it but things could always go sideways. Nice perspective on risk Dave!
My father inlaw (rip) owned a heavy equipment business, he owned all his equipment out right, other business owners in his industry would tell him how he’s stupid for not owning all brand new equipment and when the housing market crashed he was one of the very few companies that made it through in our area because he didn’t owe anything.
So cool to finally see these guys in a room together!
Papa Dave is AWESOME.
I read multiple Dave Ramsey books, on and off radio listener during my mid 20s (2010-2015)
Now I am a multi millionaire, debt free commercial construction business.
I had $300 to my name 6 years ago.
Thank you Dave Ramsey, among others to my success.
Awesome! Where do you live?
I just want to say thanks to Kanye’s work out plan I am now in control of my finances and my own boss.
@@justinhc123 He lives in Don'tworryaboutit. That's where he lives.
@@justinhc123 lol that’s a bit intrusive
Thanks for that mature adult like remark! Always good catching up with you, Leave me a msg I’ve got something essential to share ⬆️.....
Dave couldn’t have explained this any better…. Thank you, Dave.
When I read the title I thought this was gonna be more like a witch hunt argument, but it was actually an intellectual discussion. Great video!
Great response, Dave! Risk is measured in our hearts.
This is all so on point. Totally agree with everything he says. Risk is stress. Security and peace of mind matter far more to me than maths. None of us knows what’s round the corner.
but what if i’m not stressed by my debt. My car loan and and my student loan isn’t even a 1/4th of my take home pay a month. I get more returns and higher interest on my stock investments then they money I lose by paying interest
Reading books has really skyrocket the way I think about investing. Indeed, no one has ever got rich by saving money. If you want to become financially free, You need to Invest. I've come to realize that the key to amassing wealth lies in making sound investments.
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Great interview and really made me appreciate his stance more than i did before. It's true, accounting for risk is something a lot of people don't do in the real estate world. That being said, the younger you are the more you should take on that risk as you effectively have nothing (money, time, commitments etc.) to lose. Even in Dave's case he lost everything yet was able to rebuild and grow another empire.
I love Dave! Thanks for having him on the show!
Thanks for that mature adult like remark! Always good catching up with you, Leave me a msg I’ve got something essential to share ⬆️....
Good to hear him in a different format.
I'll bet most people watching know more than one real estate investor who is leveraged beyond advisable levels. The industry seems to attract people who are all gas pedal and no brake. That said, while risk isn't part of the calculations on the spreadsheet, most investors I know look pretty carefully at the possible downside of a deal.
That cannot be true because if it was many would not take out debt
This is very good and I appreciate the dialogue. I think what it boils down to is risk tolerance.
Ramsey follower here. Excelent video. DRS callers are often in deep financial trouble. They need direct simple advice to stop the bleeding. He provides it. Other callers ask questions like this video. He gives them answers like this video, although this Q&A was really well done. Thanks to all.
It's clear that Dave Ramsey haters don't even watch his videos. I think they just hear about him and immediately get defensive about being in debt.
What went wrong was dave was doing 90 day loans... Don't do that.
@Browsing
No didn't miss the point. I got his point.
Can you explain this? He always says "my loans got called and I got screwed" and it never made any sense to me. This means that they basically said you owe us everything on the loans right now? And this is not something possible with a traditional mortgage? Ive never heard of a 90 day loan. meaning it needs to be repaid in 90 days?
@@drewskeez1156
A bank can't just randomly call your note or your mortgage for any reason. So back when Dave was getting loans it was kind of a relationship based loan business to where the banker that was in the bank was giving loans that he probably shouldn't have been the dave was over leveraged on. They was taking out 90 day loans to do flips on houses which is very risky doesn't make a whole lot of sense. A new banker came in I saw that Dave was over leveraged and probably shouldn't have got the loans that he should have gotten and asked for assets which they didn't have to pay it and he was on 90 days to which he couldn't liquidate his properties come up with the balance.
For what he was doing (short term house flips) 90 day notes are actually the correct product.
@@craigholland2274 pretty sure Dave is richer than you.
Keeping it real and holding on strong to his principals. DR's system and his podcast have helped me tremendously. My family and I are forever grateful❤🙏
I love controlled opposite
Makes me proud to be an American !!!
Congrats
this makes me so happy. Thank you for asking him
30 year FIXED mortgage loans are very different than 90 day hard money (short term loans). The RISK Dave keeps hitting on is dramatically different when you have a 30 year FIXED versus 90 day notes that can be called on.
yes and all these kids grew up in a real estate market that has never had a down slide.
