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Originally posted by smithnsig:He also says cut up your credit cards. again, for people who have no control. I have a couple of cards that stay payed off.

Yes, he generalizes a lot. I put nearly every retail purchase on a CC to get the cash back points. I haven't paid interest on it in 25 years because it is PIF every month.

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Originally posted by Cous2492:
Good to hear. I'm actually being forced into it by my wife! Haha!

We don't have much debt at all, just two average cars that we have paid off a good portion of and our mortgage, with no credit card or student loans. We have a healthy savings, but according to his program we would drain the savings to pay off the cars now (only keeping the 1k emergency fund). I am not crazy about this idea, but at the same time with no car payments we will be putting another 700 away in the bank each month.

I'd compare the interest rate you're paying on the car loans and the interest rate you are being paid on the emergency fund. The difference is probably of some significance and tilted in the wrong direction. Personally, I'd figure out what was the minimum emergency fund I'd be comfortable with, understanding that I'd be quickly refilling it from car payment savings, and use the balance of the emergency fund above that number to pay down the car loans. If the car loans weren't at the same rate, I'd pay the most expensive off first, then apply any leftover to the other. Once I got the emergency fund back where I wanted it, I'd use the car payment savings to overpay the monthly payments until the cars were both paid off.

Some smart guy once said something to the effect of, "The difference between rich people and poor people is the direction of the compounding of the interest."

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My main questions regard investment advice. Are his suggestions valid? I was told to skip the deferred comp offered through work and go with a Roth ira instead when we get to that point. I am thinking about it now because my employer has open enrollment into the deferred comp every july, so it would make sense to do it now.

When you say "deferred comp", do you mean a 401k where the company pays the money into an account that you own, or do you mean a deferred comp program like some companies have for executives where the company promises to pay you later?

If the former, does your employer have a match to employee contributions? One employer I worked for matched employee contributions dollar for dollar up to 3% of salary up to $1,500 (or $2,500, I don't remember). I thought it was a no brainer to put in enough to get the full employer match as it gave me a 100% return on my investment into a tax deferred account. When I left the company I rolled the 401k into an IRA with my broker. In a year when I had some tax losses I converted the standard IRA to a Roth IRA. The conversion is considered a taxable event, but I had enough losses that year to wash it out.

If the latter, get some professional advice about that specific Deferred Comp plan and consider the current health and long term outlook for the company. I believe (it has been a long time since I looked at this, and I didn't look that hard then so I may be wrong) that an employee's deferred comp is just an obligation of the company and if the company goes belly up the employee is just an unsecured creditor and probably SOL. This is very much in contrast to a 401k where the asset is yours and not the company's.

I haven't read Dave Ramsey's stuff, but it sounds like he is taking an approach much like I would: Get rid of debt, then save and invest. Consume less than you make.

The deferred comp is similar to the second scenario you described. I believe they call it a 457. Their website is Ohio457.org. it is for public employees in Ohio.

My employer also offers a 401k program (no matching).

The class facilitator is my father-in-law and he seems to have a good grasp on everything, so I can ask all of the questions I want to him.

I just wanted to get some reviews and a little advice from the great people here.... and you didn't disappoint! Thanks!

Anyone follow Del Walmslwy? He says Ramsey's ideas are dumb and he has some good points but I've only heard him a handful of times on the radio. I can agree with some of Ramsey's ideas on debt but you won't get rich following him, its more of a "live on what you make" program and Walmsley claims he makes people rich.
http://www.lifestylesunlimited...we_are/del_walmsley/

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Originally posted by MNSIG:

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Originally posted by smithnsig:He also says cut up your credit cards. again, for people who have no control. I have a couple of cards that stay payed off.

Yes, he generalizes a lot. I put nearly every retail purchase on a CC to get the cash back points. I haven't paid interest on it in 25 years because it is PIF every month.

Yes he definitely comes across as very Black and White - as you mentioned.

Credit cards - BAD!! I have accumulated tens of thousands of FF miles and thousands of $$ 'cash back' by using CCs and paying them off every month.

But again - his target audience doesn't have that discipline.

Paying cash for a car ?? Might / might not be the best idea. But again doesn't want to have that conversation.

Financial 'leverage' has made a lot of people millionaires in this country but in his cash envelope world that is anathema.

But I credit him with all the people he has reached and taught basic financial literacy!

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Originally posted by mrvmax:
Anyone follow Del Walmslwy? He says Ramsey's ideas are dumb and he has some good points but I've only heard him a handful of times on the radio. I can agree with some of Ramsey's ideas on debt but you won't get rich following him, its more of a "live on what you make" program and Walmsley claims he makes people rich.
http://www.lifestylesunlimited...we_are/del_walmsley/

I may be wrong but that program appears to be real estate focused. I wouldn't put it in the same bucket as Ramsey, who appears focused on very basic financial matters and lifestyle changes for current or potential profligate spenders.

Nothing wrong with real estate, mind you, but if you are someone who needs Ramsey's advice, buying real estate instead of getting your financial act together is putting the car way before the horse.

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Originally posted by joel9507:

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Originally posted by mrvmax:
Anyone follow Del Walmslwy? He says Ramsey's ideas are dumb and he has some good points but I've only heard him a handful of times on the radio. I can agree with some of Ramsey's ideas on debt but you won't get rich following him, its more of a "live on what you make" program and Walmsley claims he makes people rich.
http://www.lifestylesunlimited...we_are/del_walmsley/

I may be wrong but that program appears to be real estate focused. I wouldn't put it in the same bucket as Ramsey, who appears focused on very basic financial matters and lifestyle changes for current or potential profligate spenders.

Nothing wrong with real estate, mind you, but if you are someone who needs Ramsey's advice, buying real estate instead of getting your financial act together is putting the car way before the horse.

The difference is that Ramsey tells you how to get debt free, not wealthy. You may have no bills but still be dependent on others for your livelihood. Del tells you how to become wealthy by making much greater returns on your money while working for yourself.

I really think DR is the equivalent of going to rehab for people who are in dire straits. Just as a counselor might tell an alcoholic that they are better off never touching another drink he advocates a hard line for people with demonstrated financial irresponsibility. His advice is probably inappropriate for people who already have a good grasp of working, paying their bills and saving.