Fight the Man! (Man aka DR 😋 )

[Knee Deep in Water Chloe]

Check out this article from USA TODAY:

Why Dave Ramsey followers should disregard some of his tips on retirement savings

www.usatoday.com/story/money/2021/08/22/3-things-dave-ramsey-gets-really-wrong-about-retirement-savings/48749013/

I’m always appreciative when some shows the errors of Dave’s ways.

[tallguy]

There has always been a group of people for whom Dave Ramsey's advice is or can be appropriate.  That group does not include anybody who actually knows anything about money.   

[Tiny]

I think by the time someone has started Baby Step 2  (pay off all debts except mortgage)  they have probably outgrown  Dave's advice.   

I'm assuming that by completing Baby Step 1 -  building a 1K emergency fund - that the person has spent time and effort getting their financial stuff in order - they've created a spending plan/budget and have been working with it/refining it  in order to get that 1K emergency fund built up.  I'm guessing this step may take a bit of time (months up to a year) for some people.   By the time they've achieved the first step  -  I'm guessing they've looked at their debt and made some changes (stopped digging the debt deeper - by changing their spending habits).  And that they are working on learning how to 'live beneath' their means.   

Once someone is in the position to be able to consistently decrease their debt on a monthly basis (and perhaps have a timeline of "paid off by dates" they are working towards) they are ready to consider how retirement savings fits into that "debt pay off plan" - especially if the debt payoff plan takes more than a few months.    And that's when they outgrow DR's advice. 

I think someone who can get to Baby Step 4 within a year -  has definitely outgrown Dave Ramsey's advice.  They have plenty of income and/or have manageable debt/expenses but don't manage them.  They needed to learn how to manage their income/have goals/live beneath their means - and by doing that with a year - they have outgrown DRs advice.  

I also think people who need more than a few months  to complete Step 1  have also outgrown Dave Ramsey's advice.  They most likely have more debt/expenses than income and may need a longer time to get on and stay on the "good" financial path.    DRs advice for getting to Step One is probably good advice for them - but the length of time to get there makes DR's long term advice not so good.   
 

I kind of wish DR had different "tracks" or "timelines"  to his advice  based on how long it takes someone to achieve and stay at Baby Step 1. 

[minnesotapaintlady]

I think he's pretty solid through Baby Step 3, and I don't think you can really go "wrong" following him through that point, you might arguably do "better" with other advice, but it also throws in a level of complexity that could throw off those that want/need simple to follow steps and prefer to focus on one thing at a time.  It's steps 4,5,6 (done simultaneously) where the biggest group of people start to move on and do their own thing. 

But, except for the not investing to the match when paying off debt, that article picks out pretty benign things to pick him apart over.  I mean, mutual funds are better for most investors than individual stocks and while the 12% thing is an exaggeration (although not really the past 6 or 7 years now!), it's not really harmful and fires people up to invest.  I'd pick more on the credit cards are evil and Roth! Roth! Roth! mantras than any of those things.