@@av1204 Graham literally started his career in the middle of a housing crash lol
@@ryanburnham9986 no he bought houses at the bottom of a crash. That is different than owning what he owns now in the middle of a crash.
Finally a quality video of Dave explaining his take without trying to make it a 30 second slam dunk clip for his show. This makes his stance way more understandable but I’m still going to be using debt to invest in rentals. He’s right, using debt is risk and that just means he is very risk averse. I can respect that. What I never agreed with is when he’s ranting about RE investors or home buyers that are willing and able to take on the risks of buying properties w debt and doing it in a way that is responsible. An example is that he often criticizes ppl who want to buy a home w less than 20% down or with anything longer than a 15 year mortgage. Owning a property for years even w PMI will often times be more beneficial to the buyer because they will have gained equity while the property has also increased in value. It doesn’t always work that way but taking that risk in an area that is growing can definitely be worth it for a lot of ppl. I think Dave’s advice is amazing for most normal folks struggling with consumer/educational debt. He’s definitely helped a ton of ppl.
Whatever people's thoughts on Dave, FPU was phenomenal for me. It motivated me and made me believe I could do something about my debt, and to knuckle down and face the long-term effort of getting debt free. It took 12 years but I got out, and I've lived my first year as an adult without debt. In no small measure, I owe him for that.
Love this! Thanks
Great insight at 3:50 - "IRR doesn't recognise Risk"
Important to assess both.
Buffett also said many times that Volatility does not measure risk.
If you own a piece of a business (stock) and its quote goes up and down every day a lot, you don't have to buy or sell each time. Mr. Market analogy, Chapter 8 in The Intelligent Investor. Really worth reading!
Great to hear you guys on the podcast together, it finally happened, so glad 😄
That only applies to the holding of an actual asset not the holding of debt.
So when a person holds a stock that has been gained through the use of debt there most certainly is relationship between volatility and risk.
If you used margin to buy that piece of business or that asset, and if the market thinks that asset is worth very little, then you're going to receive a margin call.
@@franco521 Bingo.
@@bighands69 Bingo
This was the best conversation to have ever come to light. Thanks guys.
Thanks for that mature adult like remark! Always good catching up with you, Leave me a msg I’ve got something essential to share ⬆️.....
Thanks for highlighting Dave's answer so fairly. There's wisdom here!
I like that these people can have a perfectly sane disagreement and not talk bad about each other or call names. You can agree on a lot of things and disagree on one and still be perfectly civil about it
I wasnt financial free until my 40’s and I’m still in my 40’s, bought my third house already, earn on a monthly through passive income and got 4 out of 5 goals, just hope it encourages someone that it doesn’t matter if you don’t have any of them right now, you can start TODAY regardless your age INVEST and change your future! Investing in the financial market is a grand choice I made. Great video! Thanks for sharing!Very inspiring! I love this.
I understand the fact that tomorrow isn't promised to anyone, but investing today is a hard thing to do for me now because I have no idea of how and where to invest in.I would be happy if you could advise me based on how you went about yours, as I am ready to go the passive income path.?
@@jackroyston3263 Will advice you consult ASHLEY AIRAGAHI an investment advisor who will help assist you navigate your options and see you through the procedures of achieving your dream portfolio
@@haynesatteh4463 That’s great , your investment advisor must be really good,I have seen testimonies of people using the help of investment advisors in making them more financial stable. Do you mind sharing more info on this person??
@@jackroyston3263 look her up on the internet and leave her a message, she's quite popular for her services as she was recently featured on cnn. She can work with anyone irrespective of where your located
@@haynesatteh4463 Thank you, i just found her website.
have a lot more respect for dave after this clip. he gives his blanket advise because it's easy and safe, not because it's the best way for all scenarios. more knowledge = able to take more "risk" safely
@Go Jojo ?
more knowledge does = ability to take more "risk", because it's not risk if you know what you're doing...
was just saying that this clip gave me more respect for Dave's financial understanding, since most of his advise is beginner and only fit for people who literally know nothing and have no plans to learn more.
this is the first clip I've seen of him that showed a true understanding of finance, thus increasing my understanding and respect of his opinion (not that he or you care, or should care)
Great to see you and Dave great combo.
Thanks for that mature adult like remark! Always good catching up with you, Leave me a msg I’ve got something essential to share ⬆️.
What a fantastic segment. Both sides have a valid perspective. Can't wait to listen to the whole thing.
That is the most even keeled and thoughtful I’ve heard Dave Ramsey speak about debt on any form of media. I would like to hear him speak on more financial matters in this way.
