Should You Follow Dave Ramsey’s Financial Advice?

Today’s Prep:

Is the baby step program and financial advice from Dave Ramsey for everyone? What does a registered financial consultant have to say about it?

(Click the featured times below to jump forward in the episode)

Equipping Points:

Another popular financial radio host and podcaster is Dave Ramsey. What does Eric have to say about Dave’s advice? Does he agree or disagree with the baby step program? Find out on today’s episode of the Retirement Ready podcast.

Dave says to cut up your credit cards and never use them again. Eric says to take this advice with a grain of salt. Who is this message geared toward? If you’re a good saver and know how to use credit cards wisely, can you still have a credit card? Remember that a credit card is a tool. If you can use a credit card wisely and have your financial house in order, then it can be something that’s okay for you.

Should you only have term life insurance? When you’re first starting out, term insurance is what you need. Whole life insurance though can be worthwhile for people who have a higher income and are already maxing out their IRAs. Eric has both because there are different reasons you might want one vs. the other.

When it comes to investing, what should you invest in? Dave says aggressive growth, growth, growth and income, and international are the mutual funds to have. But you may want to ask why you are invested in these things. What happens if the market crashes if you’re primarily invested in growth? Where will your income and safety come from? It’s important to have a financial plan that prepares you for more than just times of growth.

What kind of average return can you really count on? Dave likes to say that 12 percent returns are easy to find but is that accurate? Eric says you should factor in distributions, taxes, and diversification. Does your plan consider the income stream you’ll need in retirement? Make sure to run actual numbers of what you’re working with, not just assuming you’ll easily make 12 percent returns every year.

When you have debt, that means you’re paying money to someone else. Getting out of debt as soon as possible is ideal. Then you could recommit that money toward investing in something else or that you could keep instead of using it to pay off debt. But does that include paying off the mortgage? What are your plans for the paying off the house? Are you doing it in a way that is a wise use of your money?

Finding a plan that fits your unique needs and situation is always a good idea. Reach out to Eric and his team to do the Retirement Readiness Review and find out what your next financial steps should be.

Listen to the entire episode or click on the timestamps below to compare Eric’s financial advice to Dave’s.

[1:40] – Should you use credit cards?

[4:43] – Is whole life insurance a bad idea?

[6:16] – What should you invest in?

[7:42] – Is it easy to find a mutual fund with a 12 percent rate of return?

[9:38] – Should you pay off your home as soon as possible?


Today’s Takeaway:

A credit card is a tool. Like any tool–a hammer, a screw driver–they can do what they’re supposed to do if you use them correctly. If you hit yourself in the hand with a hammer, they can hurt if used incorrectly.

-Eric Peterson

Related Resources:

Financial Wisdom from Calvin and Hobbes

Financial Fill in the Blank

Mailbag: Retirement Planning With Separate Bank Accounts

More From Eric:

The host: Eric Peterson - Contact - Call: (515) 226-1500

Subscribe To The Podcast:

Apple Podcasts  -  Google Podcasts  -  Spotify  -  Stitcher  -  iHeartRadio  -  TuneIn

Check out some other recent episodes

Economic News and Sensational Headlines

June 23, 2022

How much should you pay attention to some of these recent financial news headlines? Eric shares what he thinks and what matters when it comes to your financial situation.

Read More

Conventional Wisdom

June 16, 2022

Should you follow conventional wisdom when it comes to your financial decisions? Eric shares when the conventional wisdom might not be best.

Read More

Retirement Vacation Planning

June 9, 2022

Let’s plan the vacation of your dreams: retirement. More than simply a week away, you want to spend the right amount of time and energy thinking about this major season in life.

Read More

Financial Things We Can All Relate To

June 2, 2022

What are we all facing and wondering about in our financial futures? Eric talks through a few topics you might have had on your mind lately.

Read More

Mailbag: Should I Move my Mom’s Money into Investments?

May 26, 2022

Where’s the best place for your money to go? Several people are considering where their money should be, so Eric answers three questions from the mailbag for today’s show.

Read More

A Perfect Match: Tennis and Retirement Planning

May 19, 2022

Ready to ace your retirement plans? Let’s talk tennis and see how much it relates to your financial plans on today’s show.

Read More

Mailbag: Money Management Tips For Younger Couples

May 12, 2022

What financial advice does Eric have for younger couples? What can you do to reduce next year’s taxes? Eric answers these questions and more from the mailbag.

Read More

Building a Plan for the Long Haul

May 5, 2022

What do you need to get you through the long haul of life? Eric talks us through what this looks like in your financial plan and how to build it with an eye on a distant horizon.

Read More

What Do You Need to Know About Today’s Inflation?

April 28, 2022

Everywhere you turn there’s a headline about inflation but what do you need to know about what’s going on? Eric weighs in on the recent numbers and what you can do about it.

Read More

Mailbag: Should I Save Elsewhere Besides My 401(k)?

April 21, 2022

What kind of savings do you really need for retirement? Are you working with the right advisor to get you there? Eric answers three questions from listeners.

Read More

Leave a Comment