His audience on his main show is different. Different presentation.
I’ll tell you something about Dave. Whether you agree or disagree with him. He’s an amazing salesman. His ability to sell you an idea is top notch. One of the best. Really deserves the company he has
not really a sales pitch. He's talking about the mathematics of risk analysis. Risk analysis is fundamental to all types of investment.
He’s also talking from his own experience of what happens when you’re over leveraged.
The best salesman is a honest person. Because they aren’t trying to sell you something you don’t actually need.
Thank you. No bs intros or anything not needed. Just meat and potatoes down to business. Very good!
I've been waiting to hear this one for a while
Props to Dave Ramsey for having a leveled discussion that goes way more in depth than he talks about on his radio show.
Thanks for that mature adult like remark! Always good catching up with you, Leave me a msg I’ve got something essential to share ⬆️..
He spends most of his time talking to idiots. He speaks their language when speaking to them..
I'm impressed. Never heard Dave go that in depth
From The Bottom To The Top! Great Content Guys!
Great interview and clip. Way to let him get his point across
Wow. Impressive answer. I knew he was sharp, but had never heard him in a full question answer format. Great job interviewers for letting him fully answer!
A Grant Cardone ad came on after the video finished 😂🤦🏾♂️
😂
It’s interesting seeing Dave in these chats as he seems like that cool uncle with a story rather than Ramsey Show TV Dave
Great clip!
"Good debt" principles should only be applied to something that generates profit. Too many people think minimum payments on a credit card is "good debt". That $400 purse or $60k new car is not generating any value.
Honestly I think even a car payment could be good debt depending on the interest IF you were going to buy the car anyway, I paid for my car in cash during a time where borrowing money was extremely cheap, maybe I should have done payments and kept more in the bank to invest
@@Zachery_ i personally save pre-tax so I really treat anything in the bank as a nest egg if i were to fall on hard times. I have the minimum in 401k to receive full company match with the rest in an S&P index fund
Thanks for that mature adult like remark! Always good catching up with you, Leave me a msg I’ve got something essential to share ⬆️....
Dave Ramsey did an awesome job answering this question. Great video. That Warren Buffet quote is perfect!
This was great! Every word!
I haven't even watched the video because of ADs but anytime I see the word "Confront"] "Dave Ramsey" I'm in!
You got a new subscriber 😂
Dude, Dave is CONFIDENT in what he's teaching and what he does for a living. He stands on his faith and values till he dies and I love it!
Just remember, Dave doesn't make his money by following his baby steps. He makes his money as a content provider.
@@michaelpalumbo4880 yes but people who follow him are living debt free and growing wealth it’s incredible! His methods got him to where he is today!
@@jackie.mendoza his methods don't grow incredible wealth lol he teaches the undisciplined how to be disciplined with their budget. He's good for staying out of debt but he also shills his mutual funds with high fees.
@@XxChuyoxX I read making millionaires and I beg to differ! (Millions is incredible wealth to me lol)
@@jackie.mendoza Many more who've never heard of Dave Ramsey are also living debt free. Let's not get carried away here. And while his advice is mostly good there are some serious glaring holes in his baby steps.
In my opinion, Dave gives his "zero debt and pay off mortgage first to become wealthy" because it works for 100% of people who take this advice. If you tell people to invest (regardless of investment risk) while carrying a mortgage, it may only work for half of those that do it (or less).
I think the real question is how many people actually know how to calculate risk and arbitrage it correctly? Basically nobody. 90 percent of people who took out hundreds of thousands of dollars on student loans for useless degrees? People who bought 50k cars that break in 3 years? A good chunk of the US population can't even do simple addition and subtraction, don't even know how many states there are, or even if the Earth goes around the Sun or if evolution is true.
Given that most people are idiots, they should not do risky things.
It doesn’t work for 100% of people. Paying off your mortgage rather than investing is poor advice.
@@davidpatton2296 No it's not. Teaching the mass public (key phrase) to pay off all debts before investing will work for the general public. Teaching someone to invest while carrying debt (or leveraging debt) is like teaching someone how to gamble and come out profitable. I agree that you can teach someone to leverage debt to invest, and with some calculated risk, come out ahead, (just like teaching someone to come out ahead in blackjack) but this advice is not for the general public.
He tells people to invest 15% of your income, and then put anything left over to pay of your house.
@@-Wreckanize- Wrong
Dave Ramsey had the entire floor.
He was good at presenting and everyone was listening 👂. 😊
When we listen 🎧 we learn the most. 🎉
It’s already been said but I’m just now seeing this great video, it was the exact question I wanted to talk to him about. Glad to see they let him talk. No But,wait etc
Dave is right, more debt = more risk, so if you know how to manage your risk debt isn’t bad. The problem occurs when you can’t calculate your risk, just look at what happened to archegos and Melvin capital
The problem is that a lot of people who thought they knew how to calculate risk turned out they didn't. Debt always seems to bite you in the ass.
@@inertiaforce7846 it’s pretty fun In fact these people were a hedge fund with so called the smartest people in the world working for them yet they couldn’t understand risk because greed got the best out of them
@@justins5756 I just got into an argument with some moron about debt over the last 3 days on RUclips he kept telling me how Ramsey doesn't know what he's talking about and how risk can be managed and all kinds of other nonsense. It's frustrating as hell I don't know why it's so hard for some people to see the obvious.
@@inertiaforce7846 Im not about always being debt free but people should understand that most people can’t handle the burden of debt over their head and you will feel better if you have no debt. If you have the money pay it off, now I am against paying cash for a brand new car that’s just a lose lose
Thanks for that mature adult like remark! Always good catching up with you, Leave me a msg I’ve got something essential to share ⬆️.....
Shout out to Dave Ramsey. Did an excellent job explaining risk and how it should be considered.
This is the first honest conversation I have heard him have about debt. Usually he is dismissive and can't be taken seriously. He was honest and basically said he wants to guarantee as little risk as possible, for fair reasons, and thus debt doesn't allow for that. Thank you for being honest.
This is such a rich and in-depth answer. Lots learned.
I'd imagine Dave having ptsd seeing a Credit card. I've gotten out of money sucking debt and plan mentally to stay out of it.
Seeing @dave ramsey stepping out of his box is refreshing! Way to go Dave!
Beta is for correlation of returns to a market (or index portfolio). More common measures of risk are standard deviation, drawdown size, VaR etc. Risk adjusted returns are generally measure using Sharpe and Sortino ratios. Treynor ratio is good for seeing return relative to beta.
This was a necessary conversation at a time where so many “Investors” are promoting risky deals without mentioning any of this. Those same people also mock the Ramsey philosophy but as you can see there are reasons.
The title is misleading. It should be ASKING Dave Ramsey if debt can be good.
My life isn’t fancy but it’s peaceful by avoiding debt. I can’t mathematically explain it but I like knowing that I don’t have to stress as much about income and payments. I want to look at my monthly bank statement and see calmness.
Here's a way to explain it with math that I use. The loss of time in a year to deal with that stress, both health management and tasks, could be made up by working extra hours of overtime or a second job for additional income. Or the time can be used for meal prepping lower cost food as opposed to eating out on the go, which cut down on monthly expenses. That additional income than then be used to further pay for your house and invest for retirement.
@@itchyisvegeta Or that the lower stress levels trough life could lead to a longer life in which you can use the exponential growth of your assets even more.
yep I agree 100% "The mythology that just because something worked once it will work all the time" and "everything is going up". Kind of like the stock market right Dave?
I love Dave and Graham.
I've always had an aversion to debt. I thought of it as a necessary evil. So when I found Dave Ramsey's plan, I knew it was a good fit for me. I won't be a millionaire on it, because I started it too late in life, but I will retire with a nest egg and no debt.
If u dont mind, what is his plan exactly..ive just seen him for the first time here
Thanks for that mature adult like remark! Always good catching up with you, Leave me a msg I’ve got something essential to share ⬆️....
@@Emma95able 7 baby steps -
1) 1,000$ Emergency Fund
2) Pay off debt (snowball, knock out smaller debts asap and keep going living on beans and rice)
3) Save 3-6 months of expenses in a fully funded emergency fund.
4) Invest 15% of your household income in retirement.
5) Save for your children’s college fund.
6) Pay off your home early.
7) Build wealth and be giving
@@Emma95able - Essentially the plan is to stop borrowing money. Ever. Pay off all the debt you already have and then invest into mutual funds while living on less than you make.
Essencially
1. Spend less than you earn and invest.
2. Work hard and don't spend money you don't have
3. Credit card bad
The fact he got so rich and built a company out of these kindergarten principles just shows you how gullible the average American is.
No debt is good debt, some is better than others, mortgage vs credit card. But you ideally want none
First time I've heard a reasoned, respectful answer from Ramsey.
GREAT topic. For years I've said Dave Ramsey is good for the average person, but to really thrive you've gotta use some debt. Dave is a wise man, he understands risk. I smashed to thumbs up on this video.